Everything improves and evolves with time, and the internet is no exception to that.
The dot-com boom initiated the internet in the 1990s. Then, from 2005 onwards, it was the internet of content creators and social media—people connecting with people.
Now, with the rise of blockchains and cryptocurrencies, the genesis of the 3rd version of the internet has already begun.
Web1.0
Web1.0 refers to the first stage of the internet—or the internet of the late 90s and early 2000s—which was about decentralized and community-governed open protocols.
Mostly, value remained at the edges of the network—builders and users.
Put another way, there were no middlemen between creators and consumers, and no company dominated the internet like we have today, e.g., Google, Facebook, etc.
The websites were simple static HTML codes that didn't do very much besides displaying information and were hosted on free web hosting services or ISP-run web servers.
User-to-user interaction was little to zero, meaning two people on the internet couldn’t have a seamless conversation like the options we have today like direct messages, zoom, and what have you.
Web2.0
Web 2.0 refers to the internet, which prioritizes user-generated content, and is also known as the participative social web.
This second version of the internet has a much more sophisticated user experience. You have web applications where you sign up with a username and password, which gets stored on privately owned databases.
The explosion of social media, user-to-user interaction and skyrocketing eCommerce are attributed to Web2.0.
The users not only have access to the internet, but they can also put information for others to see. A layperson using the internet has the privilege to share his perspective, thoughts, experiences and engage with others.
The tools to do it are mainly podcasting, videos, blogs, emails, social media, and direct messages.
But these tools have central authorities controlling them. For example, youTube has a monopoly over videos, Facebook and Twitter control most social media, and Google holds the email and search engine space, etc.
The information shared by a user is sometimes monitored or even censored, and there is no transparency.
Not only that, companies provide us services on the internet in exchange for our data.
For example, social networking platforms do not charge you, but they have to make money somehow. So they store your personal information on their databases and monetize it either by using the data to target ads better or sell the data off to other companies.
They track your browsing history, capture your footsteps on the internet, and are getting pretty sophisticated with time.
Web3.0
Web3.0 combines the community-governed decentralized culture of Web1.0 with the sophistication and functionalities of Web2.0.
Web3.0 is an internet powered by blockchain—an internet that was not possible before. The Web3.0 applications will be decentralized, meaning no individual or company will own them.
Talking of blockchain, it's a system of recording data in a way that makes it impossible for anyone to change or cheat the records, as there are several copies of that data across the network, and no single authority controls and scrutinizes it.
Some use cases of the blockchain include cryptocurrency, defi, dapps, dex, etc. And that's just scratching the surface as the field is new and will completely disrupt how the internet works.
Cryptocurrency
Cryptocurrency is the form of money or value exchange that is native to the internet.
Remember that Web2.0 is the internet powered by databases, meaning companies store users' data on their centralized servers.
To understand cryptocurrency better, think of money in Web 2.0 as a string of numbers stored on a centralized database owned by a bank or company. The downside to it being stored that way is that the data can be manipulated by the company itself and is also vulnerable to hackers.
But with Web3.0 blockchain-powered internet, several copies of the data are shared across multiple nodes all over the internet where it can't be manipulated, and there is no single owner.
Defi
Defi stands for Decentralised-Finance, and it includes things you can do with cryptocurrency that you'd do with contemporary financial systems plus a lot more(like mining pools, staking, etc.)
To start benefiting from Defi, you don't need permission from any authority(because there are none), and you don't have to provide your private identity information, which you completely give up in Web2.0.
Dapps
Unlike bitcoin, blockchains like Ethereum, Solano, Cardano, etc., allow you to create apps on top of them. And these blockchains are 'turing complete,' meaning almost any application can be programmed on their blockchain.
These apps are known as Dapps or Decentralised apps. Anyone who has access to the internet will have access to dapps, and there is no authority controlling or monitoring the participation.
This way, the users get to use the apps without having to compromise on their private information.
The payments or the value transfer is carried out using native tokens (for example, ETH for Ethereum blockchain, SOL for Solano, etc.)
Web3.0 is still in the early stages, so most use cases are yet to be discovered, and the ones that already exist are being improved constantly.
Blockchains are the cornerstone of the decentralized internet—an internet where third parties will have less authority over user interaction and value transfer. For example, p2p(peer-to-peer) communication, payments, services transfer, and marketplaces will involve no intermediaries.
Examples of how Web3.0 will reinvent how the internet functions
Youtube can ban any channel or censor a video. In contrast, web3 videos won't be censored because of decentralization.
Twitter or Facebook might prevent you from using their service, whereas web3 social media services will have no central authority controlling the participation.
Web2.0 based businesses are pretty extractive, and users are not rewarded for their participation in the network. Most value is accrued to siloed centralized service providing companies like Google, Amazon, Facebook, Apple, etc.
Whereas in web3.0, users are incentivized to use and help grow the network because as the network gains more traction, the more people use it and the more viable the protocol becomes. In web3.0, everyone that participates can reap monetary benefits.
Web3.0 also involves changes in the financial systems. For example, when you pay with a credit card or PayPal at a cafe, a financial body sits between the two parties, recording and controlling the transactions. With blockchain, these parties are cut out of the picture.
Credit card companies charge you an excessive amount of transactions and late fees, whereas crypto transaction fees are close to zero.
Paypal might exempt you from using their service. Whereas Web3 payment apps don't require any personal data, and no transactions get barred.
To summarize, Web3.0 will create new possibilities, a brighter future, new business models and has the potential to reinvent how we think of the internet.