If you still think the entire internet is limited to messaging apps, social media, pictures, videos, and a few websites you visit regularly, you’re missing out on a lot of exciting developments!
In our comprehensive guide, we discuss everything current and fascinating about the next generation of the internet, from the inception of the idea to its potential applications.
Understanding the evolution from Web 1.0 to Web 3.0
Let’s start with the basics, specifically the definition of Web 3.0. So, what is Web 3.0 (or Web3)? It's the concept behind the next generation of the Internet. The whole idea of Web3 revolves around handing over all the power and responsibility for their data and online presence to the users. Therefore, Web3 is built on the principles of decentralisation, openness, and giving users greater control over their data.
The history of the Internet began in the 1990s with Web 1.0. Back then, access to the World Wide Web was limited—only academic institutions and large corporations could get online. The websites were static and few in number, with users acting as passive viewers who could only interact with web pages in very basic ways, such as through comments.
What the Web1 page looks like. Source
Later, in the 2000s, we saw the rise of the internet as we know it today, Web 2.0. This era witnessed a boom in social networks and various applications. Users transformed from passive observers to active creators, gaining the ability to create content, publish it, and receive feedback, thus interacting with many people online.
Today, Web3 is just beginning, aiming to change how people interact with the internet. Its main mission is to bring more freedom, transparency, and privacy to the online world.
The transition from Web 1.0 to Web 3.0 is a gradual evolution, largely occurring unnoticed, rather than a radical shift between three distinct eras.
Features and characteristics of Web 3.0
To better understand the meaning of Web 3.0, let’s explore the core principles and functions of this next-generation internet. Here are the distinguishing features that set Web 3.0 apart from its predecessors:
1. Decentralisation: Web 3.0 is a decentralised web, which turns the traditional internet model on its head. Services and applications are not controlled by a central authority like Facebook or LinkedIn.
A prime example of a "next-generation" social network is Mastodon, a microblogging platform. Its key feature is that users have complete control over their feed. There is no algorithm governed by a central entity dictating what users see.
Mastodon website
2. Increased Data Control: As mentioned in the definition of Web 3.0, one of the foundational principles is data sovereignty and privacy protection. This means that user control is significantly enhanced: users fully own their data and can dictate how it is used.
This is especially relevant in the context of algorithms. For instance, TikTok, beloved for its endless and entertaining video feed tailored to your preferences, is also notorious for collecting vast amounts of user data. This means it doesn’t just know about your interest in cryptocurrency content but could also access your passwords, private keys for crypto wallets, and much more.
3. Transparency: This feature implies that all transactions, operations, and other activities in the Web3 space are completely open. They are accessible for verification by anyone and can be monitored by the community.
This transparency also enhances security. Such close scrutiny by numerous network participants minimises the chances of hackers, scammers, and other malicious actors continuing their illegal activities.
All this is made possible by integrating blockchain technology, which enables nearly all the key functions of Web 3.0. Blockchain is a distributed ledger where information is stored in blocks across many computers worldwide. It is powered by smart contracts, self-executing agreements that facilitate transactions without intermediaries, thereby creating peer-to-peer networks.
Implications of Web 3.0 for various industries
Although the concept of Web 3.0 is still in its developmental stage, its technologies are already being actively applied across different sectors. Here are a few examples of where you can experience the world of Web 3.0 today:
1. Decentralised Finance (DeFi): As indicated by the Web3 definition, the concept aims to integrate and advance everything decentralised. This includes:
- Decentralised Exchanges (DEX): These allow users to trade cryptocurrencies directly with each other without intermediaries, such as centralised exchanges.
- Lending Platforms: These provide loans and credits without involving banks, using cryptocurrency as collateral.
- Stablecoins: Cryptocurrencies pegged to fiat currencies or other assets to ensure greater price stability.
2. Non-Fungible Tokens (NFTs): This aspect of Web 3.0 highlights transparency and user control. With the integration of NFTs, various fields can be developed:
- Digital Art: NFTs are used to represent ownership of digital artworks, such as images, videos, and music.
- Gaming: NFTs are utilised to create in-game items and assets that players can own and trade.
- Collectibles: NFTs are employed to create virtual collectibles, such as trading cards and avatars.
3. Social Networks: Here, issues of data sovereignty and privacy protection are fully addressed. Web 3.0 proposes to improve social platforms in the following ways:
- Decentralised Social Networks: Platforms where users own their data and content, leveraging blockchain technologies.
- Token-Based Governance (DAOs): Social networks where decisions about platform development are made by token holders through voting.
As mentioned earlier, Web 3.0 is in its early stages of development. Therefore, it is expected that as this technology grows, so will the list of industries and sectors that it can transform.
Web 3.0 and cryptocurrency integration
The role of cryptocurrency in the Web 3.0 ecosystem cannot be overstated. Crypto coins and tokens occupy a central position and perform several crucial functions.
1. Internal Currency: Cryptocurrency integration helps Web 3.0 adhere to its primary principle of being a decentralised network.
Cryptocurrencies are used for transactions within decentralised applications (dApps) and other Web3 platforms. They enable users to create peer-to-peer networks and interact without intermediaries, such as banks.
2. Incentives and Rewards: In Web 3.0, crypto is used to incentivise users to participate in the ecosystem. Users can earn cryptocurrency for creating content, curating data, or participating in governance votes.
3. Collateral: In the context of DEXes or lending platforms, cryptocurrency can serve as collateral for loans or other financial services within decentralised applications.
Conclusion: Embracing the potential of Web 3.0
Web 3.0 is a young and highly promising concept. It's too early to predict exactly what it will achieve, as the technology is still in its nascent stages. The ambitious goal of Web 3.0 is to transform how we interact with the internet forever. To stay updated with all the latest developments, make sure to keep in touch and regularly check the Itez blog!
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This article is not investment advice or a recommendation to purchase any specific product or service. The financial transactions mentioned in the article are not a guide to action. It’s not intended to constitute a comprehensive statement of all possible risks. You should independently conduct an analysis on the basis of which it will be possible to draw conclusions and make decisions about making any operations with cryptocurrency.
