Web3 or Web3.0 is the big buzzword in the tech world these days. It generally refers to the next generation of the worldwide web, supposed to take over from Web2.0, which is more centralised and focused on user-created content. Web3 is supposed to be a more decentralised web that challenges the dominance of the tech giants by concentrating the power and data in the hands of the users, instead of the big tech corporations. This means that data is distributed across networks and no single entity owns the information, though the idea is much harder to execute.
Tim Berners-Lee, the inventor of the World Wide Web, explained this idea in 1999: “I have a dream for the Web in which computers become capable of analysing all the data on the Web — the content, links, and transactions between people and computers. A “Semantic Web,” which makes this possible, has yet to emerge, but when it does, the day-to-day mechanisms of trade, bureaucracy, and our daily lives will be handled by machines talking to machines.”
And it looks like there are more and more believers in Lee’s vision.
“Web3 isn’t another buzzword or jargon which can be written off. It is the future of the internet. This is the new infrastructure layer which will power the next generation of computing innovation,” Sharat Chandra, an emerging tech evangelist, and a blockchain expert told indianexpress.com
Some of the use cases of Web3 are Decentralised Autonomous Organisations (DAOs), Decentralised Finance (DeFi), Stablecoins and Central Bank Digital Currencies (CBDCs), private and digital infrastructure, and creator economy enablers like NFTs and blockchain-based games.
But Web3 is growing beyond its financial origins such as cryptocurrency. “The applications are much larger and wilder. Be it for building transparent organisations, or building privacy. With the massive data breaches that have proliferated during the Web2 era, data protection must be central to the next wave of tech innovations. Privacy infrastructure will enable a more protective suite of applications,” Krishna Kumar, Member, Skill Development Working Group, IET Future Tech Panel said, adding that Web3 allows for low-cost, nearly instantaneous, borderless, peer-to-peer transfers of actual value. They aren’t subject to the business hours of mainstream financial institutions.
Web3 applications sometimes referred to DApps, that are built on decentralised peer-to-peer networks like Ethereum and IPFS. Instead of being run by some company, these networks are built, operated, and maintained by users. With Web3, it’s possible to split up large files into smaller chunks that can be individually encrypted and stored in other locations, making it nearly impossible to hack.
“Web3 will power the new financial world order on ‘metaverse’ and unleash innovation in online gaming, tokenisation of assets in virtual spaces and empower users to exercise complete control over their identity and data,” added Chandra.
While centralisation has helped billions of people get access to amazing technologies, many of which were free to use, it has also stifled innovation.
“Right now, companies that own networks have unilateral power over important questions like who gets network access, how revenue is divided, what features are supported, how user data is secured, and so on. That makes it harder for startups, creators, and other groups to grow their internet presence because they must worry about centralised platforms changing the rules and taking away their audiences or profits,” Kumar pointed out.
The classic challenge of decentralised networks is that they are public goods. Without a central entity to control decisions and capture profits, it is hard to incentivise their maintenance and development. Crypto helps solve this problem through decentralised coordination and providing economic incentives for development.
Today’s web is also filled with concerns around data privacy, fake news, identity theft hacks. Web2 is centralised and a few corporations hold the power of data. Kumar quotes: “If you’re not paying for it, you’re not the customer. You’re the product.” He believes that the problem is that we don’t own or control that data, and this concept gets changed on Web3.
Instead of providing your personal data over and over again on each platform you sign up for, you will instead simply authorise the platforms to use your data. If something changes, like your address or credit card number, you need only change it once on your end, and all your sites will be updated. This will make the Web much more user-friendly.
However, a lot of work has to be done to lay the foundation for Web3 —meaning that users, developers, tech companies, and others would have to come in on agreements around how the Web3 protocols would work. Only when this work gets going, and when financial incentives align behind it, will Web3 start to get real.