Web3 is one of the hottest topics of today. This article is an introduction to Web3. After reading this article, you should understand what Web3 is all about and why you should start learning Web3 now.
In brief, Web3 is the next Internet that comprises of a set new technologies that will change how we create, manage, and consume the web.
What is Web3?
Web3 is the next era of the internet, and it’s already here.
Web3 is a revolution. The internet is broken. It’s a centralized system owned by a handful of massive corporations that harvest and sell your data for profit. They control the flow of information, which skews everything from politics to culture, and they are constantly looking for ways to squeeze more money out of you.
Web3 empowers its users, creators, and participants to be a part of the economy and benefit from it. The policies and rules in Web3 are governed by its users.
Let's take a few examples:
- Content platforms - Content platforms like YouTube and Netflix are managed and operated by centralized entities, and their primary focus is to make money from it for their investors and owners. YouTube can change its policy anytime for its content sharing and revenue share. If it stops paying its users, there is nothing users can do about it.
Netflix is a content streaming platform. If it is not making enough profits, it can raise its price anytime. There is nothing customers can do about it.
- Social Media - Social media platforms such as Facebook, YouTube, LinkedIn, and Twitter make billions of dollars on their platform from users' content and engagements. Not only do they make money, but they are purposely designed to keep their users engaged and eventually get addicted to their platforms. In other words, they don't give a sh*t about their users. All they care about is their profits.
- Banks - Banks are driven by their profits. They keep our money and do not pay anything in return. If you get a loan from a bank, they make money from it. If you are late on payments, they make money from it. If banks make mistakes, the government uses our money to bail them out. In essence, banks make billions of dollars from us.
These are just a few examples of centralized systems designed to benefit a few individuals and investors.
Web3 is different. Unlike current Web2 systems, the benefit of the Web3 economy is distributed among its users.
Web3 is distributed and decentralized. The foundation technology of Web3 is blockchain, which is distributed and decentralized. How often do you hear that this website is down? Or slow? Or get hacked. This is not possible in Web3. Since Web3 systems are decentralized, a Web3 system is a collection of nodes, and each node participates in data management and validation. If one of these nodes is down, it won't affect the system's availability.
Web3 is open-source. Web3 is open source. Not only the system's source code is available publicly, but most of the blockchains are available for the public to participate in and contribute. Most of the data and transactions are also public. You can go and publicly check current and past transactions on a blockchain. Due to the nature of blockchain, Web3 offers a great sense of trust and data transparency.
Web3 is secure. As I mentioned earlier, blockchain is the foundation of Web3, and every transaction stored on a blockchain is encrypted. Blockchain is a read-only public ledger that offers a single and "the only" source of the data. The data stored on a blockchain is tamper-proof. Hence, you can't manipulate or delete data stored on a blockchain.
Today's web is centralized. That means, the data and web run on centralized servers. It also means that data is stored and managed by a few individuals and offers a great risk of a single point of failure. We have seen again and again that so many corporations get hacked, and millions of users' data are stolen.
Web3 is the next-generation experience. So far, the Web is flooded with text and images (2D). 3D graphics is the next-gen user experience. Until today, we did not have the technology to support 3D graphics. The recent evolution of hardware, processors, internet bandwidth, storage, and gadgets has proved that we are ready for the next generation of content for the Web, i.e., 3D graphics. Most of the popular web browsers now support 3D graphics.
Web3 is intelligent. Unlike today's systems, AI is an integral part of Web3. In addition to blockchain, AI and machine learning will play a major role in Web3.
Web3 is given by its people. In addition to the founders and owner, Web3 also empowers its users, and some of the most popular and largest Web3 companies are run by its users. A community or a Decentralized Autonomous Organization (DAO) usually governs these open-source projects, and decisions are made in a democratic fashion and publicly. If structured correctly, Web3 is a true "by the people, for the people" governance.
Now, you understand a little bit about Web3. Let's look at the technologies that empower Web3.
Blockchain is the underlying technology that empowers the Web3 universe. Blockchain comprises four key concepts, decentralization, peer-to-peer network, cryptography, and consensus mechanism.
What is blockchain?
Blockchain is a digital ledger technology that allows for secure and transparent transactions without the need for a central authority. A blockchain is essentially a decentralized database that maintains a continuously growing list of records called blocks. Each block contains a timestamp and a link to the previous block, creating a chain of blocks that can be traced back to the very first block, hence the name blockchain.
The security of the blockchain is achieved through cryptographic algorithms that ensure that the data within the blocks cannot be tampered with or modified. This makes the blockchain an ideal platform for secure and transparent transactions, as each transaction is verified by a network of nodes and recorded in a tamper-proof manner on the blockchain.
Blockchain technology has many potential applications beyond just cryptocurrencies, including supply chain management, digital identity verification, and secure voting systems.
What are some of the most popular blockchains?
There are many different blockchains in existence, but some of the most popular ones include the following:
Bitcoin: The first and most well-known blockchain, Bitcoin is a decentralized digital currency that operates on its own blockchain.
Ethereum: A blockchain platform that enables the creation of smart contracts and decentralized applications, Ethereum has gained popularity for its versatility and flexibility.
Binance Smart Chain: A blockchain platform that is highly compatible with Ethereum, Binance Smart Chain has gained popularity for its fast transaction times and low fees.
Cardano: A blockchain platform that focuses on scalability and sustainability, Cardano uses a proof-of-stake consensus mechanism and aims to provide a more efficient alternative to Bitcoin.
Polkadot: A blockchain platform that aims to connect different blockchain networks together, Polkadot has gained popularity for its interoperability and potential to solve scalability issues in the blockchain space.
These are just a few examples of the most popular blockchains, but there are many others in existence as well. Each blockchain has its own unique characteristics and use cases, and the choice of which blockchain to use depends on the specific needs and requirements of the application or use case.
What are the benefits of blockchain?
There are several benefits of blockchain technology, including:
Decentralization: Blockchain technology is decentralized, meaning that it does not rely on a central authority or intermediary. This makes transactions more secure and transparent and reduces the risk of fraud or corruption.
Transparency: The data on a blockchain is transparent and accessible to all participants, which increases trust and accountability.
Immutability: Once data is recorded on a blockchain, it cannot be altered or deleted, making it a tamper-proof and permanent record of transactions.
Efficiency: Blockchain technology enables faster and more efficient transactions, reducing the need for intermediaries and streamlining processes.
Security: Blockchain technology uses advanced cryptographic algorithms to ensure the security of data and transactions, making it more resistant to hacking and other malicious activities.
Lower costs: By eliminating intermediaries and reducing transaction times, blockchain technology can lower costs associated with transactions and other processes.
These benefits have led to the adoption of blockchain technology in a wide range of industries, including finance, healthcare, supply chain management, and more.
What industries are using blockchain?
Blockchain technology is being used in a growing number of industries, including:
Finance: Blockchain technology is being used in the finance industry for a variety of applications, including digital currencies, cross-border payments, and trade finance.
Healthcare: Blockchain technology is being used in healthcare to create more secure and transparent medical records, enable better tracking of pharmaceutical supply chains, and improve clinical trials and research.
Supply Chain Management: Blockchain technology is being used in supply chain management to improve traceability, transparency, and accountability in the movement of goods and services.
Real Estate: Blockchain technology is being used in the real estate industry to streamline property transactions, improve transparency, and reduce fraud.
Gaming: Blockchain technology is being used in the gaming industry to create more secure and transparent in-game economies and digital asset ownership.
Energy: Blockchain technology is being used in the energy industry to enable peer-to-peer energy trading, improve the management of renewable energy sources, and streamline supply chain management.
The Metaverse is the name given to a digital world that will exist on top of the internet. It's a virtual reality that you can access with your smartphone and VR headset, but it's also much more than just an interactive game. The metaverse will be a place where people can meet and interact, buy or sell goods from each other, and create new communities through their own personal spaces in this vast digital world.
The metaverse digital economies use digital currencies and digital assets. Here is a detailed article on metaverse.
Digital currencies and digital assets
Cryptocurrency is a digital currency that uses cryptography to secure transactions and control the creation of new units. Cryptocurrency is decentralized, meaning any bank or government does not control it. Because of this, you can make a transaction without going through a third party like PayPal or Venmo.
Any government or central bank does not back cryptocurrencies; instead, they're supported by their use as payment for goods and services on the internet (or "in-world"). When someone buys digital coins online using real money from an online exchange market—like Coinbase—they're known as "newbies" because they didn't mine their own cryptocurrency with specialized computers that solve complex math problems to generate digital money. Newbies pay miners who solve those puzzles so they can get paid in newly generated tokens instead of spending time trying to do it themselves!
NFTs are another use case of digital assets. Here is a detailed article on NFTs.
3D graphics are used in many different applications, including video games, virtual reality, and augmented reality (for example, mapping). When you visualize the world through 3D graphics, you can see things that normally would be invisible such as shadows or reflections. This makes it easier to understand and analyze objects in the real world.
A DAO, or Decentralized Autonomous Organization, is a type of organization that operates on a blockchain network, using smart contracts to automate decision-making and management processes.
A DAO is designed to be decentralized, meaning that there is no central authority or controlling entity. Instead, decisions are made through a consensus mechanism that allows all members to have a voice and a vote. Members can submit proposals, vote on proposals, and receive rewards for their contributions.
The smart contracts that power a DAO are self-executing and self-enforcing, meaning that they can operate independently without the need for human intervention. This allows a DAO to operate more efficiently and transparently than traditional organizations, while also providing a high level of security and accountability.
DAOs have been used for a variety of purposes, including investment funds, governance structures for decentralized protocols, and community-driven initiatives. The potential applications of DAOs are vast and growing, and they are seen as an important innovation in the blockchain space.
There are several benefits of DAOs, or Decentralized Autonomous Organizations, including:
Decentralization: DAOs are decentralized, meaning that they operate without the need for a central authority or controlling entity. This makes them more democratic and gives members more control over decision-making processes.
Transparency: DAOs are transparent, allowing members to access and verify data and decision-making processes easily. This promotes trust and accountability and can help to reduce fraud and corruption.
Efficiency: DAOs use smart contracts to automate decision-making and management processes, reducing the need for intermediaries and human intervention. This can result in cost savings and increased productivity.
Flexibility: DAOs are highly flexible and can be customized to meet the specific needs of a particular community or project. This allows them to adapt to changing circumstances and promote innovation.
Incentives: DAOs can offer incentives to members for their contributions, such as rewards for voting, proposing, or participating in other ways. This can help to motivate and incentivize participation and can promote a sense of community and shared ownership.
Trust: DAOs are designed to be highly secure, with a strong focus on preventing fraud and ensuring the integrity of the decision-making process. This can help to build trust among members and promote long-term sustainability.
Overall, DAOs offer a range of benefits that make them an attractive and innovative option for a variety of organizations and communities. Their decentralization, transparency, efficiency, flexibility, incentives, and trust-building features can help to promote democracy, innovation, and shared ownership in a rapidly changing digital landscape.
Projections for Web3
The Web 3.0 market is expected to be a $100 trillion industry by 2030, according to research from Blockchain Intelligence Group (BIG). The report also predicts that the blockchain sector will be worth $1 trillion by 2022 and $30 trillion by 2023, with growth slowing thereafter.
The following year, however, BIG expects a rebound in growth with a projected valuation of $20 trillion for 2025.
The report, titled “Blockchain Technology Market Analysis and Forecasts to 2030,” was published on Aug. 2 by BIG and predicts that the blockchain industry will grow by $10 trillion over the next 10 years.
Web3 is an exciting technology that will change the way we interact with the internet. The possibilities are endless, and predicting what will happen next is hard. I can tell you that Web3 will provide the infrastructure for the next digital transformation era.