WTF is Web3?
You may have heard of the term ‘Web 3’ popping up more frequently and perhaps you have some questions:
Is it just a buzzword?
Is it just some technical jargon?
What is it?
In this article I’m going to explain Web3 in the most easy-to-understand way, although there are some technical concepts that can get a bit complicated, here we will keep it simple.
The term ‘Web 3’ was first coined in 2014 by Polkadot Founder / Ex-Ethereum Founder Gavin Wood.
“Web3 is really sort of an alternative vision of the web”
At it’s core, this is the simplest way to think about it; Web 3 is the idea of a new way to use the World Wide Web. Before we can get into the principles that Web 3 is based on, we first need to understand how we have previously used the web, if we’re on Web 3 now, what is Web 1 and Web 2?
Web 1:
The concept of the “Web” was first proposed in 1989 by Tim Berners-Lee, it was officially launched in 1990 and public adoption begun during the early 90’s.
At first the Web was basically just a page full of links to scientific documents, manuals & phone numbers. Soon enough things like email, chat rooms and the ability to create a personal web page became prominent uses of Web 1 and the general public started to make use of this fascinating new technology.
The simplest (and most common) way to describe Web 1 is ‘Read Only’, although there were elements of interaction, the majority of uses was to go to a certain webpage, consume the content and leave. Connection speeds were incredibly slow (especially by today’s standards) but the foundations had been set…
Web 2:
This is where the majority of us will feel very familiar; Web 2 is home to all of our favourite (or not) companies: Facebook, Google, Youtube, Instagram, Amazon, etc.
Again, the “classic” explanation: if Web 1 is ‘Read Only’, Web 2 is ‘Read and Write’ — “Write” in this context refers to the idea of the user generating the content.
Facebook provides the platform but without each individual user creating a profile, uploading pictures, writing comments and so on — the Website itself would be nothing. Amazon & Ebay don’t exist without the sellers (users) and the buyers (users) — The same applies for the rest of them; you, the user are generating the content, you are the content!
Before we jump into Web 3, we need to identify a few issues in Web 2 that people are aiming to address there. The first is the idea of centralisation; although the ‘World Wide Web’ may seem like a huge space, the reality is that the majority of users spend the majority of their time on just a few websites (like the ones mentioned above).
Most people don’t “browse the web”, they watch videos on Youtube, or search things on Google, get information on Wikipedia, buy things on Amazon, etc. The more these sites are used, the bigger they grow, the more they’re used, etc.
Secondly, ownership; with these titan-like companies growing almost exclusively through user-generated content, eventually people start wondering — why shouldn’t we get a piece of the pie?
A third problem is freedom; freedom to control what sort of content you make without censorship, freedom to what you can comment, what photos you can post, etc. Clearly having rules is not necessarily a bad thing, but the problem lies within the centralisation of these rules. If one entity has the deciding say on what’s right and what’s wrong — what if they’re wrong?
Finally, tied into this idea of centralisation is security; although a centralised entity can be secure — we need to fully trust that they have our best interests in mind, and that their security system is secure enough to keep your information / account safe — in the majority of cases you would just have to take their word for it.
Web 3:
So that leads us to Web 3, conceptually aiming to answer these issues of centralisation, ownership, freedom and security. But how?
To understand Web 3 properly you need to understand the basic concept of the blockchain, which is one of the core principles of building on Web3.
The blockchain is a way of storing data (e.g. a database) where all new information comes in ‘blocks’ that are added onto the ‘chain’. The blockchain is secured by what’s known as a “consensus-mechanism” which can take different forms (proof-of-work & proof-of-stake being the most common).
The advantage of the blockchain is that once a block has been added to the chain, it is very difficult for it to be edited or removed. In Web 3 blockchains are public, copies of the blockchain can be stored in computers (nodes) all over the world, meaning that the blockchain cannot just be turned off or shut down like a centralised database could. We also have the ability at any time to look at any action that has ever taken place on the blockchain (so we don’t have to take anyone’s word for anything!)
Crypto currencies are the most well known use of blockchain technology: Bitcoin has it’s own blockchain used as a peer to peer payment system, Ethereum uses it’s own blockchain which incorporates ‘smart contracts’ to program and create apps on the Ethereum blockchain. Some projects may choose to build on top of an existing blockchain rather than create their own.
So Web 3 is blockchain and cryptocurrencies?
The blockchain is a core building block because it allows for and encourages the ideas that Web 3 propagates: Transparency (you can view the blockchain), Decentralisation (blockchain is ran across a network not a single server), security (open source allows for anyone to critically review), trustlessness (we don’t need to blindly trust a company or 3rd party).
In this sense we start to see that as much as Web 3 utilises technology, it’s also conceptual and philosophical in it’s intent. The desire for the web to be a better place, although there is not a blanket roadmap to follow to achieve this, we are all striving for the similar goals and to right the wrongs of Web 2.
Cryptocurrencies are often misunderstood in Web 3, in general the “serious” ones can be thought of as a token to support a network or project (obviously some “less serious” other ones exist with no purpose, utility or value).
For example Ethereum is the token on the Ethereum network, to use and interact with the network you need to use this. Web 3 supports ‘native payments’, meaning you will use an project’s individual token to interact with it rather than linking your bank account.
These tokens allow us to participate in the various networks, participation can be voting on proposals, building & creating on the network or just using the network’s native utility. Participation on the network can also be rewarded with these tokens — thus creating the idea of a tokenised economy.
Initially the idea of tokenisation may be off-putting, you really have to pay for everything in Web 3?
Now consider Web 2, if you are not paying for something directly you may assume it’s free, but the likelihood is that your data is “the token” and you are “the product” whether you know it or not.
The profitability of Web 2 largely relies on marketing and advertising - companies can profit from what appears to be a free service and ultimately leads us down this road of selling personal data, data breaches, privacy laws and so on.
In Web 3 your personal information is much more private and your “wallet” is what connects you to different apps/sites, rather than logging in with your Google account, or signing up with your name, email and other personal information.
What does decentralisation mean in Web 3?
The idea of decentralisation is quite easy to grasp but harder to see how it will work in practicality. How can a project run effectively with no-one at the reigns? The answer lies within code, community governance and an awful lot of experimentation. It’s not unheard of for projects to be decentralised ‘to a point’, maintaining some sort of central control but only within various areas, or perhaps a project starts out more centralised and grown to a point where ownership is revoked.
DAOs (Decentralised Autonomous Organisations) are another prominent feature of Web 3, feature in many projects and also exist as individual groups. They attempt to answer the questions of leadership & mangement from the community rather than a central entity.
So practically, what will the everyday normal person use web 3 for?
Defi (short for decentralised finance) is one of the largest uses of Web 3 so far. The banking industry has long been seen to be some sort of an enemy of the people. Although our entire life revolves around money and finances, the control over the value, ownership and source of this is very centralised -leading to issues like low savings rates, unable to get mortgages, unable to get loans, high interest rates and ultimately things like financial crashes.
Defi attempts to answer some of these problems; fairer standards for taking loans, opportunities to earn higher interest rates on savings and investments, allowing for peer to peer transfer without using the banks as a middleman and so on.
Developers have been making the most of Web 3 platforms to develop daaps (decentralised applications) — there are several programming languages exclusive to Web 3 (e.g. Ethereums Solidity). These dapps come in many forms; Web 3 alternatives to Web 2 uses all exist, mostly focusing on the ideas of ownership (user), decentralisation & community.
In recent news the popularity of NFTs (non fungible tokens) is almost becoming a household talking point. Millions are being spent on jpeg pictures, but the technology behind this allows us to prove digital ownership which gives rise to a whole host of exciting new possibilities, on top of this amazing new collectible art trend.
This is only scratching the surface of how Web 3 can be used, the reality is that there are hundreds of thousands of projects out there, people are trying to answer questions that you and I probably haven’t asked yet. Many are still building, but the opportunities are endless.
To conclude
I envision a fairly near future where the concept of wallets & wallet integrations into browsers, on your phones etc becomes a standard. Blockchain technology is already being picked up and used by giant organisations in the corporate world, stablecoins are being considered by governments as official currency, some countries have already invested in cryptocurrency and the majority of financial companies have some holdings also. The market cap of crypto peaked at around 3 trillion USD in 2021 which is a testament to it’s market power and investor sentiment.
Web 3 is not meant to be a replacement to Web 2, it’s simply an extension. There is no need to limit ourselves to one or the other and that would be beside the point - The point is that we should have the ability to choose what we do and how we do it, Web 3 gives us that choice. Web 3 opens doors and evens playing fields. Web 3 is the party that we are all invited to and simultaneously are all hosting, see ya there.