What Is Web3? Web 3.0 Explained

This is Part 2 of our series on the evolution of the World Wide Web For further insights, check out Part 1 and Part 3.

Key Takeaways:

• Web3, also known as Web 3.0, is the next generation of the internet that aims to create a decentralized and user-centric online ecosystem.
• While Web2 is defined by social interaction and content sharing, Web3 prioritizes user control and ownership of data.
• Web3 enhances privacy and security through cryptographic methods, allowing users to interact and transact without exposing personal information.

 

Evolution of the Internet: From Web 1.0 to Web 3.0

The internet has undergone remarkable transformations since its inception, evolving from a static information source to a dynamic and interactive platform. This evolution can be divided into three distinct phases:

1. Web 1.0 (The Static Web, 1990s): In its early days, the internet was dominated by static web pages that primarily served as information repositories. User interaction was minimal, with most users consuming content rather than creating it. Websites were read-only, offering limited interactivity.

2. Web 2.0 (The Social Web, 2000s): The rise of social media platforms like Facebook, Twitter, and YouTube marked the transition to Web 2.0. This phase transformed the internet into an interactive landscape where users could create, share, and engage with content, leading to the rise of online communities and a more participatory web experience.

3. Web 3.0 (The Decentralized Web, 2020s): The latest phase of the internet focuses on decentralization, redistributing power and ownership away from centralized entities. By leveraging blockchain technology, Web 3.0 promotes user autonomy over their data and transactions, giving individuals greater control over their online experiences and enabling more secure, transparent, and decentralized applications.

Differences Between Web 3.0 and Web3 Explained

While often used interchangeably, Web 3.0 and Web3 represent distinct concepts within the evolution of the internet.

• Web 3.0 is a broader vision for the future internet characterized by increased intelligence, personalization, and user-centricity. It encompasses technologies such as artificial intelligence, machine learning, and blockchain, among others. The goal of Web 3.0 is to create a more seamless, efficient, and secure online experience.

• Web3 is a specific implementation of the Web 3.0 vision that leverages blockchain technology. It focuses on decentralization, user ownership, and data privacy. Web3 applications are not controlled by a central authority, promoting transparency and security.

In summary, Web 3.0 outlines the desired outcomes for the future internet, while Web3 is a specific approach to achieving those goals.

What Is Web3?

Web3 introduces several key features, including:

1. Decentralization

Web3 aims to move away from the centralized control typical of Web 2.0 platforms, where a few tech giants manage data and applications. Instead, Web3 leverages blockchain technology to distribute power and ownership across a network of users. This decentralized framework reduces the risks associated with centralized control, such as data breaches, censorship, and biased decision-making.

2. Blockchain-Based

Blockchain technology forms he backbone of Web3, offering a tamper-proof, distributed ledger for data storage and management. Blockchains enable decentralized applications (DApps) to operate without intermediaries, ensuring transparency, immutability, and security for user data and transactions.

3. Permissionless Access

Web3 promotes permissionless access, allowing users to participate without needing approval from central authorities. This open-access model empowers users to engage with the web freely, fostering innovation and creativity by eliminating gatekeepers.

4. Cryptocurrency Payment System

Web3 introduces cryptocurrency payment systems, enabling users to pay with crypto coins or native tokens rather than traditional credit payment systems. To facilitate these transactions, users need a blockchain wallet to store and manage digital assets securely.

5. Trust Minimization

Web3 minimizes the need for trust between participants by utilizing cryptography and smart contracts. These self-executing agreements, embedded in the blockchain, automate transactions and remove intermediaries, enhancing security, transparency, and efficiency in online interactions.

6. Decentralized Autonomous Organization (DAO)

DAOs represent a new governance structure in Web3, where decisions are made collectively by the community rather than a central authority. DAOs use smart contracts to automate decision-making processes, enabling users to vote and participate in the governance of decentralized platforms.

7. Artificial Intelligence (AI)

Web3 integrates AI to enhance personalization and efficiency. AI algorithms analyze user data and preferences to deliver tailored content, recommendations, and experiences, improving the overall user experience and making the web more relevant and engaging.

These are just some of the features that define Web3. While this new phase of the internet is still developing, the full potential of Web3 will become clearer in the coming years. As with the evolution from Web 1.0 to Web 2.0, Web3 is expected to take a similar amount of time to mature. For a deeper understanding of how AI enhances digital identity security within the Web3 context, you can refer to this article.

The Benefits of Web3

Web3 offers several advantages, including:

• User transparency: Web3 applications operate on a transparent and auditable blockchain, ensuring the immutability and visibility of transactions and data interactions.
• Enhanced Privacy: Web3 places ownership of personal data directly in the hands of users. Unlike Web 2.0 platforms that often collect and monetize user data, Web3 applications empower individuals to control how their information is used and shared.
• Greater User Control: Web3 enables users to make informed decisions about their online experiences. Users can choose the apps, websites, and services they engage with and can opt out of data collection and targeting practices, regaining control over their digital footprints.
• Personalization: Web3 applications can be tailored to individual user preferences and needs, creating more immersive and engaging experiences. AI and machine learning techniques analyze user data to provide relevant recommendations, content, and services.
• Decentralized Governance: Web3 introduces a new governance model, allowing users to actively participate in decision-making processes. Decentralized Autonomous Organizations (DAOs) use smart contracts to automate governance and enable users to vote on proposals, influencing the direction of decentralized platforms.
• Advanced Identity Management: Web3 revolutionizes digital identity management by shifting ownership from centralized systems to users. Individuals control their own digital identities, with the ability to prove ownership of their data and assets.

While Web3 offers a promising vision for a more empowering and user-centric internet, it is still in its early stages of development. Next, we’ll explore some potential disadvantages to be aware of as Web3 continues to evolve.

Potential Disadvantages of Web3

While Web3 offers many potential benefits, it also presents several challenges:

1. Device Compatibility: Web3 applications often demand significant computational power due to their reliance on artificial intelligence and decentralized databases. This can hinder adoption on older devices with limited processing capabilities.
2. Steep Learning Curve: The shift to Web3 introduces new concepts and technologies. This change may create a learning curve for users unfamiliar with blockchain and decentralized systems.
3. Difficulty in Regulation: The decentralized nature of Web3 complicates regulatory efforts. Addressing issues like misinformation, cybercrime, and privacy can be difficult without a centralized authority.
4. Ownership Concerns: The question of data ownership in Web3 remains complex. While the concept emphasizes user control, concerns persist about the potential for centralized entities to retain significant influence. Jack Dorsey’s proposed Web5 model aims to address these issues by focusing on decentralized identifiers and data storage. For more information on Web5, please refer to this article.

How Is Web3 Different From Web2?

Web2 is characterized by social interaction and content sharing. Platforms like Facebook and Twitter rely on centralized servers to store and manage user data. In this model, users create and share content, but the companies that own the servers control the data.

Web 2.0 vs. Web 3.0: A Table Comparison

Criteria	Web 2.0	Web 3.0
Servers/Storage	Centralized databases and servers	Decentralized databases via peer-to-peer protocols
Data Ownership	Platforms own data (sold for marketing)	Users own data (control sharing)
Goal	Seamless user interaction	User empowerment (data control, monetization)
Payment Systems	Fiat currencies (USSD, EUR, GBP)	Cryptocurrencies (Bitcoin, Ethereum, Solana)
Personalization & Ownership	Cookies track users for personalized content	NFTs provide proof of ownership and value for digital assets
Social Networks	Social media platforms (Facebook, Twitter, Instagram)	Metaverse (merges physical, virtual, augmented reality)
Technologies and Programming Languages	HTML, CSS, JavaScript, Ajax	AI, Decentralized Protocols, Machine Learning
Features	Improved interactions, better acceptance on mobile devices, and the introduction of web applications.	AI-powered experiences, smooth interaction
Backend Data Intelligence	Relational databases (queries fetch data)	Blockchain immutable ledger technology

Future of Web3

The future of Web3 is bright, with increasing interest from both businesses and individuals in the decentralized technologies it offers.

The global Web3 market was valued at approximately $2.25 billion in 2023. However, it is projected to grow at a compound annual growth rate (CAGR) of 49.3% from 2024 to 2030, potentially reaching $33.53 billion by 2030. The rising demand for decentralized solutions, enhanced data privacy, and advancements in blockchain and artificial intelligence technologies are driving this rapid growth.

As Web3 continues to evolve, we can expect the development of more sophisticated Decentralized Applications (DApps) that cater to a wider range of user needs. Additionally, as Web3 becomes more integrated into daily life, regulatory frameworks are likely to adapt, balancing user protection with innovation.

Businesses stand to benefit greatly, particularly with the introduction of new revenue models rooted in tokenization and decentralized finance (DeFi). Consumers will also gain from this shift, enjoying more secure, inclusive digital spaces and genuine ownership of their digital assets.

Conclusion

Web 2.0 has significantly impacted various sectors, making the internet more interactive and engaging. It has revolutionized industries like eCommerce, creating thousands of millionaires and millions of jobs worldwide.

As we transition to the next phase with Web3, this evolution promises to further enhance user interactions with the web. However, a crucial question arises: Is users’ privacy truly private, or does Jack Dorsey’s criticism hold some truth? Since Web3 is still evolving, these concerns will be addressed as the technology progresses. In the meantime, exploring the concept of Web5 might provide additional insights into the future of the internet.

Identity.com

Identity.com aligns with the central theme of Web3: decentralization. One of our pursuits is a user-centric internet, where users have control over their data. More reason why Identity.com doesn’t take the back seat in contributing to this future via identity management systems and protocols. In fact, we are a part of the World Wide Web Consortium (W3C), the standards body for the World Wide Web. 

Through our work, Identity.com is helping many businesses by giving their customers a hassle-free identity verification process. Our open-source ecosystem provides access to on-chain and secure identity verification solutions. These solutions improve the user experience and reduce onboarding friction through reusable and interoperable Gateway Passes.

Therefore, if you’re interested in learning more about how we can help you with identity verification and general KYC processes, please don’t hesitate to get in touch.