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The structure of the web is being rebuilt with a new foundation. Web 2.0, which is built on Web 1.0, has made the user interface and operations much more interactive. In Web3, the web will be more interactive and personalized, but with a total reconstruction from centralized to decentralized, from third-party data monetization to individual data ownership. This is the blockchain-powered web.
What is Web3?
Web3 represents the attributes of blockchain, such as decentralization, cryptography, permissionless, and trustlessness. Rather than modifying current Web 2.0, Web3 introduces cryptocurrency, decentralized finance, and decentralized autonomous organizations to reinvent the internet’s business model. Despite the current web being perceived as broken and tends to favor tech giants such as Google, Meta (formerly Facebook), Amazon, Netflix, and Microsoft, Web3 suggests the beginning of a new era of the web.
Web3 Characteristics: What Makes it Different from Web2?
In the first two generations of the web, databases were centralized, which led to unethical tampering with user data (especially with Web 2.0) or government interference. With Web3, services and applications will operate, distribute data, and be accessible using decentralized databases stored on multiple computers worldwide.
The decentralized structure of Web3 is made possible through distributed ledger technology called the blockchain. Unlike traditional data storage methods, decentralized apps and services are hosted on blockchains. Transactions and activities are immutable and can be verified publicly, but users’ identities remain private. As a result of the blockchain, information can be made public while identity remains private. This is the foundation on which Web3 is built.
The web is now open to all users, creators, observers, etc., without needing the approval of a central authority. On web 1.0 and web 2.0, a central authority could easily limit a user’s access, but not anymore; blockchain has changed the narrative and empowered users.
4. Cryptocurrency Payment System
Before Web3, payments for goods and services had to be processed by credit payment systems. Now, with Web3’s crypto payment services, users can pay using crypto coins or native tokens of different applications. However, to make these crypto payments, users need a blockchain wallet to store and manage their digital assets, and to sign transactions securely.
5. Trust Minimization
The use of cryptography eliminates the need to trust a stranger before a web transaction. Web3 is a trustless system where you do not need to trust a stranger, a platform, or a third party for a transaction to occur. The system relies on encryption and the power of smart contracts to settle agreements or transactions. Through Web3, the statement “code is law” has been reinforced.
6. Decentralized Autonomous Organization (DAO)
Due to the lack of user input in Web 1.0, the Webmaster is the website’s “alpha and omega.” In Web 2.0, central authorities like the CEO and board of directors determine how a platform operates; what’s allowed and not. However, in Web3, the power is given to the users to vote and determine what is allowed on the platform. This involves features to add, projects to embark on, and more. To learn more about this concept, click to read extensively on Decentralized Autonomous Organization for a robust understanding.
7. Artificial Intelligence (AI)
Some artificial intelligence is currently in use in Web 2.0, but Web3 promises more personalization of the web through AI. Adding artificial intelligence creates a better relationship between apps/websites and users’ data, as users will individually own their data. This way, users can have a more personalized experience in such a way that if two users access the same website or app, the experience of “User A” might be different from “User B.” As a result, the app or website can tailor the content based on the user’s preferences.
These are just a few of the benefits and characteristics of Web3. However, this disruption to the present state of the web is still under development, and things will unravel with greater clarity in the next few years. It took roughly ten years for Web 2.0 to develop from the previous version; similarily, Web3 is expected to take a similar amount of time. Despite all the exciting developments, is everything about Web3 all shiny and exciting? Does this mean that it has no downside? Let’s take a closer look at Web3 and explore some of the potential disadvantages to watch out for.
The Benefits of Web3
Web3 offers a number of benefits over Web2 including:
- User transparency: Web3 is built on blockchain technology, which makes all transactions transparent and auditable.
- Privacy: Web3 users have more control over their data and who has access to it.
- Control: Web3 users have more control over their online experiences, including the apps and websites they use and the data they share.
- Personalization: Web3 applications can be personalized to each user’s individual needs and preferences.
- Voting: Web3 users can vote on issues and proposals that affect them, such as the governance of decentralized applications.
Potential Disadvantages of Web3
Web3 is still under development, and there are some potential disadvantages that users should be aware of. These include:
1. Device barrier
As Web3 uses artificial intelligence and operates on decentralized databases, it requires a high CPU level to make all these processes seamless. However, this presents a problem for devices with low CPU levels. If most websites and apps move to Web3, users with low-end devices will experience slow/lagging performance, or their devices will not be able to process the information.
2. Hard to grasp
New users or the elderly generation may have trouble understanding and adapting to Web3 since it changes both the backend and frontend of the web. There would be a complete overhaul of how we interact with the web, which the Baby Boomers and some members of the Gen X generation might find challenging.
3. Difficult to regulate
Due to the immutability of information and the decentralized nature of the web, fake news, cyber stalking, and other internet-based vices may become more common.
4. Ownership Concerns
Who controls users’ data in Web3? Is it the user, the individual blockchains that host the websites or the DApps (Decentralized Apps)? These questions or concerns may seem rhetorical, considering that Web3 is mainly about data privacy and user control. However, Jack Dorsey, the co-founder and former CEO of Twitter, disagrees. In his words:
“You don’t own “Web3.” The VCs and their LPs do. It will never escape their incentives. It’s ultimately a centralized entity with a different label. Know what you’re getting into…”
(Note: VCs are venture capital firms. LPs refer to limited partners, i.e., institutions or entities that invest their money with venture capital firms.)
The above tweet from Jack caused much uproar on Twitter. Traditional media featured it in their headlines for a while, and many people cited it as one of the greatest threats (barriers and disadvantages) to Web3. In response to the lies he claims Web3 proponents present to the public, Jack Dorsey introduced a new phase of the Web called Web5. Really? Web5? What of Web 4, you might ask? Nevertheless, in this Web5 article, you will discover not only what Jack said, but also how the concept of Web5 differs from Web 3.
How Is Web3 Better Than the Present State of the Web (Web 2.0)?
Without being distracted by Jack’s Web5 yet, a side-by-side comparison of Web3 and Web 2.0 will demonstrate how Web3 is superior to Web 2.0. Web3 promises decentralization, but is that all it can offer over Web 2.0? Web 2.0 revolutionized web technology and changed how we interact and communicate with the internet. It moved the users away from consumers to creators. A number of achievements have been made by Web 2.0. Considering these great fits, what are the differences between Web 2 and Web 3?
|Criteria||Web 2.0||Web 3.0|
|Centralized databases and servers govern applications, services, and users’ data.||Operates on decentralized databases via peer-to-peer protocols.|
|The platforms own the data, which can be sold for marketing purposes.||The users own their data and have control to share it with services or platforms they like.|
|The goal is to develop a community of people with seamless interactions.||The goal is to give power to users, empowering them to monetize their content while having full control over their data.|
|Fiat currencies serve as the primary means of payment, which depend on central banks and are fully subject to the government, such as USSD, EUR, and GBP.||Means of exchange aren’t subject to the government as different types of cryptocurrencies serve as payment between users, such as Bitcoin, Ethereum, and Solana.|
|Cookies help to track users, which helps to provide personalized content or behavior.||Non-Fungible Tokens are Users own and prove ownership of digital assets or activities through NFTs, which also attach values to them.|
|Social media platforms, such as Facebook, Twitter, and Instagram, are the means of socialization.||The Metaverse will merge physical, virtual, and augmented reality, creating a social community.|
Technologies and programming languages
|Improved interactions, better acceptance on mobile devices, and the introduction of web applications.||Human-like smooth interaction app experiences powered by AI and machine learning.|
Backend Data Intelligence
|Relational databases where queries are sent to fetch data.||Blockchain immutable ledger technology.|
Web 2.0 has made a significant impact to all sectors of development, making the internet more interactive and engaging. It boosted industries like eCommerce in a massive way. In addition to creating thousands of eCommerce millionaires, it has also created millions of jobs worldwide. As the next phase of the web, Web3, promises to increase these transformations and interactions between the users and the web. However, here is the salient question: is users’ privacy really private? Or does Jack Dorsey’s accusation have some elements of truth? As Web3 is still a work in progress, the truth will be known along the way. In the meantime, it’s worth checking out what Web5 is all about.
Decentralization being the central discussion of the next phase of the web aligns with what Identity.com represents. 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 that 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.