Web3

Web3 refers to the next generation of the internet built on blockchain technology, characterised by decentralisation, user ownership of data and assets, and permissionless access. It contrasts with Web2 (today’s internet dominated by centralised platforms like Google, Facebook, and Amazon).

What Is Web3?

The evolution of the internet is often described in three phases:

– **Web1 (1990s-2000s)**: read-only internet; static web pages; users were consumers
– **Web2 (2000s-present)**: read-write internet; social media, apps, user-generated content; but platforms (Google, Meta, Amazon) own user data and extract value
– **Web3**: read-write-own internet; users own their data, digital assets, and identities through blockchain

Core Principles of Web3

– **Decentralisation**: no single company controls the network; data is distributed across nodes
– **Ownership**: users own their digital assets (tokens, NFTs) via private keys; not stored on company servers
– **Permissionless**: anyone can participate without approval from a central authority
– **Trustless**: transactions are governed by code (smart contracts), not company policies
– **Interoperability**: assets and identities work across different platforms and blockchains

Web3 Technologies

– **Blockchain**: underlying distributed ledger
– **Smart contracts**: code-based rules replacing company policies
– **Crypto wallets**: user identity and ownership tool
– **NFTs**: proving digital ownership
– **DAOs**: decentralised governance replacing corporate hierarchies
– **DeFi**: financial services without banks

Criticisms of Web3

– Still largely theoretical; current Web3 UX is complex and difficult for average users
– Blockchain scalability limits practical mass adoption
– Dominated by venture capital investment, raising questions about true decentralisation
– Environmental concerns related to energy-intensive blockchains

Practical Example

In Web2, a musician publishes music on Spotify. Spotify owns the distribution, sets royalties, and could remove the artist’s music. In Web3, the musician mints their music as NFTs and sells directly to fans through a decentralised platform. Smart contracts automatically pay royalties on every resale. The artist retains full ownership and control.

Key Takeaways

– Web3 is a blockchain-based vision of the internet where users own their data and digital assets
– Built on decentralisation, permissionless access, and smart contract-based rules
– Contrasts with Web2 platforms that centralise data and value extraction
– Enabled by blockchains, crypto wallets, NFTs, DeFi, and smart contracts
– Still early-stage; significant usability, scalability, and centralisation challenges remain