The internet has evolved dramatically since its inception. Across the range from static to dynamic pages/websites, the digital world has experienced a deep change. However, the next step for the web, the "Web3", is to be the most disturbing revolution to date.
Web3 is a developing concept of the internet which has the power to liberate users not only from, but to own digital assets as well.
Deconditionally, based on decentralized technologies, Web3 is an idea in which, in principle, the power to break free from the current centralized control of the internet is intended for the users. In this article, we'll explore what Web3 is, how it works, and how it connects with cryptocurrencies.
What is Web3?
By ExeedcollegeWeb3 is the third generation of the internet, and usually called "the decentralized internet. Different from Web2, which relies on the tightly confined data storage and management of Web2 companies (e.g., Facebook, Google, Amazon) to a great extent, Web3 is based on blockchain technology, in order to abstract the data storage and application services more profoundly.
The isolation from a central authority on the information control and validation space prevents the user information, identity, and digital asset control and ownership being hijacked, bypassed, and exploited by decentralized Web3 protocols.
Key Components of Web3
BY PixelplexBlockchain:
Blockchain technology is the foundation of Web3. It provides the capability to maintain data in a distributed ledger over multiple nodes rather than on a single centralized server. Blockchain offers transparency, resilience, and immutability, and therefore trustless transactions become possible.
Decentralized Applications (dApps):
A DApp is a program that runs on a decentralized, but not on a centralized, network. Such applications allow for a state of more direct user control of the data, and unlike intermediaries, it is clear that they are not exposed through it. Across decentralized financing (DeFi) dApps to decentralized social media dApps, a novel network interaction is being adopted by dApps.
Smart Contracts:
A smart contract is an unattended program written in which the conditions are stated in the program itself. If the following conditions are met the contract takes effect independent from a third party involvement. This power sits at the core of Web3, since it enables private, peer-to-peer communication in a decentralized setup.
Decentralized Identity (DID):
Web3 solves the problem of control over personal data by providing decentralization of identity systems. DIDs can be exploited to grant control and management of a user's digital identity, without, of course, requiring that the third party's power be located to ground it.
Non-Fungible Tokens (NFTs):
NFTs are indivisible items of digital content which can neither be duplicated nor purchased on a one-to-one basis. These tokens can be used on any asset, art, music, virtual property, etc.
NFTs enable content creators to directly monetize their work, providing a new kind of ownership in a virtual world, outside of traditional gatekeepers.
Web3 and Cryptocurrency: The Connection
Photo by Shubham Dhage on UnsplashWeb3 is intrinsically connected to the cryptocurrency ecosystem. Cryptocurrencies (e.g., Bitcoin, Ethereum) power the Web 3 engine. They provide peer-to-peer (P2P) transactions without any central authority, and thus follow the principles of decentralization of the Web3.
Most Web3 applications, and especially the decentralized finance (DeFi) applications, base their work on cryptocurrencies for the truthfulness of transactions and the movement of the value.
For example, in DeFi, it is possible for users to lend, borrow, or trade assets without any bank involvement. This is accomplished by the use of cryptocurrencies and smart contracts that, collectively, immune the authentication of transaction sequences.
With cryptocurrency, micro-purchases into Web3-applications are also possible, which suggests that it is possible to receive payment for services or digital products, where a single control point does not exist.
Further, thanks to the emergence of NFTs, the link between the association of Web3 and cryptocurrency has been improved. NFTs are typically purchased and exchanged through value-added cryptocurrencies, most notably Ethereum, which is by far and away the most popular blockchain on which NFTs are created and on which NFTs are traded.
Real-World Impact of Web3
Web3 can also enable transformations in a number of domains, e.g., finance, art, and politics. In the financial industry, Web3 technologies enable the realisation of decentralized finance (DeFi), which circumvents traditional financial gatekeepers by permitting peer-to-peer (P2P) lending, borrowing, and trading. This could lead to an increase in financial inclusion by enabling individuals to obtain services without reliance on banks or credit establishments.
In creative, Web3 brings creators new ways to sell their digital content directly to their audience consumers, using NFTs, instead of the traditional gatekeepers (galleries or streaming platforms). Such decentralization of the right to content ownership can be exploited in order to enable artists and content creators, of whom they are a magnitude more effective in their work.
In addition, Web3 implements the concept of Agent-Based Decentralized Autonomous Organisations [DAOs] i.e., the control of the decision-making process is transferred to the consensus of the community, rather than that of centralistic control.
DAOs allow individuals to participate in governance, which, through development and steering processes, affects projects in a distributed manner.
The Future of Web3
Despite these challenges, Web3 offers a promising future. As blockchain technology and easy-to-use tools continue to develop, Web3 possibly is a new generation of the web and provides us with a decentralized, secure, and self-managed digital experience.
Web3's focus on privacy, ownership, and autonomy is poised to change the way we interact with the digital world.
Web3 is a transfer of power from the control of centralized entities to the control of the end user, in which individuals can claim control of their data, identities, and belongings. Beyond cryptocurrency as its engine of growth, Web3 is expected to expand and democratize the Web, and create a fairer, more equitable, and transparent society.
