What is Web3, and why should you care?
Web1 and Web2 (sometimes known as Web 2.0) are terms for earlier internet eras. Web1 spans the 1990s and early 2000s, and static sites ruled the roost. Web2, on the other hand, refers to the era from the early 2000s to the present, when Big Tech companies control the most prominent online hubs.
In a Web3 world, people control their data and switch from social media to email to shopping using a single personalized account, creating a public record on the blockchain of all of that activity.
“To the average person, it does sound like voodoo,” said Olga Mack, entrepreneur and blockchain lecturer at the University of California, Berkeley. “But when you press a button to switch on lights, do you understand how the electricity is made? You don’t have to know how electricity works to understand the benefits. The same is true of the blockchain.”
So, what is Web3?
Web3 refers to a potential new iteration of the internet that runs on public blockchains, the record-keeping technology best known for facilitating cryptocurrency transactions. The appeal of Web3 is that it is decentralized so that instead of users accessing the internet through services mediated by the likes of Google, Apple, or Facebook, it’s the individuals themselves who own and control pieces of the internet.
Web3 enhances the internet as we know it today with a few other added characteristics. Web3 is verifiable, trustless, self-governing, permissionless, distributed and robust, and stateful. In Web3, developers don’t usually build and deploy applications that run on a single server or that store their data in a single database (usually hosted on and managed by a single cloud provider).
Instead, Web3 apps are built on blockchains, decentralized networks of numerous peer-to-peer nodes (servers), or a hybrid of the two. These programs are known as dapps (decentralized apps), and you’ll hear that term a lot in the Web3 community.
Network participants (developers) are rewarded and compete to deliver the highest quality services to anyone using the service to establish a stable and secure decentralized network. When you hear about Web3, you’ll notice that cryptocurrency is often part of the conversation. This is because cryptocurrency plays a big role in many of these protocols. It provides a financial incentive (tokens) for anyone who wants to participate in creating, governing, contributing to, or improving one of the projects themselves.
These protocols may often offer a variety of different services like compute, storage, bandwidth, identity, hosting, and other web services commonly provided by cloud providers in the past.
People can make a living by participating in the protocol in various ways, at both technical and non-technical levels. Consumers of the service typically pay to use the protocol, much like they would pay a cloud provider such as AWS today. Except for Web3, money is distributed directly to network participants.
None of this means that Web3 technology isn’t useful or that genuinely new applications are not being developed. It’s closer to the opposite: some of the flashier elements that are attracting comment and critique are overshadowing the new, real, and less glamorous improvements that decentralization technologies can bring.