Web3, also known as the decentralized web, is a vision for a new iteration of the internet that seizes control from the corporations that currently control it, and returns it back into the hands of the users.
The current version of the internet, web2, is currently dominated by a handful of centralized corporations that control the flow of information and commerce. Alphabet, Meta, and Amazon have become gatekeepers of web2, gathering and monetizing vast amounts of personal data, and exerting significant influence over what people see and do online. This has led to concerns about privacy, data security, and monopolistic practices.
Web3 aims to change all that. By harnessing decentralized systems, web3 aims to redistribute power among its many participants, making it difficult for any single entity to control the flow of information or to manipulate the system. Decentralization also makes possible new, more equitable business models that reward users for their contributions, instead of exploiting their data and attention.
Web3 is made possible by public and decentralized blockchains. A blockchain is a decentralized digital ledger able to record any type of activity as "transactions" in a secure, transparent, and tamper-proof way. With blockchain, the trust in a system is built into the technology itself, rather than relying on intermediaries like banks, governments, or corporations. This allows for new applications that can be built on top of blockchain, such as decentralized exchanges, tokenized assets, and decentralized autonomous organizations (DAOs).
Another important aspect of web3 is the concept of self-sovereign identity. With web2, users typically have to create accounts with various companies and entrust their personal information to these entities. With web3, users can create and control their own digital identity, without having to rely on centralized intermediaries. This opens up new possibilities for privacy, security, and control over one's online presence.
Another exciting aspect of web3 is the potential for new decentralized applications (DApps) that can be built on top of blockchain. Unlike traditional apps that run on centralized servers, DApps run on decentralized networks, making them more secure, resilient, and resistant to censorship. These applications are designed such that the security and governance of them is dependant on their users. As such, users will get paid for their contributions—most commonly, in the form of cryptocurrency. Some of the most popular DApps today include decentralized exchanges, decentralized finance (DeFi) platforms, and social media networks.
The growth of web3 is being driven by several trends, including the increasing popularity of cryptocurrencies, the rise of decentralized finance (DeFi), and the growing interest in decentralized autonomous organizations (DAOs). DeFi is a new form of finance that leverages blockchain technology to create new financial instruments and applications that are more transparent, secure, and accessible to a wider range of users. DAOs are decentralized organizations that run on blockchain and are governed by rules encoded in smart contracts. This allows for new forms of decentralized governance, where decisions are made through consensus, rather than relying on centralized intermediaries.
Despite the many exciting possibilities of web3, there are also several challenges that must be addressed. One of the biggest challenges is scalability, as decentralized systems can be slower and less efficient than centralized systems. Another challenge is user adoption, as decentralized systems can be more complex and difficult to use than traditional apps. There is also a need for more user-friendly wallets and interfaces that make it easier for people to manage their digital assets and participate in decentralized systems.
These challenges are being addressed, but there's still a ways to go before things feel as effortless as they do on web2. After all, it's in their best interests to make your life as easy as possible when they're raking in billions selling your personal data.
As tech giants take an increasingly large slice of the global economic pie, and people's data becomes one of earth's most valued resources, a decentralized and democratized web is increasingly becoming a matter of necessity. Because like the roads we drive and the air we breathe, something so fundamental to life in our modern world should not be privately owned.
Web3 offers us an alternative to the dark path we're walking down, an alternative in which people control their own data, and are given a seat at the decision-making table of the websites and apps they make valuable. Of course, web3 isn't a perfect alternative yet, but it's a damn sight better than where we're headed—unless you're into what technofeudalism has to offer.