The internet has come a long way since its 1960s beginnings as a tool for sharing information between scientists and academics.
Today, the internet is used by billions of people around the world for everything from shopping to socializing to staying informed.
But what if the internet could be for true ownership, privacy, and freedom?
That’s the promise of Web 3.
In this article, we will look at
- What Web 3 is, how it works, and why it is called the Internet of the Future.
- Some of the criticisms that Web3 faces and what it will take to make it a reality.
- How you can start making money in Web3
What is Web3 and How Does It Work?
Web3, also known as the third-generation Internet, is the Internet of the people, by and for the people.
Before explaining Web3, we need to understand what brought about Web3 and why Internet users are eager to have Web3.
What are Web1, Web2, and How are They Related to Web3?
The Internet as we know it today began in an era known as Web1.0, the term used to refer to the first stage of development on the World Wide Web characterized by simple static websites.
During that time, most websites were built with static HTML pages and a few simple styles embedded in the HTML markup.
These static pages that didn’t offer interactive features changed based on website visitor behavior.
At that point, websites were primarily informational.
Users could view content created by others, but they could not interact with it or create their content.
However, as time progressed, people began to see the need for interactivity, improved user experience, and the ability to post their content on the web.
As a result, another era of the Internet, known as “Web 2,” was introduced.
Web2, known as the second generation of the Internet, allows the creation of websites that emphasize user-generated content, ease of use, participatory culture, and interoperability for end-users.
It was coined by Darcy DiNucci in 1999 and later popularized by Tim O’Reilly and Dale Dougherty at the first Web 2.0 Conference in 2004.
Web2 allows users to interact and collaborate through social media dialogue as creators of user-generated content in a virtual community.
Being the current generation of the Internet, examples of Web 2.0 features include
- social networking sites such as Facebook, Twitter, Instagram, etc.,
- blogs, wikis, etc.,
- video-sharing sites such as Youtube.
- image-sharing sites such as Flickr
- hosted services such as email hosting services, virtual private servers, cloud hosting, etc
- Web applications such as Trello, Gmail, Netflix, etc
- collaborative consumption platforms
- mashup applications.
The problem of Web2.
Despite its many appealing features, Web2 has significant drawbacks, such as data privacy concerns, a lack of transparency in the use of data, and centralized control over users’ data.
These drawbacks have forced individuals to seek better solutions to guarantee their rights on the Internet.
For example, have you ever considered who owns the information, chat histories, pictures, and videos you share on platforms like Facebook and Twitter?
The truth is that while you are the legal owner of this content, Facebook, Twitter, or any other social media platform can decide to block you from your account and delete all of your data without any warning or explanation.
For example, in 2021, Facebook deleted the account of a Palestinian news outlet called Shehab News Agency. The agency had over 6 million followers on Facebook and was known for its coverage of the Israeli-Palestinian conflict. Facebook did not explain the account’s deletion but it is believed to be part of a larger crackdown on Palestinian content.
This is why users have started looking for better options to exclusively manage their data and ensure their privacy and control over their content.
Thanks to the creation of blockchain technology and Ethereum co-founder Gavin Wood, who coined the term “Web3” in 2014, the third generation of the Internet.
Web3 is called the Internet of the Future because it envisions a decentralized, user-centric ecosystem that prioritizes privacy, security, and data ownership.
This third generation of the Internet is built on decentralized and permissionless technology.
Permissionless technology is the sense that no central authority controls the web domain, and all data is stored on a distributed network of computers.
Users can use applications on the Internet without seeking permission from a central authority.
Developers can build applications on the Internet without seeking permission from a central authority.
Furthermore, it offers a read/write/own version of the web, in which users have a financial stake and more control over the web communities they belong to.
Web3 promises to transform the online experience as dramatically as PCs and smartphones did.
How to Get Started WIth Web3
If you are interested in getting started with Web3, there are a few things you need to do.
First, create a non-custodial Web3 wallet like Metamask, Trust Wallet or Coinbase Wallet.
These software applications allow you to store your cryptocurrency without relying on a third party and interact with decentralized apps (dApps).
These wallets are easy to create; most are accessible on mobile phones and computers.
Learn how to create these wallets.
Once you have a Web3 wallet, you can explore the decentralized Internet.
Speaking about the critical applications of Web3, it incorporates technologies and principles such as artificial intelligence (AI), the semantic web, blockchain, and machine learning to create a new version of the Internet.
The new version of the Internet with Web3 can allow decentralized communication and interaction among users and applications.
At the same time, web3 has also evolved as a new internet that can learn precisely what you are trying to search for and deliver accurate results without a central authority managing your data.
What Are the Components of Web3?
Decentralized Finance (DeFi) is a new class of Web 3.0 financial services built on distributed ledger networks using smart contracts.
DeFi encompasses the tokenization of financial products (e.g., securities) and, in the future, the trading of any real-world asset (e.g., virtual luxury goods).
It operates as a financial system without a central authority, offering various financial products and services without the need for a centralized authority such as a bank.
While Web3 is predicated on using blockchain technology to create a more equitable Internet, decentralized finance is Web3’s version of a more transparent financial system.
Smart contracts are crucial in today’s blockchain and Web3 ecosystems.
They enable users to interact online via the blockchain and the many DApps, setting the conditions for decentralized transactions without needing a centralized third-party authority for verification.
In other words, smart contracts govern the rules of any Web3 agreement.
These types of contracts form the basis for all dApps built on the blockchain, and they’re typically written in custom languages such as Solidity (for Ethereum), Cadence (for Flow), C++, and Rust.
They tend to be much simpler than traditional programs, but the risks are much higher – a single, smart contract bug can drain millions of dollars in minutes.
Digital assets like cryptocurrency are one of the components of Web3.
Cryptocurrencies such as Bitcoin (BTC) and Ethereum (ETH) are digitally-native currencies secured by cryptography and operate on the blockchain, making them impossible to counterfeit or double-spend.
There are currently over 10,000 crypto tokens in existence.
Non-Fungible Tokens (NFTs) are another critical component of Web3.
These forms of tokens are unique digital assets stored on a blockchain.
Unlike crypto, every NFT has a distinct value and contains specific information about its ownership and authenticity.
Web3 enables true ownership of cryptocurrencies and NFTs, providing a way to prove ownership and authenticity of digital content that was not possible in the Web 2.0 model.
By allowing creators to tokenize their work, NFTs are democratizing the digital economy, arguably giving economic power back to creators and users, which aligns with the principles of Web 3.0.
Decentralized applications, or DApps, run on the blockchain and perform tasks such as creating tokens, trading crypto, storing data, creating decentralized marketplaces, etc.
Decentralized Autonomous Organizations (DAOs) are run by rules encoded as computer programs called smart contracts.
These smart contracts are stored on a blockchain and are executed automatically when certain conditions are met.
Meanwhile, these rules can be anything from how the DAO is funded to how decisions are made.
The community vote for against rules before they are implemented.
Once the rules are set, they cannot be changed without the approval of the DAO’s members.
These organizations are more efficient, transparent, and democratic than traditional organizations.
Digital Identity and Ownership
Digital identity is another popular component of Web 3 that allows users to manage their digital identities in a decentralized way.
Decentralized identifiers (DIDs) are globally unique identifiers stored on a blockchain and are essential in creating users’ Web3 identities.
Users can create digital identities that are linked to their real-world identities or choose to remain anonymous. This system can potentially revolutionize how we interact with the Internet.
Interoperability is the ability of different blockchains to communicate and exchange data.
This is essential for developing a truly decentralized Web3, as it allows users to move their assets and data from one blockchain to another.
Without interoperability, users will be locked into specific blockchains and unable to take advantage of the full range of available decentralized applications in other blockchains.
There are several ways to achieve interoperability in Web 3.
One method is using a bridge, software that connects two or more blockchain networks.
These bridges allow users to transfer assets between chains but can be slow and expensive.
Another technique is to use cross-chain protocols designed to allow for the seamless transfer of data and assets between blockchains.
This is a more scalable and efficient approach than bridges, but it is also more complex to implement.
The metaverse is a virtual world that combines the Internet, virtual reality(VR), and augmented reality(AR) to create a single immersive experience.
In the metaverse, users can own their digital assets, such as land, avatars, and items, which will be stored on the blockchain.
This will give users more control over their data and experiences in the metaverse.
Meanwhile, it could also be used for various purposes, such as gaming, education, social networking, and work.
Private and Public Keys
The public key is a one-way function that can encrypt data, while the private key is the only way to decrypt that data.
This allows for secure communication between two parties, as only the private key holder can decrypt the encrypted data with the public key.
In Web3, public and private keys are used to identify users and sign transactions.
The public key is the address of a user’s wallet, and the private key is used to sign transactions that send or receive funds.
This ensures that only the private key owner can authorize transactions, which helps prevent fraud and theft.
A Web3 wallet is a digital wallet that allows users to store, send, and receive cryptocurrency and other digital assets on the blockchain.
Web3 wallets are an essential part of the Web3 ecosystem as they interact with decentralized applications (dApps), which run on the blockchain and are not controlled by any central authority.
Popular examples of Web3 wallets are Metamask, Exodus, Trust Wallet, Phantom, etc.
Artificial Intelligence (AI)
Artificial intelligence (AI) is also an important part of Web3, as it can be used to improve the security and privacy of Web3 applications.
For example, AI can detect and prevent fraud, spam, and other malicious activities.
This technology can also encrypt and anonymize user data, making it more difficult for hackers to steal or misuse.
Advantages of Web 3.0
Transparency: Unlike traditional centralized settings, where all sensitive data is visible to a few selected people, Web3 gives users complete access to how transactions and other actions are carried out.
Decentralization: Web3 technologies are built on decentralized systems, meaning there is no single point of control. Every participant on the network collectively manages all decision-making processes.
Privacy: Another advantage of Web 3.0 is the enhanced privacy and anonymity it offers users. This is particularly important for sensitive transactions that include financial transactions.
Data Control: This is arguably the most essential benefit of Web3 technology.
It enables users to solely own their data and choose which data to share and with whom.
Disadvantages of Web 3.0
Complexity: Although Web3 has many advantages, it also has some drawbacks. One of the most common concerns, especially among beginners, is that it is difficult to understand.
Lack of Interoperability: Currently, Web3 is not interoperable with most Web2 applications and platforms. As Web3-based websites and applications become more popular, existing businesses must upgrade their systems to accommodate blockchain technology to stay competitive.
Regulatory Complexities: The Web3 industry is still developing; hence, countries worldwide must formulate new regulations to govern critical aspects like data ownership and security.
High Transaction Costs: The majority of Defi platforms charge users some fees to access their products and services. These fees can sometimes be expensive due to the need for high computing resources and the cost of gas.
How Web 3.0 Will Change Our Lives
More Control Over Personal Data
It’s important to note that the current “centralized internet” is managed and controlled by large companies like Google, Meta, and Microsoft.
That means every piece of content and piece of information we share online does not completely belong to us because these giants can decide to take them down at any point.
With the emergence of Web3, people will have more control over their data and maintain absolute control over it.
Also, they can choose who has access to their data and what they can do with it.
New Apps, Better Interfaces
Web3 will enable new types of applications that were not possible before.
For example, decentralized finance (DeFi) applications allow people to enjoy various financial transactions such as lending money, borrowing money, and swapping cryptocurrency and derivatives without intermediaries.
This is done through smart contracts.
By removing intermediaries, DeFi can make financial services more accessible and affordable to people worldwide.
It also provides greater transparency and security than traditional financial systems.
In addition to decentralized finance, Web3 will enable new applications in other areas, such as gaming, social media, entertainment, and e-commerce.
Real-World Applications: How Web 3 is Shaping Industries
The applications of Web3 have gone beyond the online space; they are already shaping industries in many ways and transforming how we do business by enabling peer-to-peer transactions without intermediaries.
Gaming and Entertainment
The gaming industry is one of the top industries that the third generation of the Internet is transforming.
It enables players to own their in-game assets.
This means that players can buy, sell, and trade their assets with other players without intermediaries.
People can now play online games, earn in-game tokens, and use them to build their wealth.
This in-game wealth can be sold for cryptocurrency, and the cryptocurrency can be exchanged for fiat.
Example of a project whose idea is Axie Infinity.
Web3 also transforms the art world by enabling artists to sell their digital art as non-fungible tokens (NFTs).
This means that artists can earn money from their digital art without the need for labels, which might unfairly profit from creators.
Artists also sell event tickets inform of NFTs. Imagine you paid for an event and will be given an NFT; this NFT will be what you will display at the event entrance before being allowed in.
Artists also give their fans access to their music for only those who purchase their NFT.
Healthcare and Identity Management
Web3 also shapes the healthcare industry by allowing patients to own their medical data exclusively.
As a result, patients can control who has access to and how their medical data is used while ensuring secure and transparent medical data sharing between patients and healthcare providers.
Similarly, it is redefining identity management by enabling decentralized identifiers (DIDs) that provide a way to verify your identity without relying on centralized institutions.
Finance and Banking
The finance and banking industries are another important sector that Web3 is transforming.
By enabling decentralized finance (DeFi) applications, users can connect directly to financial systems without intermediaries like governments, central banks, and other traditional institutions.
This means that users can save money on transaction fees and reduce the risk of fraud or the possibility of unnecessarily placing limits on their financial activities.
Supply Chain and Logistics
The automated process of Web3’s fusion of AI, smart contracts, and blockchain prevents human errors and saves time, money, and resources.
Web3 enables seamless storage and accessibility of all the relevant information and documents, improving trustworthiness and coordination among all the supply chain participants.
In addition, it eliminates paperwork and risk while increasing transparency throughout the supply chain management and logistics mandate.
There is a wide range of opportunities for applications of Web3 and blockchain technology to support the urgent energy transition.
For example, Shell and several other global firms have launched Avelia, a book-and-claim solution to help scale sustainable aviation fuel supply.
Decarbonization requires decentralization.
Addressing climate change has one requirement above all: decarbonization of energy systems.
This requires the further electrification of economies and energy-system decentralization.
Given the nature of renewable energy, especially solar and wind power, the electricity generated is not always readily available (without storage) and is often geographically removed from where it is needed.
Moreover, with the advent of prosumers—consumers who also generate energy that can feed back into the grid—existing energy systems need a deep overhaul.
Fortunately, Web3 technology solves this problem.
What Web3 Might Mean for Companies
Web3 can potentially bring about significant transformations for companies across various industries.
It represents a paradigm shift in how businesses operate, engage with customers, and generate value.
Here are some ways in which Web3 might impact companies:
Decentralization and Autonomy
Web3 technologies like blockchain and smart contracts enable companies to decentralize their operations.
This means that decision-making processes, governance structures, and even ownership models can become more distributed and autonomous.
Companies may reduce their reliance on traditional hierarchical structures and empower stakeholders to participate in decision-making.
An excellent example of how companies can use this technology to create a DAO is creating a platform that allows users to invest in real estate.
A DAO would govern the platform, allowing investors to vote on which properties to invest in and how to manage them.
The DAO would manage the investment portfolio, collect rent, and distribute profits to investors.
New Business Models
Web3 opens up possibilities for novel business models.
Companies can tokenize their assets, products, or services, creating digital representations that can be traded on blockchain-powered marketplaces.
This can lead to the emergence of decentralized and token-based economies, allowing for new revenue streams and monetization strategies.
Enhanced Transparency and Trust
With blockchain’s transparent and immutable nature, companies can establish higher levels of trust with their customers, partners, and investors.
Supply chains, transaction histories, and data records can be securely and verifiably stored on the blockchain, reducing fraud and increasing accountability.
Direct Peer-to-Peer Interaction
Web3 fosters direct peer-to-peer interactions without the need for intermediaries.
Companies can engage directly with customers, eliminating intermediaries and reducing fees.
This can lead to more personalized and meaningful relationships between companies and customers.
Data Ownership and Privacy
Companies will need to adapt to this new paradigm by giving users greater control over their data while ensuring compliance with regulations.
What Are the Criticisms of Web3 Technology?
It’s rife with speculation.
Critics have continuously argued that Web3 is dominated by speculators in cryptocurrencies and other digital assets like non-fungible tokens (NFTs); it’s an unregulated environment in which the actions of scammers and fraudsters derail the best of intentions.
This criticism is based on the belief that Web3 is still in its early stages and that many applications are still hypothetical.
The technology isn’t practical.
Many hold the belief that Web3 technology isn’t practical.
They argue that most of these Web3 applications are still in their early stages and haven’t been widely adopted.
Consequently, they doubt whether Web3 can deliver on its promises of a more secure, private, and decentralized web.
Web3 is expensive
Web3 has also faced criticism for its high costs, attributed to the gas fees on the Ethereum blockchain.
Some Web3 service providers require users to pay fees in cryptocurrency, often before they can access the services.
For instance, Web3 gaming platforms like Axie Infinity allows users to play games and earn cryptocurrency rewards.
However, it typically charges a fee to purchase in-game items or to participate in gameplay.
The development of decentralized applications (dApps) on Web3 requires specialized knowledge and infrastructure, which are costly.
As a result, small businesses and individuals find it challenging to engage with the Web3 ecosystem.
Lack of usability
Web3’s decentralized nature allegedly challenges users to interact with the network, resulting in a poor user experience.
Complex interfaces and confusing terminology compound this issue, propelling a growing demand for more intuitive interfaces and better developer tools.
Web3 is currently terrible for the environment.
This blockchain-powered, decentralized metaverse is also criticized for its negative environmental impact.
The energy consumption of Web3 can be high due to the Proof-of-Work (PoW) consensus mechanism used by some blockchain networks.
PoW requires miners to solve complex mathematical problems, which consume significant energy.
Meanwhile, some blockchain networks are transitioning to Proof-of-Stake (PoS), which consumes less energy and is more environmentally friendly.
Lack of adequate consumer protection
Another criticism of Web3 is the lack of adequate consumer protection.
The decentralized nature of Web3 makes it challenging to regulate and enforce consumer protection laws.
This lack of regulation exposes consumers to fraud, scams, and loss of funds.
The unregulated and decentralized nature of the blockchain space has made it easy for developers to launch projects with the end goal of scamming their community.
And most times, these developers are untraceable because they are anonymous.
Scammed users cannot recover their funds; they just have to cut their losses and move on.
Nevertheless, some countries, like the United Kingdom, are at the forefront of formulating comprehensive rules and regulations that provide consumer protection.
It enables harassment and abuse.
The lack of central control and access to data would make policing cybercrime, such as online harassment, hate speech, and child abuse images, nudes, even more difficult.
Experts deem this a serious concern that must be addressed as technology evolves.
User error and irreversibility
User error and irreversibility are arguably the most common criticisms of Web 3.
This means that if a user makes a mistake, it cannot be reversed because Web 3 is based on blockchain technology, designed to be permanent and tamper-resistant.
For instance, it is irreversible if you want to send USDT to a friend’s address and mistakenly send it to the wrong address. Your USDT is gone forever.
Therefore, users must be careful when using Web 3 applications to avoid making irreversible mistakes.
What is a Web3 browser, and how does it work?
A Web3 browser is an important part of the Web3 ecosystem.
This browser allows users to access and interact with decentralized applications and smart contracts because it is built on blockchain technology.
Web3 browsers are also essential for people who work with, invest in, or use cryptocurrencies like Bitcoin.
They take power away from centralized apps and browsers, which frequently exploit users’ data without adequately compensating them.
In contrast, Web3-based browsers do not track users’ activities, utilize or sell their data.
Some have a built-in cryptocurrency wallet allowing users to manage their digital assets while enjoying a seamless internet browsing experience.
Additionally, decentralized browsers provide several ways for users to monetize their time on the Internet, including earning cryptocurrency through browsing and participating in decentralized finance (DeFi) protocols.
Examples of Web3 Browsers
Opera Web3 browser
The Opera Web3 browser is a crypto-friendly avatar of its previous version.
It offers a pleasant, private, and secure Web3 experience if you are a crypto-curious and crypto-savvy user.
You can expect a unique and safe Web3 experience with features such as a secure clipboard, a malicious-address checker, and phishing protection.
Puma Web3 browser
Puma is another popular Web3 browser with an impressive 750k downloads.
The browser claims to be designed to be a forward-thinking browser that prioritizes ease of use with new crypto protocols and LLMs (PAAL Large Language Model) on mobile devices.
What sets Puma apart is its native support for IPFS (Interplanetary File System), HNS (Handshake), and ENS (Ethereum Name Service), which can help users access p2p- and ownership-based economies with ease.
Meanwhile, Puma clearly states on its website that it is striving towards enabling 1 billion people to participate in these economies and making their browsing experience even smarter.
Brave Web3 browser
The Brave Web3 browser is a free and open-source web browser developed by Brave Software Inc.
It is built on the Chromium web browser and is popular for its ability to block website trackers and remove intrusive internet advertisements.
The browser also has a built-in ad-blocker, allowing users to earn cryptocurrency by viewing privacy-respecting ads. It also has a ” Shields ” feature that blocks third-party cookies, fingerprinting, and malware.
Osiris is a web browser focusing on privacy, security, and speed.
It is built on the Chromium open-source project, just like the Brave Web3 browser, and includes features like ad-blocking, anti-tracking, and an encrypted proxy.
The Osiris browser boasts hyper-speed browsing, 3x to 7x faster than other browsers.
It also blocks 90% of intrusive ads and protects your online activities from being tracked.
Additionally, the Osiris browser can help you save money by reducing your data usage, and it protects your sensitive private information from forced extraction.
How You Can Make Money in Web3
There are numerous ways to make money in Web3, but I will classify them into two categories.
- You can make money in Web3 by learning a skill and offering then as a service.
- You can make money in Web3 by investing money in projects.
The following are skills you can learn and offer in the Web3 space.
- Content writing
- Community management
- Social media manager
- Solidity developer
- Crypto researcher
- SEO Content Writer
- SEO Copywriter
- Graphics designer
- UI/UX Designer
- Software developer.
- Market Analyst
2. You can use The following investment vehicles to make money in Web3.
- Market making
- Spot trading
- Futures trading
- Airdrop hunting
I wrote a practical piece on two strategies to make money in crypto and how to farm airdrops properly.
Frequently asked questions (FAQs)
Who is the founder of Web3?
There is no single founder of Web3. However, the term was coined by Ethereum co-founder Gavin Wood in 2014 before gaining massive interest in the crypto space in 2021.
What does Web3 mean for users?
Web3 aims to give users more control over their data and online experiences.
It offers a read/write/own version of the web in which users have a financial stake and more control over the platforms they belong to.
What is Web3 used for?
Web3 is used for various applications, including cryptocurrencies, NFTs, DAOs, decentralized finance (DeFi), and more.
What is Web 3.0, in simple words?
Web 3.0 refers to the third generation of the Internet, built on blockchain technology and decentralized and distributed networks.
Why is Web3 Important?
Web3 is important because it aims to create a more decentralized and equitable internet that gives users more control over their data and online experiences.
Who are the big players in Web3?
There are many companies and organizations involved in building Web3 technologies. Some of them are;
- Unstoppable Domains
- Binance Smart Chain, and more.
What apps are Web3?
Many apps are being built on Web3 technologies. Some of them include;
- Cryptocurrency wallets
- NFT marketplaces
- Decentralized exchanges (DEXs)
- DAOs, and more
Is Web3 a Bitcoin?
Web3 is not Bitcoin. Bitcoin (BTC) is the world’s largest cryptocurrency by market cap and was created in 2009.
BTC was created to reward network participants on the Bitcoin blockchain and provide decentralized currency for the world.
Web3 refers to the third generation of the Internet, built on blockchain technology and decentralized networks.
Are blockchain and Web3 the same?
Blockchain and Web3 are not the same. Blockchain is a technology that underlies many Web3 applications.
However, not all blockchain applications are part of the Web3 ecosystem.
Why is Web3 the future?
Web3 is the future because it offers a more decentralized and equitable internet that gives users more control over their data and online experiences.
Web3 is becoming the future as more people value their privacy.