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What is Web 3.0?

Today, you can often hear the widespread expression “the new Internet" or a Web 3.0. The Metaverse, DeFi, and even NFT are all tied to it in some way. The rapid technological progress, the growing interest to the AI concepts, cyber and virtual spaces form the prerequisites for the creation of an Internet network based on qualitatively new principles.

It assumes completely different principles of user interaction and inner operation. At once it’ll offer alternatives for solving the copyright, confidentiality, and freedom of expression issues. Let's try to figure out what the new generation of the Internet can look like and what opportunities the transition to Web 3.0 can open up.

The history of the Internet: how it started

The Internet, like any other technology, is evolving, acquiring new qualities and properties. Before it took familiar forms, it went through several developmental stages, which, as a rule, are divided into two main periods.

Web 1.0, 1991–2004

This is the very beginning of the World Wide Web's existence. Its first form was least adapted to the user’s communication. During this period ordinary people with their first computers got access to the WWW. Before that it was available only to programmers.

Web-page from the Web1 era.

🔸 Web 1.0 was a network consisting of static web pages with already-prepared information. The sites were completely modernized by the developers, and only they could modify them.

🔸 Users could, for the most part, only explore pre-existing information; they were unable to share their own content or leave comments and feedback.

🔸 The Internet itself was more of a library of content than a dynamic space; the first period of the development of the Internet is even informally called the "network for reading".

🔸 The Web1 era technologies were not yet powerful enough, so nobody paid attention to the design. Programmers rely heavily on GIFs and simple animations to achieve the goal of content diversification.

🔸 Trust in the network remained low, and the users were aware of the risks regarding the privacy and security of their data. A completely new technology caused more questions and concerns than interest in ordinary people's minds.

Web 2.0, 2004-present

Web 2.0 is the era of the Internet we are familiar with. It is distinguished by the widespread availability of video hosting, blog services, and social networking sites. By this time, all groups of users (ordinary users, web developers, and owners of large Internet portals) had expanded their opportunities in web space. 

The Amazon site is a typical example of Web 2.0, with a key focus on design and user experience.

🔹 Web 2.0 is a network with functionality tied to interaction and communication. Users have the opportunity not only to perceive information but also to leave likes and comments.

🔹 The Internet is now a dynamic and convenient space where users can share their own content, join groups, communicate via instant messengers, or in audio and video format.

🔹 New technologies and high production capacities have made it possible to completely transform published content. The key role is given to the web pages’ design as well as the interface’s intuitiveness and accessibility.

🔹 Large companies took a tremendous place in Web 2.0 by virtue of their active expansion in the new web space. As a result, the internet has become a part of the general market's promotion of goods and services. In addition, any company's website turned into its business card and a place where companies could interact with customers.

🔹 Ordinary people now have constant access to the internet thanks to the proliferation of smartphones and mobile gadgets. The Internet increased its level of user trust. But progress uncovered one terribly arcane feature. Large companies have begun to collect user information, for instance, data about their behavior, in order to sell it to third parties. As a result, users' data became an object of commerce and exchange.

The Internet of the future: Web 3.0 key messages

It makes sense that Web1 and Web2 someday will be replaced by something else: technologies are developing, and sooner or later there will be a transition to the third Internet generation era. It is assumed that Web 3.0 will become a decentralized Internet network built on the blockchain (a technology for recording data in block chains) and the cryptocurrency economy. The term "Web 3.0" was first used in an article written by Gavin Wood, Ethereum co-founder and Polkadot creator, in 2014. He criticized the high degree of user control on the network provided by IT giants and Internet companies.

In “Why We Need Web 3.0” Gavin Wood says: "Take how we pay for things online. On Web 2.0, you are not empowered to make payments per se. In reality, you must contact your financial institution to do it on your behalf. You are not trusted to do something as innocuous as pay your water bill. You are treated like a child appealing to a parent".

Wood sharply criticized the modern Internet concept because the information posted by users becomes the property of private companies. They can use data for selfish purposes, including selling it to advertising agencies. Furthermore, users require the assistance of the middlemen in order to perform any actions, such as paying for purchases and publishing a post.

The main concept of Web 3.0 is complete decentralization. This will get rid of third parties in all transactions and processes, as well as create an independent and self-sufficient global network. This approach will ensure the users’ privacy and prove that third parties will never get access to their data. Technologies that form a distributed network are already being tested. It assumes that the data is not stored on the servers of IT companies but is encrypted and distributed to all connected devices: personal computers, tablets, and users’ smartphones.

Here are the other Web 3.0 main principles:

📃 Open source. The program code of all online platforms will be available to everyone. Any user with the basics of programming knowledge will be able to make sure that the service’s algorithms are functioning according to the established rules.

👥 The watchdog role belongs to the community. The ecosystem's development, open data editorials, as well as censorship, will be regulated by users. The conditions under which the participants are given the right to vote in decision-making will also be prescribed.

🤖 Web3 is based on AI and the semantic web. Search algorithms, machine learning, and user interaction will remain, but anonymity and privacy will not be affected.

🏠 Integration with the IoT (Internet of Things). The Internet of Things with its smart home ecosystem devices (smart speakers, vacuum cleaners, coffee makers, etc.) will be a part of Web3 while providing the owners' privacy.

DeFi at Web 3.0

DeFi, or decentralized finance, is the basis of Web 3.0, which made it possible to build a new internet concept. DeFi is a technology that enables independent financial management without the involvement of third parties. It is based on blockchain and supports decentralized digital asset management.

It is known that Bitcoin has ancestors – the internal payment systems' digital currencies of some projects. The innovation of the cryptocurrency and bitcoin in particular was an opportunity to provide automatic transitions carried out by specified algorithms and an open-source approach that enables each user to see the inside of the technology.

With the introduction of Ethereum's smart contracts (a digital analogue of contracts that can automatically fulfill the conditions of the parties), the world of digital assets has expanded significantly. Now it is possible to use blockchain not only as a payment system but also for prescribing the transaction’s conditions, which has made the system more flexible.

The main DeFi benefits include:

🔅 The coin’s supply is carried by the community, not the state. Coin’s supply is controlled through mining, farming, and staking.

Mining is creation of new blocks to ensure the functioning of cryptocurrency platforms, for which a reward is provided in the form of new coins.
Farming is blocking of tokens for the DeFi projects’ needs, mainly to ensure liquidity, in order to earn money.
Staking is a passive income, which means receiving new coins for storing a certain number of tokens.

🔅 The creators of decentralized platforms do not have access to the main part of the funds in the accounts.

🔅 Such platforms do not store user data, which ensures confidentiality.

🔅 Open source allows every coin holder to explore the algorithms that the decentralized platform is running on.

🔅 All operations and transactions are performed through smart contracts and can be completely anonymous.

The new global Web 3.0 network will be an arena where DeFi technologies' best way of application may be found. Just imagine the future online shopping for a new device or ordering an evening food delivery. You can be sure that registration, delivery, and money transfer will not require any middlemen. The entire list of operations will be run by smart contracts and decentralized services in automatic, truly anonymous mode.

Metaverse: a cyberspace inside Web 3.0

Despite the fact that these are quite different concepts, the Metaverse and Web 3.0 are often tied to each other. The Metaverse is a digital virtual space that mirrors, augments, and interacts with reality. The rapidly developing online gaming world is just the beginning of this concept. The developers suggest that the Metaverse may turn into a workspace, marketplaces, and even shopping malls with recreation areas and virtual travel. At the same time, just as in the real world, people will be able to purchase goods and services through DeFi tools.

One of the Metaverse visions, according to Facebook CEO Mark Zuckerberg.

Full Web 3.0 integration is a separate stage of the idea’s implementation. People already spend most of their free time online. In the near future, we will already get an immediate connection to the Metaverse right after we enter.

The main question is how the Metaverse will identify individual users. This is where NFT technology comes into play. Indivisible non-fungible tokens, i.e. tokens whose value is not equal to another (unlike bitcoin, which can be exchanged for another in exactly the same 1:1 ratio). NFTs made it possible to fix the code of one or another digital object in the open-code blockchain network. In the Metaverse, they will become a kind of document that registers any digital object and confirms the right of ownership. It is assumed that NFTs will be actively used as avatars and will become analogues of property in the real world.

One of the main supporters of the Metaverse idea is Facebook founder Mark Zuckerberg. Back in the fall of 2021, the company changed its corporate name to Meta, which, according to its representatives, better reflects the full range of activities carried out. Later, on October 11, 2022, the company also introduced its own VR-headset, the Meta Quest Pro.

Web 3.0 technologies will provide openness and equal user rights in the Metaverse. The 3D platforms, which will transform two-dimensional Internet design into three-dimensional, are one stage of Web 3.0 implementation. DeFi technologies will prevent monopolization, simultaneously provide users with guarantees of anonymity and security in the virtual space. So the Metaverse will become less and less dependent on people as intermediaries, and the work of the entire Internet will be provided by its own independent algorithms, free of external interference.

Web 3.0 implementing pioneers

When we talk about Web 3.0, we do not mean the technology of the distant future. Some online services have already implemented it. The concept attracts large global companies’ attention, such as the American bank JPMorgan Chase, mobile game developer Animoca Brands, and the NBA football league. Let's take a look at several projects whose platforms already support Web 3.0.

📱 Messengers

One of Web 3.0's primary goals is to ensure privacy in instant messengers and social networks. There already are projects that are successfully functioning and quickly attracting an audience using Web3 tools. One of them is ySign, a successful startup building its own decentralized communication app. Another project is the Secretum messenger, built on the Solana blockchain platform. It is based on an independent, distributed network that stores user data in encrypted form. Another feature is free access without registration. All you need to become a user is the Solana app and wallet. IAlso the developers have added an over-the-counter function to sell and buy cryptocurrency and NFT directly in the messenger.

Status is an open-source, secure messenger that uses end-to-end encryption and a distributed network to protect personal data. Its versatility sets it apart from competitors. One application includes a secure online chat, an anonymous Web 3.0 browser, and a crypto wallet for exchanging Ethereum standard tokens. The internal Status Token (SNT) allows you to transfer money to friends. Registration does not require confidential data, an email address, or even a phone number. The developers also offer Keycard, a credit card-shaped cold wallet to store passwords and keys. The application is already available on the App Store and Google Play.

 

💰 Finance

Ideas for the future of Web 3.0 are already capturing the attention of financial institutions. Thus, IBM Hyperledger Fabric offers the development of decentralized applications to businesses and banks. The Web 3.0 industry is also tied to the insurance industry: Safe Share, for instance, offers customers insurance products based on blockchain algorithms. Another well-known example is the Uniswap DEX, which is far from centralized management. All operations are carried out using Ethereum smart contracts. The exchange does not require registration or the provision of confidential data. Users do not store cryptocurrency inside such platforms; thus, there are no internal accounts, and the token swap is carried out by connecting digital wallets to the network.

Cashaa is an India-based neobank with its own digital ecosystem. The digital bank is focused on the full-scale implementation of Web 3.0, and the new project’s services are being developed with decentralization and anonymity standards. The project also has its own CAS token that supports the internal ecosystem. Cashaa positions itself as a bank that provides banking services to cryptocurrency holders. Platform users can open a savings account, take out a loan secured by digital assets, or invest in cryptocurrencies.

 

🌐 Web-browsers

Browsers are a safe Internet user’s backbone. Depending on the chosen policy, developers can either adapt software for profit or focus on protecting user privacy. One of the most famous examples is Opera. The developers released Crypto Browser for Web3 with a crypto wallet, tools for interacting with NFTs, and protection against cryptojacking in April 2022.

Opera also has its own protection system for Web3 service users called Web3 Guard. The tool helps to identify the risks of interacting with decentralized applications, as well as protects against phishing and other attacks.

Brave is an open-source web browser based on Chromium. The main advantages are built-in earning tools, ad blocking, and an online tracker for collecting data about user behavior.

As compensation for hiding ads, the developers offered an option to encourage site owners. Users can thank every content creator by sending them a certain amount of tokens from their crypto wallet. There are also VPN services that by default allow you to access any site through a private window.

Point is a Web3-browser. The product is part of the Point Network project ecosystem, whose team is building an infrastructure for diving into the third generation of the Internet. According to the developers, the browser gives users access to the real world of Web3.

 

📚 Digital content libraries

Digital content platforms are first in line to be introduced with the spread of Web 3.0. PeerTube, an open-source video hosting service, stands out among existing projects. It offers the ability to view, distribute, and download videos. Automation is carried out using WebTorrent technology; each user watching a video automatically distributes it to others and becomes a member of a distributed computer network. Another example is the Minds social network with its MINDS token, which is focused on the exchange of digital content and its monetization.

LBRY is a fully decentralized content library. Its users can not only read books but also share digital items, play games, listen to music, and watch videos. Its monetization system supports the native cryptocurrency LBRY Credits (LBC). The platform provides an opportunity to explore its open source code, and its decentralized structure ensures anonymity and privacy.

Another digital content library example is Bastyon. The developers call it a "blockchain publishing platform" aimed at combating censorship. Bastyon welcomes complete freedom of speech and allows different genres of content creators to monetize their talent using a native token, PKOIN.

Bastyon combines elements of Youtube, Twitter and Torrent and is a video hosting platform that, unlike conventional social networks, guarantees the absence of censorship and complete confidentiality of data. The blockchain technology on which the platform is based provides Bastyon users with uninterrupted access to content.

Web 3.0 problems

In addition to the benefits, the Web 3.0 may lead to a number of questions that need to be clarified. One of them is how the new Internet that combats monopolization will be regulated. The answer is through collective decisions made by development teams. But besides this, there are other ambiguous aspects of the new Internet.

🚨 Cybercrime. Because of automated technologies, hacker attacks are the primary threat. For example, only during the first quarter of 2022, hackers managed to steal about $1.3 billion. The most popular token ecosystems, such as Ethereum, Binance Smart Chain, and Solana, are being attacked. Existing crypto projects' vulnerabilities uncover concerns about the Web 3.0 future, which will be overwhelmingly based on smart contracts and blockchain technologies.

🔀  Wrong transactions. Crypto users complain about the inability to cancel erroneous transactions. In the Web 3.0 space, this may become commonplace because all related payment transactions will be conducted by software algorithms. Resetting passwords and adding new keys to replace lost ones are additional issues, as is network signature registration, which relies on identity verification.

🤐 Censorship. Who exactly will regulate downloaded content and its removal? Such a conflict occurred with LBRY after its users found out that some extremist materials were spread across its Odysee video platform. The platform's developers and founders had to make a choice: true freedom of expression or legal rights protection? The censorship would mean the collapse of the project’s ideology, so the developers decided to stay away from it.

The conflict put LBRY in the center of the watchdog’s attention. In November 2022, the SEC recognized the platform’s token as a security. Against the background of regulatory pressure, representatives of LBRY announced the impending death of the project. At the same time, the developers noted that they will continue to support the platform’s mission.

To summarize

Despite all the questions the next Internet generation is surrounded by, the Web 3.0 concept is attracting more and more minds and is becoming the subject of study by the largest companies. It is important to remind ourselves that the creation of decentralized platforms always attracts not just individual developers or even companies, but entire communities of stakeholders. This allows the creation of thoughtful and flexible online services that can be modified to ensure the user’s comfort, security, and anonymity on the network. A popular example is the competition between Wikipedia and the Microsoft Encarta web encyclopedia project in the 2000s. Decentralization and the help of volunteers allowed Wikipedia to easily win this competition, and therefore, on October 31, 2009, Microsoft Encarta was closed.

An American investor, one of the consultants of Twitter and Uber, Timothy Ferriss, said about Web 3.0: "It’s like the anthem before the game has even started. And I have never seen so many highly intelligent, ambitious, capable people drop whatever they’re doing, in many cases really attractive things, to dedicate all of their time to this".

This article is not an investment recommendation. The financial and other transactions mentioned in the article are not a guide to action. Itez is not responsible for possible risks. The user should independently conduct an analysis on the basis of which it will be possible to draw conclusions and make decisions about conducting any operations with cryptocurrency and / or tokens.

Maria Kachura
Maria Kachura

Visit her on Facebook or hit her up via Email.

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