Since the term was coined in 2006 by New York Times reporter John Markoff, Web3 is all the buzz in the fintech space. Simply put, Web3 is a decentralized web where the power lies with the users instead of with central authorities such as major search engines and social media platforms.
With blockchain technology, Web3 creates a space where users can read, write, and interact with content safely and securely without losing ownership of their personal data.
Web 3.0 vs. Web 2.0
Over the past two decades, the internet has evolved from a read-only platform to an interactive medium. Web3 takes it to the next level. Instead of data going to the tech giants and being sold to advertisers, individual users can choose what they want to do with their data and profit from it as well. This allows users to monetize and leverage their own data for a more personalized internet experience. Web3 will enable websites and applications to use data more meaningfully with machine learning and AI. That way, each web session is tailored to each individual.
Another main difference between Web3 and the current internet (Web 2.0) is security. Since there is no central point of failure like a single server, the system can function even if part of it has been compromised. The data is distributed across several nodes (servers) so it cannot fail and/or be compromised easily.
Freedom at last
This type of technology is beneficial for people because it puts them back in the driver's seat. The decentralization of the web lets users be in control of their data and grants them permissionless access to the web. Unlike Web 2.0, users cannot be censored or banned for not following the guidelines. Web3 truly empowers its users to use the web freely. With the freedom that Web3 provides, users can create an online world that works for them.
Tech and Web3
Since Web3 is based on blockchain technology, cryptocurrency will likely power the business model, creating peer-to-peer transactions with no intermediaries.
Some use cases for Web3 include DeFi protocols such as Aave and MakerDAO that use smart contracts to provide users with lending and borrowing services, effectively cutting out the intermediary in these types of transactions.
Web3 also provides opportunities for content creators to sell their work through NFT smart contracts and earn all the profit based on their own terms.
With Web3, entrepreneurs and philanthropists can use the token economy to create new, innovative funding methods. Artists can find new value and new homes for their work on the blockchain. Everyday users can access a freer and fairer permissionless web. Even now, in its early days, users are creating new, innovative uses for Web3.
Internet made for the people
People will engage with Web3 in a similar way that they currently engage with the internet. Users can still consume and contribute content, but they are more in control of their experience. Web3 is internet by the people, for the people, and it’s becoming realer every day.