What is Web3?

What is Web3?

What is Web3?
Web3 is the concept of a decentralized internet built on blockchain technology. If Web 1.0 marked the birth of the internet and Web 2.0 witnessed the development of the internet towards a social platform-centered direction, then Web3 means moving towards a decentralized public internet centered on ownership. Essentially, Web3 re-empowers control and ownership to users. Ideally, it will create a more fair competitive environment for users and reduce external control from third parties. The term Web3 has become a short form for all elements constituting this ecosystem, including cryptocurrencies, blockchain technology, decentralized finance (abbreviated as "DeFi"), NFTs, metaverses, and decentralized applications (abbreviated as "dApps"). In 2014, Gavin Wood, the co-founder of the Ethereum blockchain and the Web3 Foundation, coined this term in a blog post. He wrote: "Web 3.0, or you can call it the 'post-Snowden era' network, is a re-conception of all the things we have been using on the internet, but the interaction patterns among all parties are completely different. We consider what is public, we publish it. We consider what is agreed upon, we record it on the consensus ledger. We consider private information to be kept confidential and never leaked." His article emphasized the four main components of the third wave of the internet he envisioned: "static content publishing, dynamic message passing, trustless transactions, and integrated user interfaces." Today, most of the content of Web3 is built on these principles.

What are Web 1.0 and Web 2.0?
In the late 1990s to the early 21st century, the Internet began to be widely popularized. At that time, information was mainly obtained through text. The Internet at that time, namely Web 1.0, was filled with personal blogs, enterprise websites and message boards, and relied on open protocols. Most of the time, it was static, which was just a fancy way of saying that the interactivity of websites in Web 1.0 was not strong. Many people called it a "read-only" network. Web 2.0 is the next stage of the Internet, with its main feature being the transition to the mobile Internet, led by social media platforms and large financial institutions. Currently, most Internet users are still using Web 2.0 platforms and institutions. If you want to know if you are using Web 2.0, you can ask yourself which applications you are using to communicate with your friends and family now, and how you have checked your checking account balance recently. Web 2.0 has enabled people to co-create content with the websites and applications they use (think: filling and customizing your social media profile). But even if you have customized your profile to make it feel like your own, the pictures, data and information you share on these platforms belong to the companies that own them, not you. Many people call Web 2.0 the "read-write" network. This reminds us of Web3. In the ideal vision of Web3, ownership is no longer in the hands of big companies. Instead, it is closely related to the people who use it. This is thanks to the decentralized nature of blockchain, which allows users to publicly, permanently and irreversibly record the creation and ownership of their items. Now, this is called the "read-write yourself" network.

What are the core principles of Web3?
Firstly, Web3 is decentralized. Web3 is no longer subject to those companies and other large entities that can freely obtain and utilize users' information. Instead, it allows users to own their own information and items and distribute them according to their own will. Remember when Gavin Wood said that "trustless transactions" was one of the most important aspects of the Internet's future? It was no coincidence. At that time, he was developing Web 1.0 and Web 2.0, and he saw that users had to trust third parties to interact online. So he envisioned a world that no longer needed trust. This is where blockchain technology comes into play. Essentially, a blockchain is a large digital public record. The most popular blockchains are distributed across many nodes (that is, people's computers), which is why they are called "decentralized". This is why you hear them referred to as "decentralized". Therefore, blockchains are not distributed on servers owned by centralized companies, but in peer-to-peer networks. This ensures the immutability of blockchains. Because blockchain records and preserves history and acts as a fair party, transactions conducted on it can achieve "trustless" because they do not require you to trust anyone to conduct transactions. Similarly, because transactions are conducted through computer networks, they are also "permissionless" because they do not require the permission of a third party. Web3 uses cryptocurrencies to provide users with an alternative to the traditional banking system. In fact, many people still use a combination of government currency and cryptocurrencies held by banks, but it still allows users to operate outside of traditional centralized systems.

How is Web3 currently being used?
Undoubtedly, we will continue to see the expansion and development of Web3 in the coming years, but currently, its main use cases are concentrated on financial transactions and ownership.

Non-fungible Token (NFT)
NFT (Non-fungible Token) is a unique digital commodity stored on a blockchain. NFT can represent almost anything and serves as a digital record of ownership. The forms of NFT include artworks, avatars, collectibles, domain names, tickets and memberships, games and game tools, virtual worlds, and the scope is constantly changing. Emerging use cases include authentication, intellectual property rights and storage solutions.

Decentralized Finance (DeFi)
Decentralized Finance (DeFi) is usually referred to as "DeFi", which refers to all financial services based on blockchain technology. DeFi enables transactions without trust, without permission, and with high speed.

Cryptocurrency
Cryptocurrency is a digital currency based on blockchain. This enables transactions to be verified through a computer network without the need for a centralized entity or institution.

Decentralized Autonomous Organization
DAO (Decentralized Autonomous Organization) is an organization without a single leader, but managed by the user group that constitutes the organization. Usually, users in a DAO create proposals and vote to implement changes. DAO has its own tokens, allowing users to prove their membership and vote. The uses of DAO are very extensive - from charitable donations to commercial networks and education.

Decentralized Applications
"dApps" is the abbreviation of "decentralized applications". Unlike Web 2.0 which uses applications owned by a single entity, dApps use blockchain technology. Although they themselves do not necessarily need to be decentralized, dApps can operate through a peer-to-peer network on the blockchain or through a traditional hierarchical structure. However, they are called dApps because they use decentralized protocols.

Metaverse
The virtual universe refers to virtual reality and augmented reality where users can interact with the digital space. The metaverse is not actually a place but a mode - it describes how users interact with the Internet rather than the location where the interaction takes place. In the metaverse, users can play games, customize their appearance, interact with other players and communicate. This is a new way for people to socialize using VR and AR. Although not all metaverses are based on or will be built on Web3 technology, metaverses built on Web3 technology allow users to own their own goods in the metaverse.

The Future of Web3
Web3 remains a relatively new concept and is bound to evolve throughout our lifetime. As the aforementioned elements are applied more widely and further integrated into our existing technologies, the term "Web3" might even become obsolete soon. The future of Web3 may bring about numerous innovations, such as improved digital storage (from centralized cloud providers to decentralized solutions), faster and more secure internet browsers, significant changes in the way we interact with financial systems, better online gaming and social experiences, new social networks that allow users to fully own their own data, and even new desktop and mobile operating systems.