Web3 Introduction

Introduction to Web3.

September 25, 2021 - By John Foster

What is Web3

The term Web3 is commonly attributed to Ethereum co-founder Gavin Wood, who argues that centralisation is not sustainable in the long run. Also referred to as Web 3 and Web 3.0, Web3 eliminates the need for centralised authorities and Web 2.0 "gatekeepers", such as major search engines and social media.

What makes Web3 different

Web3 facilitates peer-to-peer relationships without a central or intermediate platform. This makes it private and secure by design.

The idea behind the web was to make content accessible to anyone, the idea of Web 2.0 was to enable the users to be the authors of the content. Web3 gives users ownership and control of their content, and all their other data too.

Web3 uses decentralisation, cryptography and distributed ledger technology to enable new businesses and social models. Users own their data, identity and content, they can even participate as “shareholders” by owning protocol tokens or cryptocurrencies. This ultimately serves to remove “gatekeepers”, such as large technology companies and governments.

Tokens and cryptocurrencies are used to support Web3's business model and economy. Entirely new business opportunities are being found in the monetization of non-fungible tokens (NFT) and their application to VR, AR and the metaverse.

The terms "metaverse" and "Web3" are often confused, they have a connection but they're actually different. The metaverse represents a changing vision of the digital world, one in which we spend our time working, collaborating, and engaging in progressively more immersive programs. Web3 represents the decentralised technology that makes new digital communities and economies like the metaverse possible.

Application of Web3

Currently, Web3 applications are limited in all industries, but new applications are on the rise. Web3 provides the ownership, accounting and security to Distributed Autonomous Organisations (DAO), Decentralised Finance (DeFi), Non-Fungible Tokens (NFT) and play-to-earn games.

• DeFi systems like Aave and MakerDAO offer users loans and mortgages backed by cryptocurrency and smart contracts. They're often seen as high risk, but the digital economy is maturing with time.
• There's also a lot more to those monkey pictures, NFTs open up a world of new opportunities. Provable digital ownership means things like keys and tickets can be bought, sold, and traded securely between users without a third party.

Examples of Web3 in the wild may currently be thin, but its benefits are impossible to ignore. Global organisations will eventually seek to implement applications and systems that benefit from reduced computational trust and the new opportunities that only Web3 promises.