A potential future iteration of the internet known as Web 3.0 is built on public blockchains, a database best known for facilitating cryptocurrency exchanges. Web 3.0 is appealing because it is decentralized, which means that instead of customers using services that are mediated by businesses like Google, Apple, or Facebook, users themselves own and control portions of the internet. Web 3.0 does not require “permission” or “trust,” which means that central authorities cannot control who has access to what services. It also does not require an intermediary for virtual transactions to take place between two or more parties. Web 3.0 technically preserves user privacy better because these organizations and intermediaries are conducting the majority of the data collection.
Decentralized finance, also referred to as Defi, is a Web 3.0 feature that is gaining popularity. Real-world financial transactions must be carried out on the blockchain without the assistance of banks or the government. In the meantime, a lot of large companies and venture capital firms are investing heavily in Web 3.0, and it is difficult to imagine that their involvement won’t lead to some kind of centralized power.
In this article, we’ll discuss how the web has changed through time, why Web 3.0 is a hot topic, what it’s used for, what Web 3.0 in crypto means, where it’s going next, and why it matters.
What is Web 3.0 and how does it work?
The Web 3.0 era, sometimes referred to as the Semantic Web or read-write-execute, begins in 2010 and signals the future of the internet. By enabling computers to examine data similarly to humans, artificial intelligence (AI) and machine learning (ML) enables the intelligent creation and dissemination of valuable information tailored to the individual needs of a user.
Decentralization is at the core of both Web 2.0 and Web 3.0, albeit there are a few fundamental differences between the two. Developers of Web 3.0 applications hardly ever produce and distribute ones that use a single server or a single database to hold data (usually hosted on and managed by a single cloud provider).
Web 3.0 applications, on the other hand, are constructed on blockchains, decentralized networks of several peer-to-peer nodes (servers), or a combination of the two. These applications are referred to as decentralized apps (DApps), and the Web 3.0 community uses that name frequently. To create a reliable and secure decentralized network, network users (developers) are paid for providing the best services.
What is Web 3.0 in crypto?
You’ll see that cryptocurrency is regularly brought up when discussing Web 3.0. This is because many Web 3.0 protocols have a strong reliance on cryptocurrencies. Instead, it provides a financial incentive (tokens) to anyone who wants to assist in the development, administration, contribution, or improvement of one of the projects. Digital assets known as “Web 3.0 tokens” are linked to the goal of building a decentralized Internet. These protocols may offer a range of services, including hosting, computing, bandwidth, storage, identity, and other internet services previously offered by cloud providers.
For instance, the Ethereum-based Livepeer protocol offers a market for producers of video infrastructure and streaming services. Similar to this, Helium uses blockchains and tokens to entice individuals and small companies to provide and validate wireless coverage as well as send device data across the network.
The protocol offers a variety of technical and non-technical alternatives for people to make a living. Similar to how they would pay a cloud provider like Amazon Web Services, users of the service often pay to use the protocol. The elimination of unnecessary and frequently wasteful intermediates is a common feature of decentralization.
Additionally, nonfungible tokens (NFTs), digital currencies, and other blockchain components will be crucial components of Web 3.0. For instance, Reddit is aiming to break into the Web 3.0 space by developing a system that uses cryptocurrency tokens to let users effectively manage portions of the online communities in which they engage. Users would use “community points,” which they would acquire by posting on a particular subreddit, according to the idea. The number of users that upvote or downvote a specific post determines how many points the user receives. (It’s just Reddit Karma on the blockchain.)
These points can be utilized as voting shares, giving users who have contributed significantly more influence over decisions that have a larger impact on the community. These points can’t just be taken away because they are kept on the blockchain, and they also follow you, giving their owners more control. Fair enough, this is simply one use of a Web 3.0 concept called Decentralized Autonomous Organizations (DAOs), which employs tokens to more fairly share ownership and decision-making power.
