What is Web 3.0? How is Web3 Different From Web2?

What is in Web3?

The latest buzzword ‘Web3’ is a new decentralized web that is the next iteration of the internet, it uses a collection of technologies centred on decentralized blockchains enabling new business and social models. In this version of the internet, the communities are rewarded for maintaining and developing the core infrastructure.

The unilateral control applied by the centralized platforms can be neutralized by the decentralized networks. Such networks choose to put power in the hands of the communities than the corporations, thus creating a world with less authority and more business execution.

This nascent ecosystem provides an extensive environment for the creators and communities to monetize. The business models and economics of Web3 are powered by tokens and cryptocurrencies which then support the new business opportunities.

How is Web3 different?

It gives the chance to conduct peer-to-peer interactions without any intermediary and any centralized platforms. Like Web1, it too has open-source internet protocols but is collectively owned through crypto-economics.

Unlike the idea of Web2 which was that the readers must be the writers too, Web3 enables anyone to have their own autonomous power and control.

In a nutshell,

Web1.0 is a read-only web,

Web2.0 is a read-write web, and

Web3.0 is a read-write-interact web

Scope and future

Web3.0 welcomes all to the future of the internet with the latest internet technology leveraging AI, Machine Learning, and Blockchain. This new internet version not only allows individuals to own their data but also compensates for their time spent on the web.

Sounds interesting right?

Web3.0 along with focussing on corporate transparency, data ownership, and privacy is also on its way to revolutionizing the creator economy. Its technologies including Machine Learning, AI, Blockchains, smart contracts, etc. will completely change the way in which the creatives are creating their content, claiming ownership, and getting paid for their work.

Web3.0 use cases

Some of the public applications of Web3.0 include NFTs, play-to-earn games, decentralized finance (DeFi), and community-organized decentralized autonomous organizations (DAOs).

Some examples are:

• Play-to-earn games: such games using NFTs gives away to the users to earn income. In this, the NFTs enable the players to own the unique assets that they purchase and once you own an NFT, you can sell it anywhere outside the platform where created which is not possible in regular games. Axie Infinity is an example of such a play-to-earn game.

• DeFi protocol: such protocols are developing technology for lending and borrowing cryptocurrencies without any centralized intermediary. Some are Aave, MakerDAO, UniSwap, PancakeSwap, SushiSwap, Compound, yEarn, etc. this enables the users to earn higher yields and returns but with more risk.

• Content Creators: the innovations of Web3.0 especially social tokens and NFTs aid the artists and creators to sell their creative pieces using NFT smart contacts which ensures that instead of the intermediaries it is they who are getting paid based on their contract terms. 

With the passage of time and with the advent of such a technology requirement that welcomes new business opportunities and models which only Web3.0 can deliver, the use cases will definitely expand in the coming tech-driven future.

Web3.0 Architecture

With no centralized databases and a centralized web server, Web3.0 uses a blockchain for a decentralized state machine, and the logic of the applications is defined in smart contracts which are written by the developers and located onto the decentralized state machine.

The above diagram depicts the working of a Web3.0 application.

There are mainly 4 elements that make up a Web3.0:

• Ethereum Blockchain: they are globally obtainable state machines that are maintained by peer-to-peer network nodes. Anyone can access it and write to it because it is not owned by any single entity rather, collectively by everyone. Though the users can write to it, they can never update it.

• Smart Contracts: such contracts run automatically when the pre-determined terms and conditions are met. With no intermediary involved, such contracts automate the execution of the agreement. They basically define the logic behind the state changes.

• Ethereum Virtual Machine (EVM): they basically execute the logic defined in the smart contracts. A platform for the users to create decentralized applications (DApps) on Ethereum.

• Front End: it defines the UI (User Interface) logic and also connects with the smart contracts to define the application logic.

Written By- Devangi Sharma