What is Web3? Your ultimate guide

Some say Web3 is the future of the internet, but exactly what is it?

Web3                                 
Web3 could change everything, but will it? – Photo: Shutterstock
                                

Contents

Web3 is coming – the third iteration of the World Wide Web, the information system through and with which billions of people interact through the internet.  

But what is Web3? What will Web3 be used for? How does Web3 work? And how does it differ from Web1 and Web 2.0? Read on to find out…

Web1 and Web 2.0

The first iteration of the World Wide Web, as was popular until the mid-noughties, was primarily a passive affair for users. It was possible thanks to platforms such as Geocities and Angelfire to set up a website, but users did not have many ways to become creators.

Yes, there were chatrooms and message boards, but that was about it. In terms of design, too, pages from the Web1 era look rather different from those we see today. It was not uncommon for pages to have frames, with a fixed menu down the side or at the top, the main part being separate from that and scrollable.

Graphics were also considerably lower-definition than they are now, although much of that was to do with the technology of the time, with dial-up connections commonplace for users. In effect, Web1 was a collection of static online pages, which were mainly controlled by a site’s creators. 

It is hard to say when Web 2.0 started but, after the dot.com crash at the turn of the millennium, changes were taking place. As so much of what we now take for granted on the internet – easy ways to generate one’s own content, social connections and so on – only became popular at the start of the 21st century, it makes sense to suggest that Web 2.0 has been going in one form or another since around 2001.

While Web1 had some proto-social media sites, it was not until the rise of blogging in the early 2000s that publishing one’s own thoughts to a wide audience became possible for the average web user. Sites such as Blogspot and WordPress allowed people to air their thoughts and opinions, the likes of Flickr helped them upload their photos, and sites such as LiveJournal gave people the chance to combine the two, finding like-minded people and creating their own communities.

A little later on, MySpace enhanced the social element while cutting down the emphasis on blogging, while Facebook streamlined the MySpace experience and became a worldwide phenomenon. It seemed like users were now taking ownership of the internet.

Except they weren’t. Yes, people were able to utilise user-friendly sites to share information, pictures and updates. But the information was still being controlled, and many felt that that the likes of Facebook, Twitter and Google were, ultimately, getting too much power.

The argument was that because these internet giants had access to people’s data, they would be able to make use of it without users’ permission and in ways that users did not wish information about them to be used. A desire has therefore arisen, in some quarters, for a new kind of internet – one which protects users’ privacy.

The blockchain and its uses

This is where Web3 comes in, or at least might come in. Web3 is based on one particular technology: the public blockchain.

It is on blockchains that most cryptocurrencies are built. The idea behind a blockchain is that it is decentralised, meaning that because people collaborate in putting blocks of data onto a network,  then there is no single person, company or authority ultimately in charge.

Because the data is spread across different computers on the network, copies of files have to match up. If one file on one computer on the network does not match the same file on other users’ computers, then it is invalid. In other words, no one can change a file without everyone changing it, or without the permission of the person whose file it is, which then means that data is, at least in theory, protected.

The other useful thing about blockchains is that they are encrypted, which means that people do not have access to other users’ data unless those other users give them permission. This takes away the concerns about privacy that surround Web 2.0 and the Big Tech companies such as Facebook, or Meta, as it now calls itself.  Even if the data is on a computer that is not their own, users still have control over it.

Blockchain diagram
An artist's impression of a blockchain – Photo: Shutterstock

Open sources and DAOs

There are also a few other concepts relating to blockchains and Web3 that we need to look at.

Firstly, programs are open. This means that they are based on open-source software: computer programs which are accessible to all.

Secondly, these programs are trustless and permissionless. While this might sound a bit scary, it’s not. ‘Permissionless’ simply means that two different users can carry out a transaction without having to gain the permission of a central authority figure on the network.

Likewise, ‘trustless’ means that the same transaction can take place without having to use a third-party program to facilitate the deal. The process is controlled by the blockchain itself, meaning there is no need for someone else to help make things happen.

Decentralised autonomous organisations (DAOs) also look like they can prove to be a part of Web3. These are collectives of one kind or another (they could be groups of people, or companies) that are bound together with rules and regulations put on a blockchain. The rules cannot be altered unless permission is granted.

A DAO is also a de facto private group, which means that, for instance, the blockchain itself cannot interfere with it.  Because the rules of the DAO are set in the code on the blockchain, that means that there is no need for a traditional hierarchy, meaning there is a sense of equality.

DAOs, as a general principle, are not to be confused with The DAO, a protocol operating on the Ethereum blockchain which, unfortunately, was hacked in 2017, thus providing impetus for the hard fork that, ultimately, led to the creation of the ethereum classic cryptocurrency.

DAO
DAOs are part of Web3 – Photo: Shutterstock

NFTs and the future

There are many other possibilities that could come into play with Web3.

As blockchains interact with each other, there may be the need for artificial intelligence to get involved. Cryptocurrencies and NFTs are also likely to be a big part of Web3.

The metaverse, in all its different iterations, is likely to be part of Web3 as well. 

The blockchain without crypto?

The blockchain
Can the blockchain exist without crypto? – Photo: Shutterstock

One of the more interesting potential points to consider when discussing Web3 is what will happen concerning the link between blockchain technology and cryptocurrency.

At the moment, the two are synonymous. In fact, the majority of both blockchains and the programs operating on them have their own native coins, if they are blockchains, or tokens, if they are programs.

This sounds like it could potentially be a good thing, when we consider the aims of Web3. After all, if cryptocurrencies are decentralised, and if we believe decentralisation is a good thing, then cryptocurrencies are therefore good, right? The flipside is that there are some concerns about cryptos. They are highly volatile, there are environmental concerns over the amount of energy used to mine many cryptocurrency coins, and it can be hard to find an off-line usage for them.

So, taking those concerns onboard, what if there was a way to have a blockchain without crypto? After all, many cryptocurrencies’ main usage is as a method of rewarding people who operate the network. Can you have a blockchain without crypto?

One person who argues that such a thing is possible and desirable is Shaktikanta Das, who is the governor of the Reserve Bank of India and a crypto-sceptic. In November 2021 Das said: “Blockchain technology has been there for 10 years and can grow without cryptocurrencies”.

If Das is right, this could be a very interesting potential development. Blockchain technology is a key part of any future online decentralisation. That said, there is an argument that, as a blockchain gets larger, the people who operate individual computers, or nodes, on the network, will want to get paid for their efforts.

There is also the question of mining, or adding blocks of data, to the blockchain. The proof-of-work model should, theoretically, be able to exist without a need for cryptocurrency more than the proof-of-stake consensus mechanism.

On the other hand, one of the concerns about crypto and, by extent, blockchain technology, is the environmental cost of proof-of-work. Theoretically, a kind of proof-of-stake system could potentially support a cryptoless blockchain, but it would be much harder to operate without some kind of reward system.

Nevertheless, the potential of a “pure” blockchain could be something that, if it can and does happen, be a real boost for the move from Web2.0 to Web3.

Regardless, let’s not forget that, even if blockchain without crypto might seem like a dream, the likes of ICON and XRP show that crypto can exist without a blockchain. So perhaps, in time, the opposite may come true. Already, we have seen blockchain technology used to allow refugees and homeless people access to their identity documents, so it is entirely possible that this sort of usage could become commonplace and, therefore, blockchain’s reliance on cryptocurrency could fade away. 

This leads to a potential problem with Web3, which is that there is not an entirely precise definition of what it is. Again, much of the debate comes from the role that cryptocurrency has within the concept.

For instance, it can be argued that, in order for a blockchain to work in the way that it is supposed to, people will need to be compensated for their time and skills. This is a lot easier and a lot more convenient (not to mention being within the spirit of decentralisation) if it’s done with cryptocurrency.

There is also an argument to be made that a cryptoless version of the blockchain will either grind to a halt or, even worse, end up become insecure, making it redundant. If people cannot trust a new platform which prides itself on security and privacy to keep their data secure and private, then they will not adopt it and, as a result, Web3 would be dead in the water without some kind of crypto to move things along. This argument, at its core, sees Web3 as a development from cryptocurrency. 

On the other hand, there is no automatic need for the sort of things we have seen with cryptocurrency and NFTs to be included into how Web3 works. One could suggest that those two examples are merely things that demonstrate how Web3 does or will operate, rather than the entirety of what Web3 is all about.

For some, Web3 is purely and simply about decentralisation of data, and therefore the issue of cryptocurrency is a red herring and a  non-essential for the new internet. It will be interesting to see which philosophy wins out – if either of them does.

When will it happen?

When will Web3 come into play? The answer to that question can range from “Not for a long time” to “It’s already here”.

A great many ‘Web3’ elements are already commonplace in certain parts of the internet. However, they have not been universally adopted. Since there is no official finish date for Web1 (there are, after all, some sites still up from that era of the internet) and no official start date for Web 2.0, Web3 is likely to be well on us before we notice, especially as the term ‘Web3’ has no clear, universally agreed meaning or definition.

It is also possible that what is now seen as a paragon of decentralisation itself becomes centralised, as large companies step in and take over. The present status of Web3 remains unclear, as does its future. Even if that does not happen, there is always the possibility that what is now a small movement, for want of a better word, for decentralisation could still end up being hijacked by Big Web.

It seems certain that Big Web will not give up its power over our online lives without a fight.

FAQs

Since Web3 is a concept, it is impossible to say who created it. While Bitcoin’s Satoshi Nakamoto can take credit for popularising the blockchain, it would be wrong to say that Satoshi was responsible.

Likewise, the term Web 3.0 was first used in the sense that we now understand it by Gavin Wood, co-founder of Ethereum and flunder of Polkadot, in 201. But long before then, the term had been used to mean something else entirely in 2006 by Sir Tim Berners-Lee, the founder of the World Wide Web.

The truth is that, depending on how big it gets, lots of people will be able to claim credit for Web3, and they may all be telling some truth, or they might all be very much wrong.

It could either be the gateway to a new industrial revolution, or it could be a damp squib. Equally, it might tread a middle ground, much in the same way it does now: being a key part of certain sections of the internet, but by no means the whole online world.

Anyone who makes any statement with any certainty is either a fool or a liar. 

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