Complete Web3 Guide by web3 community expert – Ebook web3 free

web3 ebook free
web3

Table of Contents

Introduction to Web3

Centralization has helped onboard billions of people to the World Wide Web and created the stable, robust infrastructure on which it lives. At the same time, a handful of centralized entities have a stronghold on large swathes of the World Wide Web, unilaterally deciding what should and should not be allowed.

Web3 is the answer to this dilemma. Instead of a Web monopolized by large technology companies, Web3 embraces decentralization and is being built, operated, and owned by its users. Web3 puts power in the hands of individuals rather than corporations. Before we talk about Web3, let’s explore how we got here.

The early Web

Most people think of the Web as a continuous pillar of modern life—it was invented and has just existed since. However, the Web most of us know today is quite different from originally imagined. To understand this better, it’s helpful to break the Web’s short history into loose periods—Web 1.0 and Web 2.0.

Web 1.0: Read-Only (1990-2004)

In 1989, at CERN, Geneva, Tim Berners-Lee was busy developing the protocols that would become the World Wide Web. His idea? To create open, decentralized protocols that allowed information-sharing from anywhere on Earth.

The first inception of Berners-Lee’s creation, now known as ‘Web 1.0’, occurred roughly between 1990 to 2004. Web 1.0 was mainly static websites owned by companies, and there was close to zero interaction between users – individuals seldom produced content – leading to it being known as the read-only web.

Client-server architecture, representing Web 1.0

Web 2.0: Read-Write (2004-now)

The Web 2.0 period began in 2004 with the emergence of social media platforms. Instead of a read-only, the web evolved to be read-write. Instead of companies providing content to users, they also began to provide platforms to share user-generated content and engage in user-to-user interactions. As more people came online, a handful of top companies began to control a disproportionate amount of the traffic and value generated on the web. Web 2.0 also birthed the advertising-driven revenue model. While users could create content, they didn’t own it or benefit from its monetization.

Client-server architecture, representing Web 2.0

Web 3.0: Read-Write-Own

The premise of ‘Web 3.0’ was coined by Ethereum co-founder Gavin Wood shortly after Ethereum launched in 2014. Gavin put into words a solution for a problem that many early crypto adopters felt: the Web required too much trust. That is, most of the Web that people know and use today relies on trusting a handful of private companies to act in the public’s best interests.

Decentralized node architecture, representing Web3

What is Web3?

Web3 has become a catch-all term for the vision of a new, better internet. At its core, Web3 uses blockchains, cryptocurrencies, and NFTs to give power back to the users in the form of ownership. A 2020 post on Twitter said it best: Web1 was read-only, Web2 is read-write, Web3 will be read-write-own.

Core ideas of Web3

Although it’s challenging to provide a rigid definition of what Web3 is, a few core principles guide its creation.

  • Web3 is decentralized: instead of large swathes of the internet controlled and owned by centralized entities, ownership gets distributed amongst its builders and users.
  • Web3 is permissionless: everyone has equal access to participate in Web3, and no one gets excluded.
  • Web3 has native payments: it uses cryptocurrency for spending and sending money online instead of relying on the outdated infrastructure of banks and payment processors.
  • Web3 is trustless: it operates using incentives and economic mechanisms instead of relying on trusted third-parties.

Why is Web3 important?

Although Web3’s killer features aren’t isolated and don’t fit into neat categories, for simplicity we’ve tried to separate them to make them easier to understand.

Ownership

Web3 gives you ownership of your digital assets in an unprecedented way. For example, say you’re playing a web2 game. If you purchase an in-game item, it is tied directly to your account. If the game creators delete your account, you will lose these items. Or, if you stop playing the game, you lose the value you invested into your in-game items.

Web3 allows for direct ownership through non-fungible tokens (NFTs). No one, not even the game’s creators, has the power to take away your ownership. And, if you stop playing, you can sell or trade your in-game items on open markets and recoup their value.

👀

Learn more about NFTs

More on NFTs

Censorship resistance

The power dynamic between platforms and content creators is massively imbalanced.

OnlyFans is a user-generated adult content site with over 1-million content creators, many of which use the platform as their primary source of income. In August 2021, OnlyFans announced plans to ban sexually explicit content. The announcement sparked outrage amongst creators on the platform, who felt they were getting robbed of an income on a platform they helped create. After the backlash, the decision got quickly reversed. Despite the creators winning this battle, it highlights a problem for Web 2.0 creators: you lose the reputation and following you accrued if you leave a platform.

On Web3, your data lives on the blockchain. When you decide to leave a platform, you can take your reputation with you, plugging it into another interface that more clearly aligns with your values.

Web 2.0 requires content creators to trust platforms not to change the rules, but censorship resistance is a native feature of a Web3 platform.

Decentralized autonomous organizations (DAOs)

As well as owning your data in Web3, you can own the platform as a collective, using tokens that act like shares in a company. DAOs let you coordinate decentralized ownership of a platform and make decisions about its future.

DAOs are defined technically as agreed-upon smart contracts that automate decentralized decision-making over a pool of resources (tokens). Users with tokens vote on how resources get spent, and the code automatically performs the voting outcome.

However, people define many Web3 communities as DAOs. These communities all have different levels of decentralization and automation by code. Currently, we are exploring what DAOs are and how they might evolve in the future.

👀

Learn more about DAOs

More on DAOs

Identity

Traditionally, you would create an account for every platform you use. For example, you might have a Twitter account, a YouTube account, and a Reddit account. Want to change your display name or profile picture? You have to do it across every account. You can use social sign-ins in some cases, but this presents a familiar problem—censorship. In a single click, these platforms can lock you out of your entire online life. Even worse, many platforms require you to trust them with personally identifiable information to create an account.

Web3 solves these problems by allowing you to control your digital identity with an Ethereum address and ENS profile. Using an Ethereum address provides a single login across platforms that is secure, censorship-resistant, and anonymous.Sign-in with Ethereum

Native payments

Web2’s payment infrastructure relies on banks and payment processors, excluding people without bank accounts or those who happen to live within the borders of the wrong country. Web3 uses tokens like ETH to send money directly in the browser and requires no trusted third party.More on ETH

Web3 limitations

Despite the numerous benefits of Web3 in its current form, there are still many limitations that the ecosystem must address for it to flourish.

Accessibility

Important Web3 features, like Sign-in with Ethereum, are already available for anyone to use at zero cost. But, the relative cost of transactions is still prohibitive to many. Web3 is less likely to be utilized in less-wealthy, developing nations due to high transaction fees. On Ethereum, these challenges are being solved through network upgrades and layer 2 scaling solutions. The technology is ready, but we need higher levels of adoption on layer 2 to make Web3 accessible to everyone.

User experience

The technical barrier to entry to using Web3 is currently too high. Users must comprehend security concerns, understand complex technical documentation, and navigate unintuitive user interfaces. Wallet providers, in particular, are working to solve this, but more progress is needed before Web3 gets adopted en masse.

Education

Web3 introduces new paradigms that require learning different mental models than the ones used in Web2.0. A similar education drive happened as Web1.0 was gaining popularity in the late 1990s; proponents of the world wide web used a slew of educational techniques to educate the public from simple metaphors (the information highway, browsers, surfing the web) to television broadcasts. Web3 isn’t difficult, but it is different. Educational initiatives informing Web2 users of these Web3 paradigms are vital for its success.

Ethereum.org contributes to Web3 education through our Translation Program, aiming to translate important Ethereum content to as many languages as possible.

Centralized infrastructure

The Web3 ecosystem is young and quickly evolving. As a result, it currently depends mainly on centralized infrastructure (GitHub, Twitter, Discord, etc.). Many Web3 companies are rushing to fill these gaps, but building high-quality, reliable infrastructure takes time.

A decentralized future

Web3 is a young and evolving ecosystem. Gavin Wood coined the term in 2014, but many of these ideas have only recently become a reality. In the last year alone, there has been a considerable surge in the interest in cryptocurrency, improvements to layer 2 scaling solutions, massive experiments with new forms of governance, and revolutions in digital identity.

We are only at the beginning of creating a better Web with Web3, but as we continue to improve the infrastructure that will support it, the future of the Web looks bright.

How can I get involved

What is Web3? The Decentralized Internet of the Future Explained

Nader DabitNader Dabit

What is Web3? The Decentralized Internet of the Future Explained

If you’re reading this then you are a participant in the modern web. The web we are experiencing today is much different than what it was just 10 years ago. How has the web evolved, and more importantly – where is it going next? Also, why do any of these things matter?

If history has taught us anything, these changes will matter a lot.

In this article, I will lay out how the web has evolved, where’s it going next, and why this matters.

Think about how the internet affects your life on a daily basis. Consider how society has changed as a result of the internet. Social media platforms. Mobile apps. And now the internet is going through another paradigm shift as we speak.

The Evolution of the Web

The web has evolved a lot over the years, and the applications of it today are almost unrecognizable from its most early days. The evolution of the web is often partitioned into three separate stages: Web 1.0, Web 2.0, and Web 3.0.

What is Web 1.0?

Web 1.0 was the first iteration of the web. Most participants were consumers of content, and the creators were typically developers who build websites that contained information served up mainly in text or image format. Web 1.0 lasted approximately from 1991 to 2004.

Web 1.0 consisted of sites serving static content instead of dynamic HTML. Data and content were served from a static file system rather than a database, and sites didn’t have much interactivity at all.

You can think of Web 1.0 as the read-only web.

What is Web 2.0?

Most of us have primarily experienced the web in its current form, commonly referred to as web2. You can think of web2 as the interactive and social web.

In the web2 world, you don’t have to be a developer to participate in the creation process. Many apps are built in a way that easily allows anyone to be a creator.

If you want to craft a thought and share it with the world, you can. If you want to upload a video and allow millions of people to see it, interact with it, and comment on it, you can do that too.

Web2 is simple, really, and because of its simplicity more and more people around the world are becoming creators.

The web in its current form is really great in many ways, but there are some areas where we can do a lot better.

Web 2.0 Monetization and Security

In the web2 world, many popular apps are following a common pattern in their life cycles. Think of some of the apps that you use on a daily basis, and how the following examples might apply to them.

Monetization of Apps

Imagine the early days of popular applications like Instagram, Twitter, LinkedIn, or YouTube and how different they are today. The process usually goes something like this:

  1. Company launches an app
  2. It onboards as many users as possible
  3. Then it monetizes its user base

When a developer or company launches a popular app, the user experience is often very slick as the app continues rising in popularity. This is the reason they are able to gain traction quickly in the first place.

At first, many software companies do not worry about monetization. They strictly focus on growth and on locking in new users – but eventually they have to start turning a profit.

They also need to consider the role of outside investors. Often the constraints of taking on things like venture capital negatively affect the life cycle, and eventually the user experience, of many applications that we use today.

If a company building an application takes in venture capital, its investors often expect a return on investment in the order of magnitude of tens or hundreds of what they paid in.

This means that, instead of going for some sustainable model of growth that they can sustain in a somewhat organic manner, the company is often pushed towards two paths: advertisements or selling personal data.

For many web2 companies like Google, Facebook, Twitter, and others, more data leads to more personalized ads. This leads to more clicks and ultimately more ad revenue. The exploitation and centralization of user data is core to how the web as we know and use it today is engineered to function.

Security and privacy

Web2 applications repeatedly experience data breaches. There are even websites dedicated to keeping up with these breaches and telling you when your data has been compromised.

In web2, you don’t have any control over your data or how it is stored. In fact, companies often track and save user data without their users’ consent. All of this data is then owned and controlled by the companies in charge of these platforms.

Users who live in countries where they have to worry about the negative consequences of free speech are also at risk.

Governments will often shut down servers or seize bank accounts if they believe a person is voicing an opinion that goes against their propaganda. With centralized servers, it is easy for governments to intervene, control, or shut down applications as they see fit.

Because banks are also digital and under centralized control, governments often intervene there as well. They can shut down access to bank accounts or limit access to funds during times of volatility, extreme inflation, or other political unrest.

Web3 aims to solve many of these shortcomings by fundamentally rethinking how we architect and interact with applications from the ground up.

What is Web 3.0?

There are a few fundamental differences between web2 and web3, but decentralization is at its core.

Web3 enhances the internet as we know it today with a few other added characteristics. web3 is:

  • Verifiable
  • Trustless
  • Self-governing
  • Permissionless
  • Distributed and robust
  • Stateful
  • Native built-in payments

In web3, developers don’t usually build and deploy applications that run on a single server or that store their data in a single database (usually hosted on and managed by a single cloud provider).

Instead, web3 applications either run on blockchains, decentralized networks of many peer to peer nodes (servers), or a combination of the two that forms a cryptoeconomic protocol. These apps are often referred to as dapps (decentralized apps), and you will see that term used often in the web3 space.

To achieve a stable and secure decentralized network, network participants (developers) are incentivized and compete to provide the highest quality services to anyone using the service.

When you hear about web3, you’ll notice that cryptocurrency is often part of the conversation. This is because cryptocurrency plays a big role in many of these protocols. It provides a financial incentive (tokens) for anyone who wants to participate in creating, governing, contributing to, or improving one of the projects themselves.

These protocols may often offer a variety of different services like compute, storage, bandwidth, identity, hosting, and other web services commonly provided by cloud providers in the past.

People can make a living by participating in the protocol in various ways, in both technical and non-technical levels.

Consumers of the service usually pay to use the protocol, similarly to how they would pay a cloud provider like AWS today. Except in web3, the money goes directly to the network participants.

In this, like in many forms of decentralization, you’ll see that unnecessary and often inefficient intermediaries are cut out.

Many web infrastructure protocols like FilecoinLivepeerArweave, and The Graph (which is what I work with at Edge & Node) have issued utility tokens that govern how the protocol functions. These tokens also reward participants at many levels of the network. Even native blockchain protocols like Ethereum operate in this manner.

Native payments

Tokens also introduce a native payment layer that is completely borderless and frictionless. Companies like Stripe and Paypal have created billions of dollars of value in enabling electronic payments.

These systems are overly complex and still do not enable true international interoperability between participants. They also require you to hand over your sensitive information and personal data in order to use them.

Crypto wallets like MetaMask and Torus enable you to integrate easy, anonymous, and secure international payments and transactions into web3 applications.

Networks like Solana offer several hundred digit millisecond latency and transaction costs of a small fraction of a penny. Unlike the current financial system, users do not have to go through the traditional numerous, friction-filled steps to interact with and participate in the network. All they need to do is download or install a wallet, and they can start sending and receiving payments without any gatekeeping.

A new way of building companies

Tokens also brings about the idea of tokenization and the realization of a token economy.

Take, for example, the current state of building a software company. Someone comes up with an idea, but in order to start building they need money in order to support themselves.

To get the money, they take on venture capital and give away a percentage of the company. This investment immediately introduces mis-aligned incentives that will, in the long run, not align well with building out the best user experience.

Also, if the company ever does become successful, it will take a very long time for anyone involved to realize any of the value, often leading to years of work without any real return on investment.

Imagine, instead, that a new and exciting project is announced that solves a real problem. Anyone can participate in building it or investing in it from day one. The company announces the release of x number of tokens, and give 10% to the early builders, put 10% for sale to the public, and set the rest aside for future payment of contributors and funding of the project.

Stakeholders can use their tokens to vote on changes to the future of the project, and the people who helped build the project can sell some of their holdings to make money after the tokens have been released.

People who believe in the project can buy and hold ownership, and people who think the project is headed in the wrong direction can signal this by selling their stake.

Because blockchain data is all completely public and open, purchasers have complete transparency over what is happening. This is in contrast to buying equity in private or centralized businesses where many things are often cloaked in secrecy.

This is already happening in the web3 space.

One example is the app Radicle (a decentralized GitHub alternative) which allows stakeholders to participate in the governance of their project. Gitcoin is another that allows developers to get paid in cryptocurrency for jumping in and working on Open Source issues. Yearn allows stakeholders to participate in decision making and voting on proposals. UniswapSuperRareThe GraphAudius, and countless other protocols and projects have issued tokens as a way to enable ownership, participation, and governance.

DAOs (Decentralized Autonomous Organizations), which offer an alternative way to build what we traditionally thought of as a company, are gaining tremendous momentum and investment from both traditional developers and venture capital firms.

These types of organizations are tokenized and turn the idea of organizational structure on its head, offering real, liquid, and equitable ownership to larger portions of stakeholders and aligning incentives in new and interesting ways.

For example, Friends with Benefits is a DAO of web3 builders and artists, is about a year old, has a market cap of around $125 million as of this writing, and recently received a $10 million round of investment from a16z.

DAOs could encompass an entire post in and of themselves, but for now I’ll just say that I think that they are the future of building products and (what we in the past thought of as) companies. Here is a good post outlining the current DAO landscape.

How Identity Works in Web3

In web3, Identity also works much differently than what we are used to today. Most of the time in web3 apps, identities will be tied to the wallet address of the user interacting with the application.

Unlike web2 authentication methods like OAuth or email + password (that almost always require users to hand over sensitive and personal information), wallet addresses are completely anonymous unless the user decides to tie their own identity to it publicly.

If the user chooses to use the same wallet across multiple dapps, their identity is also seamlessly transferable across apps, which lets them build up their reputation over time.

Protocols and tools like Ceramic and IDX already allow developers to build self-sovereign identity into their applications to replace traditional authentication and identity layers. The Ethereum foundation also has a working RFP for defining a specification for “Sign in with Ethereum” which would help provide a more streamlined and documented way to do this going forward. This is also a good thread that outlines some of the ways that this would enhance traditional authentication flows.

How to Build on Web3

I’m a developer who recently transitioned into the web3 space from a traditional development background. So I wanted to start building to get a sense of what the development experience felt like. And I wanted to get an understanding of the types of apps that we can build today.

I dove right in and decided to document some of the things I was doing in a couple of blog posts.

How to Get Into Ethereum, Crypto, and Web3 as a Developer – This is an introduction to the space in general, coming from a developer, for developers looking to break into the industry.

The Complete Guide to Full Stack Ethereum Development – This is a tutorial that teaches you how to build out your first dapp.

The Complete Guide to Full Stack Solana Development with React, Anchor, Rust, and Phantom – This guide dives into Solana to show you how to build a full stack dapp.

If you are interested in learning more about web3 in general, you can check out these posts:

The New Creator Economy – DAOs, Community Ownership, and Cryptoeconomics

The Value Chain of the Open Metaverse

The Rise of Micro-Economies

Web3 beyond the hype

September 26, 2022 | Article

By Anutosh BanerjeeRobert Byrne, Ian De Bode, and Matt Higginson

Web3 beyond the hype

While buffeted by the recent market downturn and bankruptcies, digital assets and the technologies underlying them still have the potential to transform business models across sectors.

https://w.soundcloud.com/player/?url=https%3A//api.soundcloud.com/tracks/1353105526&color=%2307254d&inverse=false&auto_play=false&show_user=true

DOWNLOADS

 Article (11 pages)

The past few months have been a rough awakening for many Web3 enthusiasts: the market prices of major cryptocurrencies have declined significantly, the trading volume of non-fungible tokens (NFTs) has slowed, and, most importantly, some pioneers of the space have declared bankruptcy because of failed risk management and misuse of consumer funds. Yet even as the debris continues to fly, business leaders shouldn’t confuse market fluctuations or bad actors with the potential uses of digital assets and the technologies that underlie them.

While there are very real risks from this nascent technology and its uses, applications for the next generation of the internet continue to spring up in a growing number of industries with potentially transformative effects.

The financial-services industry has largely led the way in adopting some of these nascent digital technologies and assets—at its peak, the daily volume of transactions processed on so-called decentralized-finance exchanges exceeded $10 billion.1 Volume has since dropped to about $2 billion, largely in line with asset prices. Learnings from the financial-services experience—both the ups and the downs—are helping to inform usage in other sectors, which now include real estate, gaming, carbon markets, and art, among others.

How far and how fast these technologies and their uses will spread remains to be seen; the journey is proving bumpy, with ongoing challenges ranging from poor user experience to fraud. Crucially, the regulatory picture for Web3 remains unsettled, with calls for greater clarity on some assets and more consumer protection for funds held in custody. Yet understanding the core features of this new digital wave and the potential disruption it could bring remains important for business leaders in a wide range of sectors. To that end, this article is a primer on the fundamentals of Web3: what it is, the pillars on which it is built, what it can and cannot yet do, the significant risks and challenges it needs to overcome, and the implications for stakeholders as it continues to evolve. Future articles will look at more specific aspects and use cases in greater depth.

MOST POPULAR INSIGHTS

  1. Women in the Workplace 2022
  2. How does Gen Z see its place in the working world? With trepidation
  3. The overlooked contributions and hidden challenges of Asian Americans
  4. A defining moment: How Europe’s CEOs can build resilience to grow in today’s economic maelstrom
  5. Digital twins: The foundation of the enterprise metaverse

Understanding the disruptive potential of Web3

The core distinctive feature of Web3 is the decentralization of business models. To that extent, it marks a third phase of the internet (hence “Web3”) and a reversal of the current status quo for users. While the first incarnation of the web in the 1980s consisted of open protocols on which anyone could build—and from which user data was barely captured—it soon morphed into the second iteration: a more centralized model in which user data, such as identity, transaction history, and credit scores, are captured, aggregated, and often resold. Applications are developed, delivered, and monetized in a proprietary way; all decisions related to their functionality and governance are concentrated in a few hands, and revenues are distributed to management and shareholders.

Web3, the next iteration, potentially upends that power structure with a shift back to users. Open standards and protocols could make their return. The intent is that control is no longer centralized in large platforms and aggregators, but rather is widely distributed through “permissionless” decentralized blockchains and smart contracts, which we explain later in this article. Governance—and this is one of the trickiest aspects of Web3—is meant to take place in the community rather than behind closed doors. Revenues can be given back to creators and users with some incentives to finance user acquisition and growth.

What does this mean in practice? Essentially, it could mark a paradigm shift in the business model for digital applications by making disintermediation a core element. Intermediaries may no longer be required with respect to data, functionality, and value. Users and creators could gain the upper hand and, through open-source rather than proprietary applications, would have incentives to innovate, test, build, and scale.

The building blocks of Web3

The disruptive premise of Web3 is built on three fundamentals: the blockchain that stores all data on asset ownership and the history of conducted transactions; “smart” contracts that represent application logic and can execute specific tasks independently; and digital assets that can represent anything of value and engage with smart contracts to become “programmable.” Each of these three fundamentals has layers of complexity and nuance, and each is evolving in an effort to overcome startup troubles and structural weaknesses. In this primer, we mainly cover the high-level aspects of these fundamentals (Exhibit 1):

Blockchains as open-data structures. In Web3, application data are no longer stored in private databases but rather on an open-data structure that anyone can write to and read from. This open-data structure is the blockchain. Blockchains operate as public databases that store and secure all relevant and transactional data. They are often referred to as “distributed digital ledgers,” meaning that the core databases are duplicated and spread among multiple participants in a network of computer servers called “nodes.” The “blocks” in blockchain are individual segments of data that are interlinked or chained together. As new data are added to the network, a new block is created and attached permanently to the chain. All nodes are then updated to reflect the change. The lack of central data storage is a critical differentiator from traditional databases. Among other advantages, this means that the system is not subject to a single point of failure or a single point of control or censorship. User data are no longer fragmented across platforms, nor are they proprietary or for sale.

Web3 applications and use cases are built on top of three technology fundamentals: blockchain, smart contracts, and digital assets.
Exhibit 1

Smart contracts as disintermediated functionality. Smart contracts are software programs stored on the blockchain that automatically execute a verified transaction based on predefined and agreed parameters. They require careful preparation and setup because they are often deployed as immutable programs, but once in place, they can be executed rapidly and cost-efficiently without the need for intermediaries and their extractive revenues. The logic of an application is predetermined in the contract and can be difficult to change once deployed. These applications are often governed by a decentralized autonomous organization (DAO), a form of collective governance by users of the application who own governance tokens of the smart contract. If the DAO is set up correctly, no company can unilaterally decide to change the parameters of the application. This stands in stark contrast to Web2 applications, which give companies sole discretion over specific parameters like pricing.

Digital assets and tokens as decentralized ownership. Digital assets are intangible digital items with ownership rights. As such, they are supposed to represent verifiable and ownable digital values—although in many geographies, the legal framework surrounding these digital assets and their ownership rights is not sufficiently clear yet. These assets exist on the blockchain across applications and can engage with smart contracts. Broadly speaking, there are currently five types of digital assets:

  • native tokens, which are the monetary incentives used to compensate nodes for maintaining and updating the respective blockchain
  • stablecoins, which are supposed to represent cash on the blockchain and are pegged to fiat currencies like the US dollar, or central bank digital currencies (CBDCs), which are regulated by a central bank 2
  • governance tokens, which are tokens that represent voting rights on the functional parameters of smart contracts
  • non-fungible tokens (NFTs), which are a unique, indivisible digital asset with provable ownership
  • digital assets that represent claims on real-world assets such as commodities, real estate, or intellectual property, and are “tokenized” into divisible digital assets on the blockchain

While each digital asset has a specific functionality, asset ownership information is no longer stored on private, regulated ledgers (such as those of a bank) but on the blockchain, enabling user-owned value that can be stored, verified, and transacted independently of third parties. In addition, these assets can engage with smart contracts and be put to “productive” use—for example, earning yield for their owners as they are autonomously deployed by these contracts.

Bringing Web3 to life: Automated lending as an example of what may change

To illustrate the disruptive potential of Web3, it is best to start with the use case where Web3 found its first product-market fit: financial services. Remittances, asset swaps, trade finance, and insurance have all begun to employ smart contracts to achieve automation efficiencies. Lending may demonstrate one of the most compelling implementations of Web3 to date.

In today’s legacy financial services, lending relies on the bank as the trusted intermediary to safeguard funds and originate loans (Exhibit 2). Depositors provide funds in return for a small amount of interest. The bank then performs record keeping on a private ledger and assembles information about potential borrowers to determine their creditworthiness and the price of their loan. Additional fees charged to borrowers fund these activities and provide revenues to the bank’s management. In recent years, however, with rates at historic lows, very little interest was returned to depositors.

Web3 could represent a paradigm shift in business models for digital applications.
Exhibit 2

With Web3, depositors still seek to earn interest on their deposits, but instead of entrusting their funds to a bank or nonregulated platform, they themselves hold their funds in a noncustodial wallet that represents an account on the blockchain. All ownership and transaction data reside on the blockchain rather than with the bank or nonregulated entity. Customers no longer entrust their funds to a company to lend them out; instead, they can deposit their funds as liquidity into a smart contract. The smart contract effectively escrows these funds and only disburses them when preestablished conditions are met. Borrowers still look for loans but can only receive funds from the smart contract (which were originally provided by the depositors) after the borrower has posted sufficient collateral. By taking out a loan against collateral, borrowers can still enjoy potential price appreciation of the collateral and create liquidity without incurring a taxable event (which would occur when selling).

All terms of the loan, including the loan-to-value (LTV) ratio, interest paid, and liquidation thresholds, are predetermined by the logic in the smart contract and are available transparently to all participants. Borrowers still pay interest rates on their loans, but these interest rates no longer accrue to management and shareholders. In this instance, the contract has neither management nor shareholders; it is governed by a DAO that often has no claim on any of the revenues. The interest on loans is paid into the smart contract and disbursed back to the original depositors of the liquidity. Credit risk is minimized because of overcollateralization requirements and automatic liquidations. More than $200 billion in loans was disbursed last year from the largest Web3 lending platforms—and cumulative bad debt is currently roughly $1 million, despite significant volatility.3 Web3 lending platforms continued to operate even during the market turmoil. No deposits were lost or frozen, and withdrawals continued to occur. One prominent failed crypto lender even continued to pay back its loans on Web3 platforms to regain its collateral after it filed for bankruptcy.

This example underscores how the role of the bank as a custodian, central ledger, and credit decisioning engine can be disintermediated. The traditional interest payment revenues associated with this service accrue to the depositors, rather than to the bank’s management and its shareholders. The smart contract itself often accrues zero revenue, but sometimes will accrue a small spread used for insuring funds. And in recent months, as the price of the underlying loan collateral has fallen, loan liquidations have been triggered automatically by each smart contract without creating delinquencies associated with each loan.

Web3 effectively enables traditional revenue streams to accrue to the users of a platform, enhancing the user value proposition relative to their Web2 equivalents. The lending example also shows how Web3 may enable services to be delivered more cost-effectively and 24/7 through shared infrastructure, compliance, and automation.4

Web3 effectively enables traditional revenue streams to accrue to the users of a platform, enhancing the user value proposition relative to their Web2 equivalents.

While deposits and loans were one of the first examples with product-market fit, other decentralized finance (DeFi) use cases have emerged, most notably swaps. A similar logic applies here: the Web3 implementation enables traditional revenues in the form of trading fees to accrue to depositors (in other words, liquidity providers) of the smart contract instead of the traditional central-exchange company. Liquidity providers for some of the most popular swap pairs (such as Ethereum and USD Coin) were averaging a trading-fee revenue of 30 to 70 percent of the capital provided last year.5 Once again, the DAO that governs the smart contract earns no revenue; all revenue accrues to depositors rather than to the management of a central exchange. While past returns were relatively high, consider the return on equity that organizations could make if they were able to materially reduce trading administration costs through a smart contract and outsourced their infrastructure costs through blockchain, not including essential risk-management and compliance professionals. Web3 could lead to pricing-power compression (in other words, lower fees) due to the open-source nature of the protocols and automation.

Product market uses have in some cases been primarily speculative. Yet the growing range of applications in financial services is indicative of the meaningful innovation that Web3 can generate. Before the recent market downturn, more than $250 billion was actively put to use in smart contracts, yielding autonomous returns for its depositors.6

As such, in DeFi, automated and programmable smart contracts for lending, trading, derivatives, and insurance, among others, have begun competing with traditional intermediaries, including banks, brokers, and insurance agents. In some cases, they offer solutions to challenging features of traditional finance such as counterparty risk, high transaction fees, long settlement times, the large share of value captured by intermediaries, system opacity, and a lack of interoperability. If businesses currently provide services that can be coded into an automated smart contract, they would do well to take notice.

Finally, despite the recent market downturn, the speed of innovation is unlikely to slow. Thousands of new developers are joining the Web3 movement every month.7 Given the open-source nature of the technology, developers can easily develop new applications by building on established programs that have been battle-tested and proved under severe market conditions. It may be hard for even the largest organizations to compete with this scale of global developer base and innovation, and the speed could accelerate as more users and developers join.

Risks and challenges of Web3 that still need to be addressed

Web3 is now spreading into many other sectors, including the social sector and carbon markets, art, real estate, gaming, and more. It is also a building block for an interoperable metaverse, an entirely virtual parallel universe under construction that is attracting massive investment from consumer companies and venture capitalists, among others.8 As with any new technologies billed as disruptive, it remains to be seen just how revolutionary blockchain, smart contracts, and digital assets will prove to be. While skepticism is significant among some parts of the public, especially following the steep declines in the valuation of digital assets and the recent bankruptcies of some funds and consumer deposit companies, user interest remains high and engagement is growing, especially for younger generations. In a recent McKinsey survey of 35,000 active online users in some of the largest digital-asset markets—India, Singapore, the United Kingdom, and the United States—20 percent of respondents age 25 to 44 said they own digital assets. Two-thirds of those had already made payments using digital assets (presumably for peer-to-peer payments or Web3 commerce) and just over half had used NFTs as a form of digital identity or performed play-to-earn activities with digital assets.

Before it can fully establish itself, Web3 will need to overcome continuing challenges, obstacles, and risks for both consumers and institutional participants.

Web3 will nonetheless need to overcome continuing challenges, obstacles, and risks for both consumers and institutional participants before it can fully establish itself.

The chief challenge is regulatory scrutiny and outlooks. Regulators in many countries are looking to issue new guidance for Web3 that balances the risks and the innovative potential, but the picture remains unsettled. For now, there is a lack of clarity—and jurisdictional consistency—about classifying these assets, services, and governance models. For example, smart contracts are not yet legally enforceable. This in turn limits the potential for institutional adoption, especially by heavily regulated entities. Governance remains a work in progress, and the integrity of decentralized autonomous organizations—the collective community mechanisms that are supposed to oversee this new decentralized world—varies widely and is often not yet rock-solid (as some recent examples in DeFi have shown), although it is evolving.

Furthermore, the user experience in this new ecosystem is not yet ready for mainstream adoption. Interfaces are often poorly designed, and the underlying technology is still too cumbersome for users to have a seamless experience. Security is also a concern: until users have peace of mind, they will likely not adopt this technology en masse. Fraud continues to be a risk, with a variety of “rug pulls,” Ponzi schemes, and social-engineering scams dogging the nascent sector, while know-your-customer and anti–money laundering procedures are often lacking. While Web3 ultimately will put the user value proposition front and center, the current state of consumer protection is clearly insufficient.

Indeed, a prominently featured concern is that users engaged in Web3 may not fully understand the risks of decentralized technology, thus expecting the same type of protections they are used to from centralized (and often regulated) entities. For example, transactions on the blockchain, by their very nature, are irreversible, so the concept of clawbacks or user fund retrieval does not currently exist (although it is technically possible).

The technology itself may not be ready for mainstream adoption. Data privacy in the current system is arguably lacking. For example, while wallets are initially anonymous, existing tools are getting better at attributing wallet identity based on transaction history. Once anonymity is lost, all transactions can potentially be viewed anywhere in the world. While this public nature can be beneficial, users will likely need to have access to on-demand privacy for the technology to have mainstream appeal.

Last, transaction cost is also a factor, making some of the technology protocols too expensive to use at present. For example, fees paid to complete and record a transaction on the Ethereum blockchain (so-called gas fees) could be prohibitive for users in large parts of the world, while cheaper and faster alternatives do not typically have the same level of resilience or operational uptime that is needed for mainstream adoption. Smart-contract resilience is unproven, with new exploits of weaknesses in new code or “logic hacks” happening weekly, and the accuracy of “oracles”—that is, information feeds that are used in decisioning by smart contracts—continues to be a work in progress. Web3 infrastructure needs to continue to evolve to become more robust—many critical services are often too centralized or too sensitive to failure. Finally, given their environmental footprint, proof-of-work blockchains could present specific adoption challenges for users, corporations, and regulators at a time of growing attention to environmental, social, and governance issues, although the footprint of proof-of-work blockchains is continuously evolving, and there is ongoing work to reduce it.

Imagining the Web3 endgame

The above examples highlight both Web3’s disruptive potential and its still-nascent implementation. Regulatory oversight, user experience, and the underlying technology will all need to further mature for mainstream adoption to occur. Leading Web3 players and others who are starting to use the technology are aware of these challenges and are actively working to address them, often funded by extensive venture capital (VC). Indeed, VC investments in Web3 exceeded $18 billion in the first half of 2022,9 remaining on track to top the full-year total VC investments of $32.4 billion in 2021. Despite these early challenges, adoption of Web3 applications has occurred at an exponential pace,10 driven by the enhanced user value proposition and disintermediated business models.

The above examples highlight both Web3’s disruptive potential and its still-nascent implementation. Regulatory oversight, user experience, and the underlying technology will all need to further mature for mainstream adoption to occur.

For all the technical complexity and unanswered questions, Web3 remains an important internet trend to watch, and C-suite executives across a range of sectors may want to keep it on their radar, if only because of the potential for rapid disruption that it represents. Executives could develop a deliberate strategy by asking how Web3 native companies could disrupt their industry and what challenges and opportunities this might present.

If the disruption does take place, it and other associated opportunities for incumbents (depending on their risk appetite) are likely to happen across three levels: assets, infrastructure, and services (Exhibit 3).

Looking ahead, Web3 could affect financial services in far-reaching ways.
Exhibit 3

Assets. Novel and unexplored assets (including stablecoins, CBDCs, governance tokens, NFTs, and tokenized real estate, among others) could continue to form, driven by new use cases and expanding latent retail and corporate demand. Certain assets could also continue to tokenize, indicating that for many assets—including bonds and commodities—both their traditional and tokenized versions may coexist. As such, the opportunity for corporations would be to facilitate access to new Web3 assets such as NFTs or look to bring existing assets into a Web3 ecosystem. This could be done by using tokenization services to bring realworld assets, such as bonds, music, or art, into Web3 environments.

Infrastructure. As new assets emerge, core infrastructure will likely continue to evolve and mature to support them. There is a need for more infrastructure related to custody and asset servicing, clearing and settlement, tokenization and issuance, risk and compliance, and wallets and identity, to name just a few areas that are currently insufficiently addressed by legacy players. Incumbent banks and others have an opportunity to partner with Web3 native companies to innovate their own offerings and support the maturation of the Web3 infrastructure that is needed for mainstream adoption.

Services. As the infrastructure to support Web3 native assets matures and the technology continues to evolve, new Web3 native equivalents that replicate some of the functionality of existing services could emerge. We are already starting to see the emergence of Web3 native marketplaces, payment networks, and deposit and loan platforms. Many expect the emergence of Web3 gaming, social, and media platforms—the Web3 metaverse—to be next. While it may be hard to predict which use cases will scale fastest, multiple platforms, both traditional and Web3, may coexist to deliver similar functionality. Each, however, may have a different value proposition: the traditional service may have higher consumer protection and better user experience, while the native Web3 version may have better economics for the user or operate around the clock. Incumbents may increasingly partner with Web3 disruptors that serve as a bridge to deliver or tap into new services. The winners of this trend may figure out how to bring new and enhanced value propositions to their existing user base while retaining some of the economics and robust compliance and consumer protections of traditional services.

Web3 is still a world in the throes of creation. Many issues, including questions around regulation, will need to be resolved before it convincingly scales up to reach mass adoption. Yet the value proposition for consumers at the heart of it—one that unifies data, functionality, and value, and in doing so creates opportunities for new and more efficient forms of applications and asset ownership—is a powerful one. If history is any guide, companies large and small, as well as the public and social sectors, may want to take note of the inroads Web3 is already making and start thinking about responsible ways to interact with it. Incumbents that fail to do so may suddenly find themselves overtaken by a fast-moving set of new technologies, new assets, and new ways of doing business.

ABOUT THE AUTHOR(S)

Anutosh Banerjee is a partner in McKinsey’s Singapore office; Robert Byrne is a senior partner in the San Francisco office, where Ian De Bode is a partner; and Matt Higginson is a partner in the Boston office.

Top 10 Web3 Applications You Must Know

Organizations across multiple industries and individuals wonder about the new possibilities associated with web3. An overview of the top web3 applications in DeFiNFTs and the metaverse could create the feeling of “missing out” in many people. However, you are not late when it comes to adoption of web3, particularly with the sheer volume of opportunities opening up in recent times. 

The growing use of VR technologies alongside progress in the metaverse, DeFi and NFT markets establish the best route forward for web3 applications. Web 3.0 has the right ingredients to revolutionize digital transformation throughout the world. Therefore, the interest in key web3 applications for the future has been growing by profound margins in recent times. The following discussion will help you learn about the top applications in the domain of web3. At the same time, you can also learn about the possibilities for leveraging web3 in real-world applications.

Aspiring to Become a Certified NFT Expert? Enroll in Certified NFT Professional (CNFTP) Course Now!

The Real Potential of Web3

Web 3.0

The web3 concept is gradually evolving as a prominent shift in the way people see, perceive and use the internet. Web 3.0 basically refers to a new set of principles for establishing the basic infrastructure for facilitating internet services and transactions. You can think of the best web3 applications as an innovative take on conventional applications with new value improvements. Web3 incorporates technologies and principles such as AI, semantic web, blockchain and machine learning for creating a new version of the internet. The new version of the internet with web3 can allow decentralized communication and interaction among users and applications. 

At the same time, web3 has also evolved as a new internet that can learn exactly what you are trying to search for and deliver accurate results. Interestingly, web3 can introduce many promising value improvements for businesses in different areas. Let us learn more about the possible use of web 3.0 apps before identifying the top picks available right now. Here are the different ways to utilize web3 in the real world.

  • Better transparency for B2B businesses, which enables development of trust-based relationships between customers and clients. Web3 can ensure customer involvement and feedback alongside optimizing their experiences to garner their trust.   
  • The examples of top web3 apps in social media industry could show how they can shift the dynamics of control towards the end users. Web3 can remove single centralized authorities and the ability to store and misuse user data. In addition, web3 can also revolutionize the social media experiences of users by offering rewards in the form of digital assets
  • The integration of web3 with IoT devices can open up new routes for productivity, especially with better risk management options. Most important of all, the integration of web3 and IoT could help in opening up businesses to expansion and growth. 
  • The different web3 apps examples could showcase exactly how web3 provides an open stage for innovation. The integration of web3 technologies with advanced AI and machine learning models could help introduce a significant transformation of conventional marketplaces. As a result, organizations can explore newer possibilities for maintaining their competitiveness in the worldwide market. 
  • AI-based chatbots are another example of using web3 to your advantage for offering personalized customer experiences. The applications of web 3.0 in AI-based chatbots can also capitalize on interoperability for accessing confidential data throughout multiple devices and apps. 
  • Assessment of the web 3.0 applications examples would also emphasize the interesting ways of leveraging blockchain technology. Blockchain can help in ensuring safety and cost-efficiency in transferring digital assets between businesses or within internal teams. With the help of blockchain, web3 could ensure better and seamless user experiences alongside assured safeguards against security risks.

Build your identity as a certified blockchain expert with 101 Blockchains’ Blockchain Certifications designed to provide enhanced career prospects.

What Can You Expect in Web3 Apps?

The potential of web 3.0 applications for dealing with multiple use cases establishes the ideal grounds for trying out web3 apps. Web3 emphasizes developing an open and equal network with similar rights for anyone to participate in the network. In addition, web3 also prevents any concerns regarding security and privacy. The signifying traits of web3 have ensured many important value advantages for web3 applications. Here are the top traits you can expect in web3 applications. 

All these traits ensure that web 3.0 apps are easy to access and use with considerable difficulties for compromising their security. In addition, web3 applications can work seamlessly across different applications with the flexibility for transferring and using data across multiple environments. Furthermore, users have complete control over the ownership of their data and content, alongside ensuring accessibility of content. 

Curious to gain more insights and clarity regarding the potential of web3? Check the detailed guide Now on Frequently Asked Questions About Web3

Top Web3 Applications 

The review of best web3 apps prevalent in the market right now can help you find out the practical value of web3. The growth of web3 in the future would depend considerably on how top applications in the field of web3 can help users. You can find web3 apps for almost any type of use case ranging from browsers to gaming and social media. Here is a brief outline of the renowned web3 applications you must watch out for in 2022. 

1. Everledger

Everledger

One of the first entries among web3 apps examples would point at Everledger, the distributed digital global registry. It basically offers a unique record to each user, and users can store data in the cloud with flexibility for accessing the data. The primary applications of Everledger focus on ensuring strong safeguards against fraud. 

More specifically, the Everledger app helps in tracking diamonds, gold, wine and other valuable assets. It helps in tracking the use of an item throughout its journey in the global supply chain. Customers can scan the Everledger sticker to ensure that they purchase authentic products. The Everledger app sets a distinct milestone in web security by ensuring safety against fraud without using personal data or difficult passwords. 

2. Storj

Storj

The outline of top web3 applications would also draw the limelight towards Storj, a decentralized storage solution. It helps users with secure data storage while ensuring fault tolerance and redundancy. Storj leverages blockchain technology to revolutionize the benefits of cloud storage, albeit on a dispersed network. The most significant benefit associated with Storj is the flexibility for unlimited uploads and downloads, irrespective of the time. 

On top of it, Storj fulfills the conditions for web3 apps, such as open-source design and a free-to-use model. Furthermore, Storj also ensures better ease of use as you can start navigating the application in a few clicks. Another important highlight about Storj as a web3 application would refer to the Storj coin, which powers the Storj decentralized storage platform.

Want to learn blockchain technology in detail? Enroll Now in Certified Enterprise Blockchain Professional (CEBP) Course

3. Brave Browser

Brave Browser

The popular entries among key web3 applications could never miss out on Brave browser. It is a new browser that aims to offer ad-blocking and other privacy-enhancing features on mobile devices. As a matter of fact, Brave has become one of the most preferred alternatives to other popular browsers such as Mozilla Firefox and Google Chrome. 

In addition, Brave has also successfully become one of the most secure browsers with promising security features. The new open-source browser leverages blockchain technology to safeguard the privacy of users. Brave browser would also utilize blockchain for interrupting unwanted ads as well as trackers. Most important of all, Brave browser also enables the flexibility for monetization of user data in return for Brave tokens. 

4. Beaker Browser

Beaker Browser

The next choice among web3 browsers which can make a huge difference would be the Beaker Browser. Presently under development at Blue Link Labs, the Beaker browser is an open-source and free browser for web 3.0. The peer-to-peer web browser can help users in publishing web apps as well as websites from the browser itself. 

Beaker browser is definitely one of the best web3 applications for usability as it excludes the requirements for setting up and maintaining separate servers. In addition, users don’t have to worry about hosting their content on third-party servers, thereby improving security.

Start learning Blockchain with World’s first Blockchain Skill Paths with quality resources tailored by industry experts Now!

5. Sola

Sola

Sola is an effortless entry among top web3 apps for its unique functionality. It is a decentralized social media platform based on the Ethereum blockchain, IPFS storage and distributed nodes. Sola leverages blockchain and artificial intelligence to create a combination of social networks. The web3 social media platform capitalizes on AI algorithms for distributing relevant information to users according to their preferences.

Sola focuses on developing a social media platform where everyone has equal freedom of expression without granting a monopoly to advertisers, influencers and big brands. The advanced neural learning network of Sola, Neutral AI, helps in optimizing the process of sharing content. On top of it, users can also explore monetization opportunities for sharing and creating content. 

6. Decentraland

Decentraland

The most-hyped project in the metaverse or the future of web3, Decentraland is an online virtual world with many interesting experiences. Decentraland is an obvious entry among best web3 apps with something out of the ordinary. The virtual world allows users to meet, interact, socialize and play games with other users. 

In addition, the Decentraland metaverse revolves mostly around customization of virtual parcels of land and creating new experiences. Users have been exploring the prospects for mortgages on virtual property and renting out virtual property for events in the metaverse. As a matter of fact, Decentraland has captured the attention of many big brands such as Samsung, Adidas and PwC.

Aspiring to Become a Certified Metaverse Expert? Enroll in Certified Metaverse Professional (CMP) Certification Course Now!

7. Steemit

Steemit

Another example of social media applications based on web3 principles would focus on Steemit. It is more like the web3 analog of Reddit and works just like a decentralized social blogging website. The biggest highlight for Steemit, as one of the web3 apps examples, would refer to monetization of user content. 

Steemit users can receive payments for their content on the grounds of community voting. With over 1.7 million registered accounts on the platform, Steemit has been developed on a proprietary blockchain termed Steem and complies with web3 principles in its core operations.     

8. Ethlance

Ethlance

The applications of web3 in the field of job seeking and professional networking have resulted in platforms like Ethlance. The online platform helps users apply for jobs. Interestingly, Ethlance uses blockchain technology to expedite the process of matching job seekers with suitable employers. 

On top of it, Ethlance is one of the innovative web 3.0 applications examples that open up new opportunities for freelancers. Ethlance can break down the conventional barriers between freelancers and companies as a decentralized talent marketplace. Employers could lower their expenses in recruiting talent while freelancers can achieve improved control over their work.

Start your blockchain journey Now with the Enterprise Blockchains Fundamentals – Free Course!

9. Secretum

Secretum

The collection of web 3.0 applications you must follow in 2022 would also showcase Secretum, a new decentralized messaging app. You can think of Secretum as the decentralized alternative to messenger apps such as WhatsApp. Users can connect to each other without a phone number or an email address, thereby ensuring better security and privacy. The in-build trading functionality in Secretum also provides the flexibility for trading cryptocurrenciesNFTs and other blockchain tokens efficiently. 

10. DTube

DTube

Just like Brave, as the decentralized alternative to popular browsers, you can find an alternative to video streaming giant YouTube with DTube. The decentralized video streaming platform does not control the videos which appear in user feeds. Users have complete control over what they see and share on DTube. 

In addition, users have the power to decide the selection of videos for monetization. As one of the key web 3.0 applications for users in the future of web3, DTube also exercises decentralized governance. Users are in complete control over censorship and other guidelines for content visibility and usage on the video-streaming platform.

WEB3 BENEFITS

Many Web3 developers have chosen to build dapps because of Ethereum’s inherent decentralization:

  • Anyone who is on the network has permission to use the service – or in other words, permission isn’t required.
  • No one can block you or deny you access to the service.
  • Payments are built in via the native token, ether (ETH).
  • Ethereum is turing-complete, meaning you can program pretty much anything.

PRACTICAL COMPARISONS

Web2Web3
Twitter can censor any account or tweetWeb3 tweets would be uncensorable because control is decentralized
Payment service may decide to not allow payments for certain types of workWeb3 payment apps require no personal data and can’t prevent payments
Servers for gig-economy apps could go down and affect worker incomeWeb3 servers can’t go down – they use Ethereum, a decentralized network of 1000s of computers as their backend

This doesn’t mean that all services need to be turned into a dapp. These examples are illustrative of the main differences between web2 and web3 services.

WEB3 LIMITATIONS

Web3 has some limitations right now:

  • Scalability – transactions are slower on web3 because they’re decentralized. Changes to state, like a payment, need to be processed by a node and propagated throughout the network.
  • UX – interacting with web3 applications can require extra steps, software, and education. This can be a hurdle to adoption.
  • Accessibility – the lack of integration in modern web browsers makes web3 less accessible to most users.
  • Cost – most successful dapps put very small portions of their code on the blockchain as it’s expensive.

CENTRALIZATION VS DECENTRALIZATION

In the table below, we list some of the broad-strokes advantages and disadvantages of centralized and decentralized digital networks.

Centralized SystemsDecentralized Systems
Low network diameter (all participants are connected to a central authority); information propagates quickly, as propagation is handled by a central authority with lots of computational resources.The furthest participants on the network may potentially be many edges away from each other. Information broadcast from one side of the network may take a long time to reach the other side.
Usually higher performance (higher throughput, fewer total computational resources expended) and easier to implement.Usually lower performance (lower throughput, more total computational resources expended) and more complex to implement.
In the event of conflicting data, resolution is clear and easy: the ultimate source of truth is the central authority.A protocol (often complex) is needed for dispute resolution, if peers make conflicting claims about the state of data which participants are meant to be synchronized on.
Single point of failure: malicious actors may be able to take down the network by targeting the central authority.No single point of failure: network can still function even if a large proportion of participants are attacked/taken out.
Coordination among network participants is much easier, and is handled by a central authority. Central authority can compel network participants to adopt upgrades, protocol updates, etc., with very little friction.Coordination is often difficult, as no single agent has the final say in network-level decisions, protocol upgrades, etc. In the worst case, network is prone to fracturing when there are disagreements about protocol changes.
Central authority can censor data, potentially cutting off parts of the network from interacting with the rest of the network.Censorship is much harder, as information has many ways to propagate across the network.
Participation in the network is controlled by the central authority.Anyone can participate in the network; there are no “gatekeepers.” Ideally, the cost of participation is very low.

Note that these are general patterns that may not hold true in every network. Furthermore, in reality the degree to which a network is centralized/decentralized lies on a spectrum; no network is entirely centralized or entirely decentralized.

What exactly is Web 3?

Web 3.0 is the third version of the Internet, and it is a step forward from the existing Web 2.0 version. The third generation of the internet will be more transparent, decentralized, and feature vast amounts of content that will be available to everyone.

Web3 is a concept for a third generation of the internet that is still in development. It comes after Web 1.0, which relied on traditional websites filled with commercial content, and Web 2.0, which saw the debut and rise of social media.

How to build your Web3 game online

Although Web 2.0 gave the average person more ability to produce, and even profit from, any such plans still required the involvement of a Big Tech company like YouTube (owned by Google), Facebook, Twitter, or any of the major social networks that influencers and individuals rely on to reach their audiences.

Web3 proponents argue that by entirely decentralizing the web, they can cut out the Big Tech intermediaries, much like how bitcoin is aiming to seize control of global money from huge financial organizations and governments. The parallels don’t stop there. Web3 is likewise built around blockchain technology, much like cryptocurrency.

Why web3?

The goal of Web 3.0 is to create a more open and equitable network in which anybody may participate without fear of losing their privacy or security.

Users offer personal and confidential data to the firms that govern these platforms by creating content, which is one of the biggest drawbacks of web2. Web3 will be a superior alternative to the internet as we know it today because of a few more features such as:

• Interoperability: One of the primary elements of Web 3.0 is interoperability. It will be easier for applications to work across different devices and platforms, such as televisions, cellphones, smart roadways, and so on, with a decentralized network. Web 3.0 apps will also be simple to create for developers.

• Self-governing: Web 3.0 does not require the control of a single entity. Larger corporations may no longer have complete control over the internet. As a result, decentralised apps, also known as dApps, cannot be filtered or limited in any way.

 Permissionless: Anyone can create a blockchain address and interact with it. It’s impossible to overestimate the power of being able to access permissionless blockchains.

Users will not be limited by their wealth, location, sexual orientation, gender, or a variety of other demographic and societal criteria. Digital assets and wealth may be transferred rapidly and efficiently across borders and around the world.

• Secure Network: The characteristics of Web 3.0 will be more secure than those of its predecessors. Two elements, namely distributed nature and decentralization, make this possible.

Hackers and exploiters will have a hard time breaking into the network. Each of their operations can also be traced and retracted within the network if they are able to do so.

• Data Ownership: End-users will recover the entire ownership and management of their data while also benefiting from encryption security.

Permission/need or on a case-by-case basis, information could then be supplied. Large corporations such as Facebook and Amazon now have a plethora of servers keeping personal information such as income, interests, dietary preferences, credit cards, and so on.

These data aren’t just collected to improve their services; they’re sold to advertisers and marketers who spend billions of dollars each year for them.

• Ubiquity: Content is accessible through many apps, every device is connected to the internet, and services may be accessed from anywhere.

Top ten web 3 applications in 2022

Browsers, gaming, remote work, advertising, social media, messaging, dating, banking, and logistics are just a few of the apps available.

Sapien

Metaverse image 73
Sapien

Sapien is a one-of-a-kind example of Web 3.0. It’s a decentralized social news site powered by the Ethereum blockchain. It’s also incredibly configurable.

When it comes to social news, it’s a good alternative to Google or Facebook. It will allow users to construct their own apps without the need for payment or advertisements. Sapien’s platform gives users the tools they need to quickly build and launch apps.

Sapien is a blockchain-based web 3 platform that provides apps, services, and technology. Through a collection of self-sovereign tools, it enables users to interact, transact, share information, and form communities. Sapien web 3 was established to provide a freeway for everyone to arrange their online lives.

Everledger

Metaverse image 74
Everledger

Everledger is a distributed digital global registry that strives to offer each user a unique record. Users can keep data in the cloud and access it whenever they want. It safeguards users, banks, open markets, and insurance from fraud.

This business keeps track of diamonds, wine, gold, and other valuables. Everledger keeps track of where and how an item was utilized from the moment it was logged in to the time it was logged out of the global supply chain. Consumers can use Everledger to safeguard their purchases by scanning the Everledger sticker.

This is a significant step forward in internet security because it guards against fraud without the use of difficult passwords or personal data.

In addition, the company has a patent filed on an RFID chip that will allow users to retrieve objects via an app, which would be extremely useful for people who frequently misplace their keys or smartphones.

LBRY

Metaverse image 75
LBRY

LBRY is a decentralized file-sharing and payment network based on the blockchain that powers social networks and video platforms.

LBRY is a decentralized digital library that houses a variety of content types. You may read, watch, and play on the site as a user. It appears to be one of the earliest Web 3.0 projects, as it supports books, music, and movies.

Storj

Metaverse image 76
Storj

Storj is a decentralized storage solution that allows users to securely store their data in a redundant and fault-tolerant manner. One of the most popular decentralized storage systems is Storj. It’s also one of the most historic. Anyone can store data with Storj.

It makes use of blockchain technology and provides many of the same advantages of cloud storage, but on a more dispersed network. One of Storj’s benefits is that it enables unlimited uploading and downloading at any time. It’s also free to use and open-source.

Anyone can get started with it with only a single click. Users are at the centre of the payment mechanism since they can pay as they go.

The Storj platform is powered by the Storj coin. Users can set an expiration date for their data on Storj, making it “self-destructive” in some ways. While this is a relatively new technology, some prominent names in the industry have already teamed with Storj to integrate their solution, including Dropbox and Comcast.

Ethlance

Metaverse image 77
ethlance

Ethlance is an online platform that allows people to apply for employment and was created as a result of blockchain technology. The website connects job seekers with employers who will finish the process of locating a suitable employee.

It also opens up doors for freelancers that they might not have had before, and it breaks down boundaries between companies and freelancers. Ethlance is a decentralized platform that connects freelancers and employers.

It is the world’s first decentralized talent marketplace, assisting professionals in lowering expenses and increasing revenues. Freelancers have complete control over their work, and artists and content creators can earn more than they could anywhere else. All payments are processed in ETH, making it simple to connect with clients all across the world.

Brave Browser

Metaverse image 78
Brave Browser

Brave Browser is a new browser that promises to bring ad-blocking and privacy features previously only available on the desktop to mobile devices.

Brave Browser is a quicker and safer alternative to popular browsers developed by the Mozilla Foundation. It has been dubbed “the most secure browser ever developed” due to its security.

The Brave Browser is a new open source browser that promises to preserve users’ privacy utilizing blockchain technology by blocking unwanted advertising and trackers.

It also has anti-cryptojacking features, allowing users to support their favorite websites without using up their data limit. It also gives consumers the option of selling their data for cryptocurrency.

ySign

Metaverse image 79
ySign

ySign is another communication messenger that is an excellent example of Web 3.0. With its solution, it is poised to transform the world of messengers.

ySign does not function on a single server, but rather on the power of thousands of computers around the world, known as nodes, in the Inery Ecosystem. ySign is resistant to data exploitation and a single point of failure because of the advantages of blockchain technology.

ySign is a blockchain-based decentralized messaging app with perfect privacy, anonymity, and an integrated crypto wallet. There is no central server on which personal data could be stored or exploited.

Beaker Browser

Metaverse image 81
Beaker browser

Blue Link Labs is actively developing the Beaker browser, which is a free and open-source web browser. Beaker Browser is a peer-to-peer web browser that allows users to publish websites and web apps directly from the browser, eliminating the need to set up and maintain a separate web server or host their content on a third-party server.

It’s a community where anyone can join, share, and boost their apps. It’s also a creative tool that everyone may experiment with. It’s a browser that runs on the Web 3.0 standard.

Livepeer

Metaverse image 83
Livepeer

It is a decentralized peer-to-peer video streaming platform that is powered by Ethereum. It offers an open-source streaming service with the goal of creating a Web 3.0 streaming stack.

LivePeer is a real-time communication tool that connects two people. It also allows users to watch streaming videos and capture screencasts of their computer, which they may save as GIFs or download as video files.

LivePeer allows you to transmit live streaming video from your phone directly to the platform, which has a number of advantages for these apps. The first advantage is that it allows you to increase your revenue by selling advertising space in your stream.

Sola

Metaverse image 82
Sola

Sola is a decentralized social platform that uses distributed nodes, IPFS, and the Ethereum blockchain to power it. Sola creates a combination of social networks and media using blockchain artificial intelligence.

With the use of A.I. algorithms, it disseminates useful information to readers based on their preferences. Users get what they desire, which is a high-quality material, in this way.

Rather than just another social media platform, Sola aspires to create an environment where all users are treated equally and have a greater voice than on traditional social media, where influencers and advertisers have an unfair monopoly.

Sola employs an advanced neural learning network dubbed Neutral AI to optimize the sharing process of Sola cards, rather than relying just on user reaction to distribute postings. The platform’s most compelling feature is the chance to earn real money by generating and sharing content.

What is Web3? The Decentralized Internet of the Future Explained

Nader DabitNader Dabit

What is Web3? The Decentralized Internet of the Future Explained

If you’re reading this then you are a participant in the modern web. The web we are experiencing today is much different than what it was just 10 years ago. How has the web evolved, and more importantly – where is it going next? Also, why do any of these things matter?

If history has taught us anything, these changes will matter a lot.

In this article, I will lay out how the web has evolved, where’s it going next, and why this matters.

Think about how the internet affects your life on a daily basis. Consider how society has changed as a result of the internet. Social media platforms. Mobile apps. And now the internet is going through another paradigm shift as we speak.

The Evolution of the Web

The web has evolved a lot over the years, and the applications of it today are almost unrecognizable from its most early days. The evolution of the web is often partitioned into three separate stages: Web 1.0, Web 2.0, and Web 3.0.

What is Web 1.0?

Web 1.0 was the first iteration of the web. Most participants were consumers of content, and the creators were typically developers who build websites that contained information served up mainly in text or image format. Web 1.0 lasted approximately from 1991 to 2004.

Web 1.0 consisted of sites serving static content instead of dynamic HTML. Data and content were served from a static file system rather than a database, and sites didn’t have much interactivity at all.

You can think of Web 1.0 as the read-only web.

What is Web 2.0?

Most of us have primarily experienced the web in its current form, commonly referred to as web2. You can think of web2 as the interactive and social web.

In the web2 world, you don’t have to be a developer to participate in the creation process. Many apps are built in a way that easily allows anyone to be a creator.

If you want to craft a thought and share it with the world, you can. If you want to upload a video and allow millions of people to see it, interact with it, and comment on it, you can do that too.

Web2 is simple, really, and because of its simplicity more and more people around the world are becoming creators.

The web in its current form is really great in many ways, but there are some areas where we can do a lot better.

Web 2.0 Monetization and Security

In the web2 world, many popular apps are following a common pattern in their life cycles. Think of some of the apps that you use on a daily basis, and how the following examples might apply to them.

Monetization of Apps

Imagine the early days of popular applications like Instagram, Twitter, LinkedIn, or YouTube and how different they are today. The process usually goes something like this:

  1. Company launches an app
  2. It onboards as many users as possible
  3. Then it monetizes its user base

When a developer or company launches a popular app, the user experience is often very slick as the app continues rising in popularity. This is the reason they are able to gain traction quickly in the first place.

At first, many software companies do not worry about monetization. They strictly focus on growth and on locking in new users – but eventually they have to start turning a profit.

They also need to consider the role of outside investors. Often the constraints of taking on things like venture capital negatively affect the life cycle, and eventually the user experience, of many applications that we use today.

If a company building an application takes in venture capital, its investors often expect a return on investment in the order of magnitude of tens or hundreds of what they paid in.

This means that, instead of going for some sustainable model of growth that they can sustain in a somewhat organic manner, the company is often pushed towards two paths: advertisements or selling personal data.

For many web2 companies like Google, Facebook, Twitter, and others, more data leads to more personalized ads. This leads to more clicks and ultimately more ad revenue. The exploitation and centralization of user data is core to how the web as we know and use it today is engineered to function.

Security and privacy

Web2 applications repeatedly experience data breaches. There are even websites dedicated to keeping up with these breaches and telling you when your data has been compromised.

In web2, you don’t have any control over your data or how it is stored. In fact, companies often track and save user data without their users’ consent. All of this data is then owned and controlled by the companies in charge of these platforms.

Users who live in countries where they have to worry about the negative consequences of free speech are also at risk.

Governments will often shut down servers or seize bank accounts if they believe a person is voicing an opinion that goes against their propaganda. With centralized servers, it is easy for governments to intervene, control, or shut down applications as they see fit.

Because banks are also digital and under centralized control, governments often intervene there as well. They can shut down access to bank accounts or limit access to funds during times of volatility, extreme inflation, or other political unrest.

Web3 aims to solve many of these shortcomings by fundamentally rethinking how we architect and interact with applications from the ground up.

What is Web 3.0?

There are a few fundamental differences between web2 and web3, but decentralization is at its core.

Web3 enhances the internet as we know it today with a few other added characteristics. web3 is:

  • Verifiable
  • Trustless
  • Self-governing
  • Permissionless
  • Distributed and robust
  • Stateful
  • Native built-in payments

In web3, developers don’t usually build and deploy applications that run on a single server or that store their data in a single database (usually hosted on and managed by a single cloud provider).

Instead, web3 applications either run on blockchains, decentralized networks of many peer to peer nodes (servers), or a combination of the two that forms a cryptoeconomic protocol. These apps are often referred to as dapps (decentralized apps), and you will see that term used often in the web3 space.

To achieve a stable and secure decentralized network, network participants (developers) are incentivized and compete to provide the highest quality services to anyone using the service.

When you hear about web3, you’ll notice that cryptocurrency is often part of the conversation. This is because cryptocurrency plays a big role in many of these protocols. It provides a financial incentive (tokens) for anyone who wants to participate in creating, governing, contributing to, or improving one of the projects themselves.

These protocols may often offer a variety of different services like compute, storage, bandwidth, identity, hosting, and other web services commonly provided by cloud providers in the past.

People can make a living by participating in the protocol in various ways, in both technical and non-technical levels.

Consumers of the service usually pay to use the protocol, similarly to how they would pay a cloud provider like AWS today. Except in web3, the money goes directly to the network participants.

In this, like in many forms of decentralization, you’ll see that unnecessary and often inefficient intermediaries are cut out.

Many web infrastructure protocols like FilecoinLivepeerArweave, and The Graph (which is what I work with at Edge & Node) have issued utility tokens that govern how the protocol functions. These tokens also reward participants at many levels of the network. Even native blockchain protocols like Ethereum operate in this manner.

Native payments

Tokens also introduce a native payment layer that is completely borderless and frictionless. Companies like Stripe and Paypal have created billions of dollars of value in enabling electronic payments.

These systems are overly complex and still do not enable true international interoperability between participants. They also require you to hand over your sensitive information and personal data in order to use them.

Crypto wallets like MetaMask and Torus enable you to integrate easy, anonymous, and secure international payments and transactions into web3 applications.

Networks like Solana offer several hundred digit millisecond latency and transaction costs of a small fraction of a penny. Unlike the current financial system, users do not have to go through the traditional numerous, friction-filled steps to interact with and participate in the network. All they need to do is download or install a wallet, and they can start sending and receiving payments without any gatekeeping.

A new way of building companies

Tokens also brings about the idea of tokenization and the realization of a token economy.

Take, for example, the current state of building a software company. Someone comes up with an idea, but in order to start building they need money in order to support themselves.

To get the money, they take on venture capital and give away a percentage of the company. This investment immediately introduces mis-aligned incentives that will, in the long run, not align well with building out the best user experience.

Also, if the company ever does become successful, it will take a very long time for anyone involved to realize any of the value, often leading to years of work without any real return on investment.

Imagine, instead, that a new and exciting project is announced that solves a real problem. Anyone can participate in building it or investing in it from day one. The company announces the release of x number of tokens, and give 10% to the early builders, put 10% for sale to the public, and set the rest aside for future payment of contributors and funding of the project.

Stakeholders can use their tokens to vote on changes to the future of the project, and the people who helped build the project can sell some of their holdings to make money after the tokens have been released.

People who believe in the project can buy and hold ownership, and people who think the project is headed in the wrong direction can signal this by selling their stake.

Because blockchain data is all completely public and open, purchasers have complete transparency over what is happening. This is in contrast to buying equity in private or centralized businesses where many things are often cloaked in secrecy.

This is already happening in the web3 space.

One example is the app Radicle (a decentralized GitHub alternative) which allows stakeholders to participate in the governance of their project. Gitcoin is another that allows developers to get paid in cryptocurrency for jumping in and working on Open Source issues. Yearn allows stakeholders to participate in decision making and voting on proposals. UniswapSuperRareThe GraphAudius, and countless other protocols and projects have issued tokens as a way to enable ownership, participation, and governance.

DAOs (Decentralized Autonomous Organizations), which offer an alternative way to build what we traditionally thought of as a company, are gaining tremendous momentum and investment from both traditional developers and venture capital firms.

These types of organizations are tokenized and turn the idea of organizational structure on its head, offering real, liquid, and equitable ownership to larger portions of stakeholders and aligning incentives in new and interesting ways.

For example, Friends with Benefits is a DAO of web3 builders and artists, is about a year old, has a market cap of around $125 million as of this writing, and recently received a $10 million round of investment from a16z.

DAOs could encompass an entire post in and of themselves, but for now I’ll just say that I think that they are the future of building products and (what we in the past thought of as) companies. Here is a good post outlining the current DAO landscape.

How Identity Works in Web3

In web3, Identity also works much differently than what we are used to today. Most of the time in web3 apps, identities will be tied to the wallet address of the user interacting with the application.

Unlike web2 authentication methods like OAuth or email + password (that almost always require users to hand over sensitive and personal information), wallet addresses are completely anonymous unless the user decides to tie their own identity to it publicly.

If the user chooses to use the same wallet across multiple dapps, their identity is also seamlessly transferable across apps, which lets them build up their reputation over time.

Protocols and tools like Ceramic and IDX already allow developers to build self-sovereign identity into their applications to replace traditional authentication and identity layers. The Ethereum foundation also has a working RFP for defining a specification for “Sign in with Ethereum” which would help provide a more streamlined and documented way to do this going forward. This is also a good thread that outlines some of the ways that this would enhance traditional authentication flows.

How to Build on Web3

I’m a developer who recently transitioned into the web3 space from a traditional development background. So I wanted to start building to get a sense of what the development experience felt like. And I wanted to get an understanding of the types of apps that we can build today.

I dove right in and decided to document some of the things I was doing in a couple of blog posts.

How to Get Into Ethereum, Crypto, and Web3 as a Developer – This is an introduction to the space in general, coming from a developer, for developers looking to break into the industry.

The Complete Guide to Full Stack Ethereum Development – This is a tutorial that teaches you how to build out your first dapp.

The Complete Guide to Full Stack Solana Development with React, Anchor, Rust, and Phantom – This guide dives into Solana to show you how to build a full stack dapp.

If you are interested in learning more about web3 in general, you can check out these posts:

The New Creator Economy – DAOs, Community Ownership, and Cryptoeconomics

The Value Chain of the Open Metaverse

The Rise of Micro-Economies

This startup is building a web3-friendly app store for developers

Rita Liao@ritacyliao / 2:32 AM GMT+5:30•October 12, 2022 Comment

magic square

Image Credits: Magic Square

Apple’s 30% tech tax on developers has not just antagonized consumer tech giants like Epic Games and Spotify but is also turning web3 startups against it. Major NFT marketplaces OpenSea and Magic Eden noticeably only let users browse listings on their iPhone apps without enabling trading to avoid the steep fees. But doing so bars the one billion iPhone users from easily accessing a new breed of decentralized apps, while web3’s current challenge is to drive mass adoption.

A nascent startup hopes to solve the app store problem for web3. Founded last year, Magic Square is building an app store that lets developers list projects that are vetted by the community. And its initial traction — 250,000 have signed up to test its upcoming beta version — has helped it attract investor attention.

Magic Square’s valuation jumped to $75 million after recently raising an additional $1 million, up from the $30 million price tag of its $3 million seed round led by Binance and Republic that was closed in July. The startup is now seeking to raise $4.4 million at a $120 million valuation, CEO Andrey Nayman told TechCrunch.

https://jac.yahoosandbox.com/1.3.0-rc.1/safeframe.html

Crypto.com Capital, the VC arm of the namesake crypto exchange, has joined as a strategic investor and will leverage the large pool of projects listed on the exchange to help Magic Square onboard more developers.

The startup wants to make marketing cheaper for crypto startups, which are currently throwing tens of thousands of dollars at influencer endorsement without knowing for sure that will lead to new users, or they launch an airdrop but end up attracting speculators rather than real users.

As such, Magic Square has designed a marketplace for affiliate marketing — a concept that has existed since the dawn of the internet — where developers set the price of how much they pay for each user acquired. In turn, marketers claim the tasks and work on helping these apps drive users. That’s also how the startup generates revenues. Instead of a tax on in-app purchases, it takes a 10% cut from the developers’ campaign budget.

Buoyed with fresh proceeds, Magic Square plans to add headcount to its team of 40 employees spread across the world and focus on product development for its affiliate marketing program.

https://buy.tinypass.com/checkout/template/cacheableShow?aid=Fy7FpgyUxA&templateId=OTOB0H38YGQ3&templateVariantId=OTVDCUPGUMC7T&offerId=fakeOfferId&experienceId=EXC78P3VUPI4&iframeId=offer_14bf150a619d1caf9a21-1&displayMode=inline&widget=template&url=https%3A%2F%2Ftechcrunch.com

User protection

With the explosion of blockchain apps and crypto scams, having some kind of gatekeeper could offer a layer of protection to consumers. Despite the heavy tax they charge, Apple and Google at least work to root out illegal or suspicious apps — even though the mission sometimes falls short.

https://jac.yahoosandbox.com/1.3.0-rc.1/safeframe.html

“There are currently around 10,000 dApps out there, but if I talk about production-ready applications, it’s like 2,150 apps,” says Nayman, who was previously an investor at a major Israeli hedge fund.

“If you are a crypto-savvy user, you know where to look. You know to check the white paper, the audit reports, the LinkedIn of the founders — the nuances that need to be checked in order to decide whether this is a project that you want to be involved or not with. But if you are not, you have no idea where to start.”

There’s a seeming paradox in building a user-friendly decentralized product because accessibility and speed often rely on centralized data centers. But as some web3 experts increasingly argue, it’s the degree and type of decentralization that matters.

In Magic Square’s case, decision-making for app publishing is kept in the decentralized realm. Its store depends on a group of validators to screen apps, a process that happens through a decentralized autonomous organization, or DAO, with an incentive mechanism to keep participants accountable and active. The app store is in the process of transitioning from Solana to Binance Chain.

Validators are the ones who eventually decide what gets to be on Magic Square, and they do so by vetting projects by three criteria — content, security and user experience — not unlike traditional app store inspection. Each app goes through 250 randomly picked, independent validators, including 50 “qualified” ones who are technically advanced and 200 “standard” ones who can be anyone from the community.

Validators are doing it for financial returns. Whether their app ends up passing the test, developers need to pay validators in Magic Square’s tokens to audit their apps. The store also encourages app users to leave reviews by rewarding them with points that can be converted into tokens, a structure that Neyman compares to the vastly popular — though sometimes fraught — play-to-earn business model used in GameFi.

“Instead of playing, they just can use the same application that they’re using in their daily lives,” says the CEO.

The future of the internet is changing fast and no one knows what’s ahead. The 8th revolutionary change happening in the world of technology is the development of Web 3.0 and its applications, which will completely transform the way we use our computers. “It can be said without a shadow of doubt that the new paradigm of web 3.0 is software-defined.” As many people are becoming more aware of how we consume and interact with the internet, we are seeing a shift in the way people create, distribute and utilize apps and websites. This shift is taking place thanks to Web 3.0 which has a variety of apps and technologies at its disposal.

The article starts with a basic definition of the term itself and then goes into detail about how it integrates with the major technologies you use every day.

What is Web 3.0?

Web 3.0 is a term that has been coined to describe a time where the decentralized web will take over. According to economist Steven Forbes, Web 3.0 is “already happening and this is an unprecedented era of human innovation”. There are many new technologies emerging in the web world that are being backed by smart contracts, like IPFS and blockchain technologies. Web 3.0 is the next generation of the World Wide Web. It’s a broad term that encompasses all the different types of technologies that are being developed to take advantage of the power of blockchain. Some examples include decentralized computing, decentralized storage, and new identity management protocols.

Web 3.0 is a term to describe the changes that have occurred in our society with the advent of the internet and technology as we’ve known it. We’re living in a time when companies are sharing an ever-increasing number of services with their customers and they need support to meet those expectations. The company’s mission is to create sustainable long-term relationships between businesses and their customers through an easy, affordable and productive platform that gives anyone access to unlimited information. It is different than past versions because it is decentralized, doesn’t require a server to function, and uses blockchain as its foundation.

Web 3 Apps Examples To Watch For

Web 3 is the third era in which people interact with the Web. Check out these examples of Web 3 apps to explore the possibilities you might find yourself interacting with in the world of pre-Web 3 apps:

Sapien

The Sapien web 3 app is a decentralized social network and the first-ever tool to be released on the new, blockchain-based platform. It will allow users to create their own applications with no requirement for payment or ads. Sapien is a web app platform that allows users to create their own decentralized applications using the Ethereum blockchain. Sapien’s platform provides the tools for their users to build and deploy apps in a few steps. Sapien is a web 3 platform that offers blockchain-based apps, services and technologies. It allows people to communicate, transact, share information and build communities through a set of self-sovereign tools. Sapien web 3 was created to offer everyone a way to organize their online life for free.

Storj

Storj is a decentralized storage solution that provides users with a way to store their data in an encrypted, redundant, and fault-tolerant manner. It uses the blockchain technology and offers many of the same benefits as cloud storage but using a distributed network. One of Storj’s advantages is that it allows for uploading and downloading at any time without restriction. Storj allows users to choose an expiration date for their data, making it “self-destructing” in a sense. While this may be a relatively new technology, there are already some big names in the company such as Dropbox and Comcast who have partnered with Storj on integrating its solution.

Everledger

Everledger is a company that uses blockchain to track items through their life cycles. This company tracks diamonds, wine, gold, and other belongings. From the time they log the item in until they log it out of the world’s supply chain, Everledger keeps track of where and how the item was used. Everledger allows consumers to securely verify their purchases by scanning the Everledger’s sticker. This is a big step for online security as it protects against fraud without any complicated passwords or other personal information. The company also has a patent pending on an RFID chip that will allow users to access items through an app, which would be really helpful for people who often lose their keys or smartphones.

Akasha

With akasha on the blockchain, we can finally have a social network where users can create profiles, share content, build communities and even make money. There are no ads or dubious content in this platform. The akasha social network is the next step in the evolution of social media technologies. Unlike traditional social networks, which have a limited number of users, the akasha is an open platform for communities to connect with each other and share information. Users can share their thoughts, ideas and experiences in a way that keeps them within an individual community or group. The benefits of this are numerous as it creates engagement within communities and allows for user-generated content.

Ethlance

A job market that came about because of the blockchain technology, ethlance is an online platform that allows people to apply for jobs. The platform connects candidates to potential employers who will complete the process of finding a qualified applicant. It also provides freelancers with opportunities they might not have had before and removes barriers between employers and freelancers. Ethlance is a decentralized app for employers and for freelancers. It is the first decentralized talent marketplace that helps professionals reduce their costs and increase their profits. Freelancers can enjoy 100% ownership of their work, while artists and content creators can earn more than anywhere else. All payments are made in ETH, which makes it easy to connect with clients on a global scale.

Brave

Brave Browser is a new browser which promised to bring ad-blocker and privacy features that were previously only available on the desktop. Developed by the Mozilla Foundation, Brave Browser is a faster, safer alternative to mainstream browsers. Because of its security, it has been called “the most secure browser ever made.” The Brave Browser is a new open source browser that blocks intrusive advertising and trackers and promises to protect the user’s privacy using blockchain technology. It also has built-in cryptojacking protection, so users can support their favorite websites without running up their data plan.

Livepeer

LivePeer is an app that allows two people to communicate in real-time. It also lets people watch streaming video and record screencasts of their computer screen, which they will be able to save as a GIF or download as a video file. LivePeer is a decentralized, peer-to peer video streaming platform that runs on an Ethereum powered blockchain. LivePeer lets you broadcast live streaming video directly from your mobile phone to the platform, which provides multiple benefits for these apps. The first benefit is that it gives you a chance to charge more by selling the advertising space in your stream.

The Final Words

Web 3 is an ambitious project to rebuild the internet from scratch. Web 3 applications will be interoperable and decentralized, meaning that there won’t be a single company or entity in control of what you do online. It is a set of new technologies that has been made possible due to the introduction of blockchain technology. The web 3 aims to move away from centralized servers by decentralizing the web and its data through various technologies such as DApps, IPFS, and sidechains. These apps can be found in gaming, betting, advertising, social media, messaging, dating, finance and logistics among many others.

WEB3 USE CASES AND APPLICATIONS

Talk to our Consultant

Metaverse telegram social icon
Web3-use-cases

Expansion of the web and constant evolution in its infrastructure is essential to make web technologies more accessible for users, enabling digital transformation. Originally, Web1 offered us static websites and text-based web pages to provide information to the users and web 1.0 had no focus on user-based input. Hence, this web version is widely known as the “read-only” web.

As the next iteration of the web, web 2.0 was created, which refers to the version of the web (internet infrastructure) we currently use. It can be open, easy to use and interoperable with various services, systems and software products. Web 2.0 entails a web version consisting of web and social media applications.

Now, we are moving towards the next iteration of the internet- web3, the decentralized web infrastructure, which has caused a revolution in the internet world. However, the core concept of web3 is still unclear to many people. Also, businesses have started to search the practical use cases of web3 to leverage its full potential for business transformation. So, let’s discuss the use cases and applications of web3 in the next section.

What is Web3?

Web3 represents the “next-iteration” of the internet- the evolution of web 1 (HTML-based static websites) and web 2 (dynamic, user-generated web). Web3 is still an evolving concept as many changes are ongoing on its horizon. Also, people are often confused while differentiating between web3 and web 3.0. Hence, let’s briefly discuss these two concepts.

Web 3.0- The semantic web

Web 3.0 refers to a semantic web; the word “semantic” defines a study of unique language and logic. Tim Berners, the world wide web inventor, coined the idea of web 3.0 as the internet capable of reading and processing data without any human intervention.

Web3- The decentralized web

Ethereum’s co-founder, Gavin Wood, coined the concept to stop the dominance of a centralized web where tech giants like Facebook, Twitter and Google have the authority to collect and access users’ data. Web3 is powered by technologies and concepts such as blockchain, self-sovereign identity and decentralized storage system, transforming the traditional concept of data ownership and giving the authority to the users.

Architecture of Web3

Web3 represents a serverless internet architecture, generally called a decentralized web, that strives to provide data access and management rights to the users rather than any centralized entity. Web3’s architecture has five core layers, from layer 0 to layer 4. Let’s decode these layers.

Layer 0
  • Peer-to-peer network protocols like Devp2p, Libp2p
  • Platform neutral computation languages like WASM, EVM, and UTXO
Layer 1
  • Decentralized data storage and distribution protocols.
  • Example- IPFS, Bluzelle, Fluence, Swarm
  • Trustless web3 interaction platforms.
  • Example- Polkadot
  • Trustless interaction protocols.
  • Example- Ethereum, Bitcoin, Zcash, Polkadot parachains
  • Decentralized data messaging platforms.
  • Example- Whisper, Matrix
Layer 2
  • Layer-2 protocols
  • Example- Bitcoin Lightning Network and the Ethereum Plasma.
Layer 3
  • Developer languages and APIs
  • Example- Web3.js, ether.js, oo7.js, Solidity, Rust
Layer 4
  • User- interface Frameworks
  • Example- Status, Metamask, MyCrypto, Parity

Comprehensive development services to help you lead the future-ready Web3 Development projects.

Launch your Web3 project with LeewayHertz

Learn More

How does Web2 differ from Web3?

Aspect of comparisonWeb2Web3
Data ownershipCentralized entities own and verify the data.Users (nodes) own and verify the data
Mode of accessCredentials like username, email and password are required.The wallet address is required.
Computation CostRequires high computational resources as multiple third-party entities are involved.Requires low computational resources compared to centralized systems.
StructureRepresents a centralized infrastructure where participants are connected to an authority.Represents a decentralized infrastructure, consisting of node and networks that are resposible for data validation.
ParticipationCentralized authority approves the participants.Participants are free to join the network.
CenshorshipYes, since intermediaries are involvedNo censhorship
Single point of failureChances for a single point of failure resulting from easy entry to malicious participants.No room for single point of failure since the network is decentralized.
EfficiencyLower performanceHigher performance

What are the main features of Web3?

Web3 is a future-ready innovation driven by top technologies such as blockchain, machine learning, artificial intelligence, virtual reality and augmented reality. While web3 provides many benefits over web2, it has the following main features that can transform the current state of the web.

Decentralized

Web3 represents a decentralized ecosystem powered by blockchain technology. Applications and solutions built on the web3 ecosystem are truly decentralized with features integrated like enhanced security, functionality, no censorship and data authenticity.

Semantic web

Semantic web refers to the web3’s ability to make internet data machine-readable. The idea of a semantic web further strives to enable cross-chain data sharing across diverse applications and enterprises. This way, the semantic web seamlessly distributes the content, user data and associated information.

Metaverse capabilities

The web3 ecosystem supports hyper-realistic 3D spaces and graphical interfaces, helping your Web 3.0 project offer a more natural and vivid navigation user experience. Leveraging Web 3.0’s metaverse and 3D capabilities, we design immersive games, e-commerce shops and NFT marketplaces based on enterprise demand.

Robust data management

Web3 sits on top of a different infrastructure for data management that utilizes powerful technologies like blockchain and distributed peer-to-peer networks. Businesses need to adopt a new approach to data handling and processing, corresponding to the attributes of the open, transparent and distributed nature of the web3 ecosystem.

Connectivity

Lack of connectivity is one of the major issues in web 2. Powered by semantic metadata technology, web3 provides the users with a next-level data connectivity experience. Users can simultaneously connect to various data sources and access the data. Also, web3 aims to make the internet highly accessible to everyone by introducing revolutionary IoT sensor-based devices, delimiting the access of the internet to smartphones and computers.

What are the existing and future use cases of Web3?

Web 3 Use Cases and Applications

Metaverse and metaspaces

Metaverse is a virtual reality-based world that aims to merge the physical and the virtual world. While metaverse projects can be centralized or decentralized, based on web2, decentralized metaverse projects align with the need of the future. The metaverse projects can leverage the web3 ecosystem and its connectivity attributes to provide the users with an enhanced decentralized experience. Web3 further empowers the metaverse with technologies like IoT and artificial intelligence, enabling realism inside the metaverse.

Next-gen dApps

Decentralized applications use blockchain technology and are not owned and controlled by any centralized entity. Web3 supports development that is advanced both in terms of features and usability. Web3 dApps can range from gaming, DeFi, NFT and metaverse. dApps designed for web3 projects are truly decentralized and interoperable. However, dApps for the blockchain ecosystem do not necessarily need to be interoperable unless the project demands so.

Decentralized finance

As one of the top use cases of web3, DeFi leverages web3 attributes to improve its existing infrastructure and associated capabilities. Enterprises can combine the DeFi technology with the open and powerful web3 ecosystem to build futuristic DeFi solutions and applications and put them to use. Web3 brings many benefits to DeFi, including access to an open source ecosystem, lower transaction fees, efficient transaction processing and more transparent and automated governance.

Advanced Gaming

Web3 games represent the advanced version of blockchain-based games like play-to-earn, NFT, and play-to-own games. These web3 games use technologies such as blockchain, NFTs and underlying gaming infrastructure, contributing to the development of next-generation games that allows players to own, trade and create in-game assets to generate income from the game. Axie Infinity and Decentraland are the perfect examples of web3 games that have sparked high adoption across the player community. With changes in the web3 ecosystem, web3 games will also undergo considerable changes in the future.

Privacy & Data Management

Blockchain is arguably the most prominent technology with the vision to decentralize the future. However, “complete transparency” sometimes causes concern among users related to privacy. Web3 enables blockchain infrastructure to implement innovative concepts like cryptography and zero-knowledge proof to exercise complete secrecy for enhanced privacy in decentralized digital infrastructures.

Social media

Web3 empowers a new era of social media networks that emphasize the creator-driven economy with a core interest in providing content ownership to the users instead of any centralized entity. Web3 social media applications will introduce the next iteration of today’s social media apps like Facebook, Instagram and Snapchat, requiring users to submit their data to an authorized entity. As a significant change, web3 apps enable anonymous access to the users via wallet address and private key.

Virtual Real-Estate

The real estate industry has already transformed considerably with the advent of NFTs, blockchain and metaverse. Now with web3 providing a more robust and wide ecosystem for real estate, a range of “modern” web3 real-estate projects have been developed that use NFTs, virtual reality and 3D technology to verify ownership and transfer NFT-based real estate properties. Moreover, the transaction is recorded in the immutable and transparent ledger in the blockchain.

Remote workplaces

Since web3 supports the development of high-end metaverse projects, companies are using web3 technologies to build 3D realistic workplaces that transform their physical workplaces, allow employees’ avatars to work inside the virtual workplaces, interact with their colleagues and engage in fun activities just like the real workplaces.

Advance NFT use cases

NFTs are an essential tool used in the blockchain. NFTs have plenty of use cases on the web3 ecosystem, like incentivizing the audience, granting people digital ownership, and recording immutable data on the blockchain. However, businesses have started raising money by tokenizing their companies, offering exclusivity and ownership on the blockchain, or starting a DAO community (a decentralized autonomous organization or an online community owned by its members).

Comprehensive development services to help you lead the future-ready Web3 Development projects.

Launch your Web3 project with LeewayHertz

Learn More

Blockchain application- Polkadot

Polkadot is a decentralized web3 blockchain project designed to achieve the multichain vision for the decentralized web. With features like true interoperability, parachains, parathreads, high energy efficiency and user-driven governance, Polkadot stands apart from the rest of the third-generation advanced blockchains. Polkadot’s ecosystem facilitates the development of innovative dApps and solutions that can seamlessly support diverse web3 projects.

Gaming application- Axie Infinity

Axie Infinity is a new-age web3 gaming platform that implements a play-to-earn model, allowing the players to play, earn and trade NFTs-based game assets like weapons, skin, vehicles, etc., and collectibles. To access the Axie Infinity platform, users must complete a multi-step process, which includes setting up an Axie Infinity account and connecting the wallet.

DeFi application- Uniswap

Uniswap is a web3 DeFi exchange protocol that uses an open and decentralized network protocol to provide ownership completely to the users instead of a single entity. Developers, traders, and liquidity providers participate together in a financial marketplace that is open and accessible to all.

Conclusion

Web3 is a futuristic concept, but it’s in the development stages and yet to become mature. Many industries have started implementing web3 use cases to revamp their business infrastructure and shift to the web3 infrastructure. DAOs and metaverse are the two main examples of web3 use cases that are helping organizations to unlock the true potential of their business. With time and growing technological evolution, new use web3 use cases will land on the horizon to resolve existing inefficiencies of the business.

Please connect with us to hire web3 development or to migrate your existing project to the web3 ecosystem. We are ready to discuss your project requirements.

Become a Solana Developer!

Be among the first developers to make the jump to Web3 and shape the future of the internet!

📚  Take our intro course FREE!

👨‍🏫  Learn from experienced mentors 

💰 Earn rewards and credentials 

💻  Master in-demand blockchain skills

Why web3?

Web3 is the next evolution of the internet with limitless potential and opportunities for programmers.

It is in demand: There is a growing demand for Web3 developers as the world shifts from traditional web applications to decentralized ones. 

It makes a difference: By building decentralized applications, you can help create a more fair and equitable internet. 

It rewards creators: Building on Web3 can be financially rewarding, as you can make profit from your contributions.

Metaverse 3e17c758 sep 08 2022 17 09 52

About Metacrafters

Metacrafters invites crafters to a world of wonder, growth, and possibility where developers can access a world-class Web3 education with immediate earning and employment opportunities in the metaverse. 

It bridges education and an immersive gaming experience that brings the history and lore of blockchain to life.

Alif Vasaya provides expertise in business strategy, community growth hacking, content production, content strategy, digital ads through acquisitions, raising capital, monetizing the Metaverse, NFT affiliate marketing, consulting, and marketing advising for start-up companies.Highly skilled and results-oriented professional with solid academic preparation holding a bachelor's degree in arts and extensive experience in digital marketing, content production, business transformation, and human resource. Proven ability to assess and manage complex obstacles; viewed as a decisive troubleshooter. Successful in intense and demanding environments, providing strong team leadership and structure with a track record of motivating and developing soldiers.

LEAVE A REPLY

Please enter your comment!
Please enter your name here