Web3.0 and blockchain are ushering in a new era of digital interaction. The web is evolving into a new age. It is decentralized, uses blockchain technology, and has few laws. Some regard it as a digital revolution, while others regard it as a utopia. But what exactly is it? And how will this affect you?
With all of its future possibilities, web3.0, the new buzzword in the crypto sector, is highly dependent on blockchain technology to deliver on its future promises.
Therefore, we will appreciate what the web3.0 and cryptocurrency space have to offer more if we comprehend blockchain.
Blockchain: A Disruptive Technology
Explaining what Blockchain is, is not easy because the explanations oscillate between pure technicality and incomplete popularization. The Blockchain is undoubtedly a technology often qualified as a “disruptive technology” by 2 of its main effects: decentralization and disintermediation.
Beyond the pure innovation of the DLT “Distributed Ledger Technology”, the Blockchain is not just a breakthrough technology, it is the means that opens the way to a new digital economy driven by cryptocurrencies and the tokens of which we still only see the beginnings.
While the definition and uses of “algorithm” now seem to be understood by almost everyone, blockchain technology, which also uses algorithms, still often remains “mysterious” to understand.
What is certain is that Blockchain belongs to the “disruptive technologies” with regard to 2 major changes:
First – breaking point
The first Blockchain called “Bitcoin” unveiled to the public on January 3, 2009, is the culmination of a long paradigm shift in the way of thinking about “privacy and security assurance” because of the utilization of PCs and Internet organizations.
This idea of maximizing the protection of privacy through cryptography was carried by the Californian computer scientists who initiated “open source”.
It was through the Cypherpunks manifesto in 1993 that they arrived at the fact that the protection of privacy on the Internet should also go through the freedom to be able to “control one’s money”, thus giving birth to the Cryptocurrencies.
It was Satoshi Nakamoto, who revealed to the world the then revolutionary concept of a peer-to-peer electronic payment system.
Second: element of rupture
The Bitcoin Blockchain has enabled the development of a “peer-to-peer” data exchange and storage infrastructure without a trusted third party (bank), by eliminating intermediaries in accordance with its original project set out above.
Then appeared the second emblematic character of the ecosystem “Vitalik Buterin” who founded the second most important Blockchain (Ethereum) in this disruptive technology.
This Blockchain, launched on July 30, 2015, provided an integrated programming language and complete Turing, allowing the creation of contracts capable of coding state transition functions via DApps (Decentralized applications).
A DApp is a software application whose operation allows it to run simultaneously on one or more Blockchains. It is the exponential development of Dapps that has enabled the advent of decentralized finance (DeFi) through the development of various protocols.
Web 3.0 or web3 for short, would be the third era of the Web, which makes it workable for sites and apps to consult each other on the Internet through a program, by themselves.
Web1 is characterized by a strong decentralization with little interaction between Internet users. It primarily made use of fundamental internet technologies including IP, HTTP, URI, and static HTML web pages to facilitate the exchange of information. Users could rarely engage with the web; they could only absorb information.
Back then, there were no interactive websites or applications like Instagram, Facebook, Amazon, Google, etc.
Web2 is characterized by the emergence of social networks, with the domination of Gafa (Google, Apple, Facebook, Amazon) and a strong centralization of data.
Web3 tends to breathe new air and bring decentralization into the system again. But this time, it will be based on blockchain technology, which makes it possible to exchange financial assets in the form of digital tokens, and also data without going through a third party, such as Facebook or a banking establishment.
Web 3 plans to return data to users, where they will have wallets (digital, editor’s note) that will contain value (cryptocurrencies, tokens, NFTs, etc.) and everyone will be able to directly exchange this value with other parties.
Web3 thus strive to open up the data market and allow users to reclaim their data, with the possibility of directly monetizing their productions on the blockchain.
Tokenization is the process by which data is converted into a “token”.
Where does the notion of Web3 come from?
The Web3 was thought up by the Briton Gavin Wood, the co-founder of the famous cryptocurrency Ethereum, with Vitalik Buterin. The idea of Web3 actually germinated more or less at the same time as the establishment of Ethereum: its conception dates back to 2013 and it was in 2015 that the platform was launched.
Web3 now benefits from the support of an ad hoc foundation, founded and led by Gavin Wood, which is aptly called the Web3 Foundation. On its home page, it is announced that it is there to “fund the research and development teams that are building the foundations of the decentralized web.”
For several years, the Web3 project remained well below the radar, but in 2021 it aroused renewed interest from the media, and among Internet users, as well as investors and companies. The technologies and notions mobilized by Web3 are starting to be rather widespread now, thanks to the propagation of cryptocurrencies.
The Web3 philosophy
The project behind Web3 is to decentralize the net, using blockchain technology (or chain of blocks). This is a mechanism that is the basis of cryptocurrencies such as Ethereum, Bitcoin, and all the others.
It is the equivalent of a digital, public ledger where all cryptocurrency transactions are recorded and stored.
In a Web3 environment, what is built on it would not belong to anyone. The platforms and applications will not be owned by a central player, but by the users, who will gain their share of ownership by contributing to the development and maintenance of these services.
Retrieve the value captured by the GAFAM
The ideology behind the Web3 is to attack the current web, which is characterized by economic concentration in the hands of a handful of net giants – which can be summed up in broad strokes by the acronym GAFAM (Google, Amazon, Facebook, Apple, Microsoft, and sometimes a few others) – which public authorities have trouble regulating.
This growing monopoly has also given rise to a rather striking formulation to illustrate the monopoly of a few key players: the ” TriNet”, where Internet users would spend most of their time surfing between Google, Amazon, and Facebook, to the detriment of the rest from the net.
In short, Web3 would like to blast all that and find a (re)-fragmented net. By possessing tokens, one then has a certain amount of power — of decision.
Three key aspects of Web3.0 development
Talent is the key to success in Web3.0, and the crypto industry is full of potential. The founders of many leading crypto products were almost all born after 1990 – Ethereum founder Vitalik Buterin is 27, FTX founder Sam Bankman-Fried is 29, and OpenSea founders Devin Finzer is 31 while Alex Atallah is 29.
The crypto industry attracts a lot of talented and young people who see the potential in decentralized technologies.
The crypto industry has attracted the attention of many large venture capital organizations and funds that respond with financial support for promising projects. In addition to specialized funding institutions in the field of blockchain, many non-core companies and Brands have invested in the crypto industry.
Major market players understand that funding contributes to the development and success of Web3.0 projects. For example, crypto exchange Huobi recently announced that, despite the bear market, it has invested $6 billion in promising Web3.0 projects.
Bitcoin appeared in 2009. After 10 years of development, a wide audience has accepted the blockchain and started looking towards the Web 3.0 era.
So far, there is no consensus on what exactly is included in the concept of Web3.0 however, it covers a wide range of areas, including digital currency, smart contracts, blockchain technology, hardware infrastructure (VR, AR, data storage, sensors, etc.), NFTs, decentralized financial services (DeFi), metaverses, decentralized autonomous organizations (DAO) and lots more.
Pillars on which Web3.0 stands
Web3.0 and Cryptocurrency are inseparable. Crypto is the essence of Web3.0. Thanks to the digital currency, Web3 will get its own economic system. Many crypto exchanges hosted Web3.0 projects such as Decentraland (Mana) and Filecoin have been successfully listed on all major crypto exchanges.
2. Blockchain and smart contracts
Blockchain and smart contracts form the basis of Web3.0. All activities in the crypto industry are based on blockchain and smart contracts. Major players in the crypto market are actively involved in the creation and development of public networks.
The most famous Binance Smart Chain network has turned into a real ecosystem where you can not only transfer tokens with a low commission but even create games and decentralized applications.
Huobi, another major exchange, cemented its position last month as the lead investor in Cube Network, a public network that is also set to provide innovative infrastructure for Web3 and Metaverse projects.
“No to bureaucracy, yes to community voices” could be the motto of the Decentralized Autonomous Organizations (DAO). DAO is a form of Web3 society in which the coordination of activities between participants is carried out without centralized control, but using automatic algorithms.
The very concept of DAO is similar to cryptocurrency – it is a decentralized management system that will accumulate the votes of all members of the community, helping to jointly determine the future of the project.
DeFi provides liquidity to Web3, and those who participate in such an economy receive corresponding bonuses and income. DeFi projects are driving the crypto economy forward – using the efficiency and power of smart contracts – digital contracts running on the blockchain.
DeFi platforms create a space for lending, borrowing, trading, saving, and earning interest, without the usual bureaucracy. DeFi bridges the gap between the individual and those who run the world’s finances.
5. Metaverse and NFT
Since peaking in popularity in mid-2021, NFTs have been digital art collections for most, and the Metaverse has been a virtual playground. But there is a growing voice that NFTs and the metaverse will become important tools for digitally bringing the products we see and use in everyday life into the Web3.0 space.
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Simply put, the metaverse will become the place of our daily habitation, and all the things that surround us in the digital world will exist in the form of NFTs.
Listen to Mark explain a bit of it here.
6. Decentralized data storage
A truly decentralized internet requires uncensored and unrestricted storage systems, as well as IoT hardware networks to support computing and distribution power.
Unlike products like BitTorrent, which can only host certain content on local servers, InterPlanetary File System (IPFS) offers a new distributed system designed for file storage, allowing any node to store data.
At the same time, the industry has seen the rise of “distributed storage aggregators” such as Filebase and Pinata, which provide the interfaces, optimizations, and services needed for custom storage solutions.
The Web3.0 infrastructure has made a breakthrough. In the future, there will be even more opportunities in the field of Web3.0. Visionaries, companies, and developers who venture into this space will discover the true possibilities of Web3.0.
Relevance and Significance of Web3.0
Crypto enthusiasts in 2022 believe that Web3 is capable of fundamentally changing business processes and existing business models, shifting the focus to two key concepts: decentralization and a token-based economy (tokenomics).
Decentralization involves storing information on different servers, in order to achieve a stable and secure decentralized network, where network participants (developers) compete in providing high-quality services to everyone who uses the service.
Cryptocurrencies are an integral part of Web3 projects. The fact is that project tokens provide a financial incentive for those who want to take part in the creation, management, or improvement of the project.
People can earn by participating in the protocol in various ways, both at the technical and non-technical level – this is tokenomics.
The Web3 concept also aims to create more open, connected, and intelligent websites and web applications that focus on machine understanding of data.
Through the use of AI and advanced machine learning techniques, Web3 strives to provide more specific and relevant information in the shortest possible time.
Advantages Of Blockchain and Web3.0
Blockchain technology very quickly found its place and its use in the financial services ecosystem by allowing the emergence of Decentralized Finance (DeFi) protocols.
But beyond peer-to-peer payments and the development of financial products, Blockchain technology also allows the development of new systems that structure the most diverse social and economic interactions by no longer calling on intermediaries or middlemen.
It is now smart contracts that are used to formalize legal agreements that serve as commercial agreements. It is the Blockchain that now, through a decentralized register, keeps the accounts of all the information relating to the various transactions.
Blockchain technology in the history of mankind is undoubtedly one of the most important revolutions, along with the discovery of the printing press. It is a new way of interacting between people and systems that develops horizontally.
This double movement of horizontality and atomization of the relationship is completely unique in the economic history of humanity. Blockchain opens the era of the ability to provide fluidity, trust, and protection in transactions through a network of connected computers.
The cost of trust no longer depends on an authority external to the network which intervenes vertically.
With concepts like the Metaverse, blockchain, Web3, NFTs, or the seemingly endless variety of cryptocurrencies, it sometimes feels like tech enthusiasts are trying to uproot people’s ideas of the internet. In fact, some of these issues by themselves are enough to make some people immediately turn their heads.
There is a widespread belief that the internet is poised to experience enormous transformation. Issues such as data privacy, cybersecurity, or the power consolidated in a few technological giants are causing more and more concern among the people and among the rulers.
This is why Web3.0, crypto, and Blockchain technology are nothing more than a new organization of a decentralized Web organized and regulated by Cryptographia.