It’s impossible to not get involved in the Web3 blackhole, from WhatsApp chats to Twitter groups, if you are a tech enthusiast. Some of this has become a major topic for tech founders and they keep track of what’s happening in this space. Several have taken the plunge.
Web3 is the natural progression of cryptocurrency and other services operating on what’s known as the blockchain or distributed network.
What is Web 3.0, and why does it hold such a prominent position? Moneycontrol talked to experts in the field to find out what Web3 means for consumers.
What’s Web 3.0?
Let’s first understand the basics of services before we dive into it.
Online services have been a part of our daily lives since March 2020 when the pandemic began. Online services allow people to shop, order food, view movies, and even purchase medicines. Cloud computing is where most online services, such as shopping, email and social media, are hosted. It’s a service that allows remote data storage and processing and can be accessed via the internet. Cloud services are offered by Amazon Web Services and Google Cloud, Microsoft Azure, and other platforms.
This means that all information users share on these platforms is stored with the cloud provider that uses an online service. Web2 is the Internet’s version.
Web3 will be the next internet version, with services running on blockchain. This is how Tariq Wali (chief technology officer at Chingari), explained Web3, although he stated that comparing the cloud with blockchain was not the best way to explain it.
We could compare whether cloud platforms or on-premise infrastructure are the foundation of services in Web2, while in Web3, all services are built upon a blockchain.
The key difference is that the cloud is controlled by giants such as Amazon, Google and Microsoft, and on-premise is controlled by companies/organisations, and is centralised. Blockchain is a distributed data system that allows information to be shared across multiple networks.
Web3 is a decentralised internet running on a public blockchain that can also be used for cryptocurrency transactions.
Blockchain is based on smart contracts. These smart contracts are based on a variety of protocols. Solana, for example, has a different protocol than Ethereum. Before services can run on these protocols, they must be met.
This is a departure from the centralised internet, where companies like Meta (formerly Facebook), Google and Amazon own large amounts of user data and generate significant revenue.
What are some examples of Web3?
Web3 is built on cryptocurrency. To participate in it, one must transact crypto coins and tokens. Web3 can be used in many ways and is still evolving.
NFTs (or non-fungible tokens) are the best example of Web3’s universe. These tokens can be bought with crypto coins. These tokens may be JPEGs, but the sector is ready for action with the entry of Bollywood stars like Amitabh Bachchan and Salman Khan into the NFT market. Bachchan’s collection of NFT items was recently sold for $1 million. The platform is growing in popularity with more celebrities.
Why is important?
Web3’s importance can be understood by understanding the history of previous internet versions – Web1 & Web2, which covered the period between the 1990s and today.
Web1 began with static web pages. People were just starting to use the internet in the 1990s. At that time, there were many static web pages. There wasn’t much opportunity for interaction.
Web2 was born in 2000, and along with it Big Tech such as Google, Facebook and Amazon. This was the age of user-generated content. This is the section most people know.
Unknowingly or not, consumers create huge amounts of content or data every time they search, shop, upload videos, and photos. All of this data is stored on the servers of companies with which the users interact. Intermediaries are able to profit through advertising as custodians and managers of user data.
You can gauge the scale of data collection by these companies by their dominance in a market. Google holds over 90% of the search engine market share. Statcounter data shows that Facebook holds a 72 percent share of the social media market.
These companies see the number of users and time spent consuming content as the key growth metrics. The company will be able to collect more data if it spends more time creating content. This will help improve its AI algorithm as well as its advertising engine which is a key revenue stream.
This can lead to privacy and plagiarism issues. Web3 can help with some of these problems.
These are the problems Web3 will solve.
An Indian social media company’s AI executive based in Bengaluru said that plagiarism is rampant online. It is so simple to take original content and create a social following by copying it.
Facebook’s August 2021 report proved this. US tech reporter Casey Newton looked at the 19 most popular posts to find that only four of them were original and the rest were copied. Copying content is compensated much more than its creator.
The executive stated that plagiarism makes it more difficult for creators to be adequately compensated. Web3 could help with that problem. Blockchain’s transparent nature makes it easy to trace the source of content.
Pratham Prasoon (17-year-old Web3 developer) said that this would eliminate the need for intermediaries as a decentralised Web3 will be transparent and benefit creators directly.