There has been significant buzz surrounding the world of cryptocurrency, NFTs and Defi, and many are starting to try and figure out what all these things mean. Of course, there’s a lot of hype around all these developments, but oftentimes it can be confusing to wrap your head around. All this jargon falls under the Web3 movement aiming to revamp how the internet is structured and used.
There are many skeptics of the Web3 movement, and rightfully so. Web3 has had its fair share of controversies, but that shouldn’t persuade you from learning more about it and its potential. If proponents of Web3 are right, it can truly change our online world. This is because Web3 aims to decouple our internet usage from the large corporations that host the sites we frequent, meaning that we can achieve a secure, safe and truly democratic internet that has the user’s best interests in mind, rather than profit-driven entities. In this article, we will be exploring how the Web3 movement aims to achieve these lofty goals, and what we can expect from it in the future.
How does Web3 even work, anyway?
Web3 operates on a network protocol called the blockchain. The Blockchain’s function is to facilitate transactions between different users through accounts, which are referred to as crypto wallets.
We are currently in the Web 2.0 phase of the internet, where the internet is controlled and monitored by a few large corporations that focus on the gathering of private data to sell for the use of advertising and search engine optimisations. Web3 aims to decouple users from this predatory form of the business model currently employed, and grant users greater freedom and privacy.
Transaction of cryptocurrency
Web3 facilitates these transactions through the usage of cryptocurrency, which are digital tokens that you can use to exchange for products and services online. The special thing about these tokens is that they are completely divorced from the control of governments, meaning that the value of the tokens is dependent on the market value of the token. Cryptocurrency is then used to conduct transactions, and these transactions are kept on a ‘ledger’. That means that every transaction is made public, but what’s important is that there is no way to link that transaction to an individual. Only the accounts are listed, if even that, meaning that the transactions made on the blockchain are simultaneously public and private at the same time.
This is great for those who feel wary about sharing their financial transactions with the services they use, be it surveillance from governments or from corporate entities. Transactions are also done peer-to-peer, meaning that there are no middlemen like banks who facilitate the movement of funds. This means that you have complete control over your funds, and transactions can occur from around the world almost instantaneously.
A decentralised ecosystem
Web3 differs from how Web 2.0 works in that the users who participate in the blockchain are also the ones who help to support the network. This means that control over the entire blockchain ecosystem is owned by nobody and everybody at the same time. This means that no one person can take advantage of the blockchain, and everyone is on the same playing field regardless of their capital or size.
Web3 aims to achieve this through the implementation of Decentralised Autonomous Organisations, or DAOs. These DAOs are run by all its members, and each person has equal voting power. Members can vote on the rules and operations of the DAO through the use of voting tokens, which are then tallied up by a computer algorithm that cannot be tampered with to alter results. This gives users the freedom to completely decide the way they wish to interact with that space of the internet, and all motivations and concerns are fairly weighted. This is what theft refers to when they espouse Web3’s ability to democratise the internet.
Security and privacy
As mentioned previously, Web 2.0 operates on the business model of selling user data and analytics to other entities who can profit through this information, mostly through the form of advertising or selling personalised products. Web 2.0 is inundated with algorithms all with the aim of selling products or services, and this requires a huge amount of personal data in order to accurately predict what would make you part ways with your money.
This large amount of information is stored in centralised servers, oftentimes by a few companies and entities. This leaves your information vulnerable to leaks and attacks, which can be disastrous. The information can be as mundane as your preferred cereals to something as potentially damaging as your credit card information, or your entire identity.
Web3 aims to protect your information by divorcing your information from the products and services your interact with, through the storage of your information in your crypto wallet. This means that the moment you log out of the online service, your information is removed from the database, meaning that it is kept safe and secure.
Why is this important?
Web3 is already being implemented into our lives, and this technology has changed our world. Traditional finance sectors, like venture capitalists and investors, are investing huge amounts of money into the technology to allow it to develop further. If Web3 becomes a larger facet of our world, cryptocurrency will change the way we conduct transactions online, or use services online.
It is also important to know the current issues Web3 is facing, especially if you’re thinking of taking part in the movement. Because of the anonymity of the blockchain, it has been used to conduct illegal activities which can’t be easily monitored by anyone.
Web3 has resulted in an exciting time for the internet, where we can see a new age of the internet emerge and provide a better internet that we can’t even foresee yet. It is still early days for the technology, and many are still rightly sceptical about the feasibility and ability of Web3 to deliver on the promises it makes. Nevertheless, it is important that everyone be aware of what this future could bring for us and how it operates so that they know how to leverage this new technology and be aware of Web3 being an alternative to our current Web 2.0 ecosystem that is becoming increasingly out of our control.