The development of the crypto industry is progressing rapidly. More and more companies are entering the sector and developing exciting new technologies for users around the world. Discussions about whether cryptocurrencies will last are quite common in media, news, and in our daily lives. One might question the reason for the existence of cryptocurrencies and how they can improve our current internet model?
Cryptocurrencies are driving the new era of the internet known as Web3. Understanding how Web3 works and what benefits it can provide enables us to answer the above-posted question quite easily. But let’s be clear upfront: Web3 and cryptocurrencies are here to stay.
In this article, we explain how the web has evolved, why the current internet model urges for an update, and why crypto and Web3 are closely related.
Web 101 – the evolution of the internet
The web is a system that provides information to its users. This happens with the sharing of documents and other web resources that can be accessed via URLs, just like our website deip.world. Connecting these resources with each other results in a web of information. The first version of this web was Web1, followed by Web2 which is currently in use by most people in the world.
Web1 – simply read information, static behavior
The first version of the web connected users to the internet. It provided them with the consumption of information in a read-only fashion. There were no independent creators, but big corporations sharing information, no engagement, like, comment or share. It was meant to be a source of information that can be researched online, such as a simple telephone number, address of a company, or a basic marketing brochure in the digital space. There were approximately 250.000.000 websites online in the mid ninety’s. The number of global users was just 45 million people globally.
Web2 – read & write information, more dynamic
The term web 2.0 was introduced at the end of the 1990s and is understood as a further development of the term web 1.0. Web 2.0 encompasses a dynamic view of content and defines the internet as a communication platform rather than a static world. Customer integration and two-way communication define the understanding of web 2.0, leading to a higher level of user integration.
Closely related to this concept is the user-generated content in blogs, wikis, and sharing platforms. The development of applications such as YouTube or Facebook focused on user interaction with the internet. They provided the foundation for the development of the social web, e-commerce, and collective intelligence enabled by the sharing of information between people. From a technical perspective, web 2.0 is mostly managed via cloud computing and centralized server systems.
There were approximately 80,000,000 websites online in 2006. The number of worldwide users was at around 1 billion in the year 2006, showing the growth from web 1.0 to the evolution of the social web. As of January 2021, there were 4.66 billion active internet users worldwide according to Statista – that is 59.5 percent of the global population. Most users (92.6 percent) accessed the internet via mobile devices.
Why is a shift from Web2 to Web3 necessary?
There are many reasons why web 2.0 needs to evolve. Let’s start with the most important one: web 2.0 is highly centralized, which means that a very small number of companies have the power to own huge amounts of data and make money by analyzing and selling this user data. In addition, web 2.0 has lost a lot of trust due to the spread of fake news and deception in society, marketing, and politics, which today poses a threat to the world’s democracies.
Web3 – trusted read & write, data verification, immutability
Web3 aims at solving these problems by increasing transparency and ownership to gain back users’ trust and enable a democratic web that is governed by users instead of powerful tech giants. This can be achieved with distributed-ledger technology (applied blockchain) and its features such as verification and transparent, publicly available data storage.
“Web 3.0 enables a future where distributed users and machines are able to interact with data, value, and other counterparties via a substrate of peer-to-peer networks without the need for third parties. The result: a composable human-centric & privacy-preserving computing fabric for the next wave of the web.”(source: Fabric Ventures)
How does Web3 behave? 10 + 1 features that make you understand Web3 better
- ‘Open – transparent’ Web3 applications are built from open-source software and by an open and accessible community of developers. The technology used, code and progress can be tracked on for example GitHub. The community can actively participate and comment on tech decisions.
- ‘Trustless – no middleman – peer to peer’’ The network itself allows participants to interact publicly or privately without a trusted third party. This is enabled by distributed ledger technology, which makes middlemen obsolete and increases trust within the web.
- ‘Permissionless – access ability’ Anyone from around the globe and both, users and suppliers, can participate without authorization from a governing body. This means regardless of what country you are coming from and what your social background is, you can participate and access web 3.0 applications.
- ‘Distributed risk – edge computing’ As the functionality of the network does not rely on a central entity (server), the risk of downtime is distributed and close to zero within a decentral node-based network.
- ‘Data ownership’ No data extraction from global tech giants, that sell and analyze user data for profits. As the applications are governed decentrally, they offer services without user data collection.
- ‘Digital ownership’ Distributed ledger technologies enable new features like NFTs, that can represent ownership of assets in a digital space. Those assets could be art, music, video, written content, or even real estate. It enables creators a new business model with increased possibilities.
- ‘User responsibility’ With central parties coming up short, users enjoy much greater responsibility for their own assets and wealth, leading to greater knowledge and control. Personal assets cannot be used for shady actions by the central parties.
- ‘Decentral governance’ With increased responsibility there also comes greater power. Users can engage in decentral autonomous organizations (DAOs) to actively participate with votes for changes in the applications protocol. This enables user-driven development and governance.
- ‘Reduced dependency’ As global players like Facebook or Google lose their power and importance, the dependencies on them will decrease over time. This provides freedom of choice to users all around the globe while supporting smaller organizations with tailor-made solutions.
- ‘Shift value and earnings from central to decentral’ Back to a village-like economy, where people are empowered to manage and exchange their assets with each other in a peer-to-peer fashion. No big dependency on huge corporations, no data integrity issues.
“Where Web 2.0 was driven by the advent of mobile, social and cloud, Web3 is built largely on three new layers of technological innovation: edge computing, decentralized data networks, and artificial intelligence.“(source: Fabric Ventures)
The 3 most important technical implications of Web3 to take away:
- Artificial Intelligence The development of artificial intelligence got boosted by methods like natural language processing and neural links. This enables more efficient and complex communication between humans and machines. It supports the user experience within the web and makes interaction with higher engagement possible.
- Peer-to-peer network Edge computing drives decentralization and gives back power to the users, while at the same time being more efficient and less prone to downtime. A shift towards edges can support both, autonomy and computing power. In addition, it also serves as an opportunity for passive income.
- Distributed ledger technology and blockchain The features of DLT are increased trust and transparency within the web, as they serve as publicly distributed data storage. As data stored on a blockchain is immutable, it can be used as proof if something went wrong at any point in time. It also supports data integrity, as the technology is transaction-based and must not sell your personal data to gain profits.
Final words on the future of Web3
Cryptocurrencies will become more prevalent in our daily lives, as we’ve been experiencing an outstanding year for the whole crypto industry. Understanding that Web3 goes far beyond cryptocurrencies enables a bigger picture. It becomes quite clear that there are many possibilities in the development of Web3 and the technology is still in its infant shoes and is currently being tested directly on the market. As more people become aware and educated within the Web3 space, they will drive public adoption and new use-cases that show the power of Web3, especially for the creator economy. If creators become more informed of their possibilities we will experience many new job opportunities and entrepreneurs that can be supported directly by the community in a peer-to-peer fashion.
DEIP is developing Web3 protocol, tools, and applications for the creator economy. Stay tuned for updates and learn how to get involved by following DEIP.