What The Heck Is Web 3?
First off, thank you for reading and as always, nothing you read or hear of my content is ever financial advice. It is simply content to help you think more about the ever changing landscape of finance/technology and where I believe we are headed in the future.
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This content is intended to provide a high level overview of concepts for beginnings looking to enter the space. If you are looking for more in-depth analysis regarding anything written below, I would strongly suggest creating a Twitter account and joining the Crypto Twitter space. Start by following a few of the same people that I do on @CryptoOnramp, or reach out to me via DM and I can suggest a few educational resources to dive deeper into the wide world of Web 3, crypto, and blockchains!
If you are new to crypto, you have probably noticed the phrase “Web 3” is thrown out a lot when describing why crypto is the future.
However, you might also have been like me and thought to yourself… what on earth does that mean and where was I for Web 1 and 2?
It’s important to know the lingo so that you can hold your own in conversations and develop a better understanding when researching diff areas in the space.
Let’s start with a brief history lesson:
WEB 1.0:
Web 1 is basically the first version of the internet that consisted of a relatively few number of people who created web pages and content to post facts, information, etc.
The social relationship of Web 1 was for a web page to post information without any way for the reader to interact or respond.
The intent of Web 1 was to introduce the technology of the internet as a means for people to be able to find information that was readily available within seconds anywhere on earth at the click of a couple of buttons.
To this day, many websites still exist in the Web 1 format, in which you will come across the website of a business that lists its services/menu, and a phone number or email address to contact if you are interested, without the ability to place an order or interact with the business through the website.
Web 1 filled a great purpose in helping people become comfortable using the internet, and not having to rely on the phone book/physical flyers/advertisements, or encyclopedias/newspapers to find information about businesses/current events/etc.
WEB 2.0:
Web 2 represented a shift in terms of how people interacted with the internet. If Web 1 was called the “read-only Web”, Web 2 is the “participation social Web”.
This internet gave birth to much more interactive ways of engagement through the web, from social media platforms to chatrooms to gaming to e-commerce to forums to online banking to podcasting, etc.
Instead of 1 person/business posting information for all others to read, Web 2 was a more social forum in which there could be 360 engagement and discussion. This allowed us to feel much more connected with others, regardless of physical distance.
The invention of cellphones also helped to speed up the technology of Web 2.
Today, most of the internet we know is Web 2, and is largely accessible on a small smartphone through apps such as Facebook, eBay, Spotify, YouTube, Whatsapp, etc.
Now that we are caught up to speed on Web 1 and 2, we arrive at the future… Web 3.
What is Web 3.0?
Web 3 can be summarized as a power shift from large, power, centralized corporations back to the consumer/individual. We go from being the product through data harvesting, to being in control of what we choose to disclose and what we want to keep private.
Simply put, Web 3 can be described in 4 words:
Decentralization. Permissionless. Trustless. Privacy.
Let’s dive into each of those words:
DECENTRALIZATION - Web 3 strives towards platforms and protocols that aren’t controlled by a small number of central actors, but rather open for all to own and govern. Not only does this increase transparency, it also decreases the ability for government intervention.
PERMISSIONLESS - As Web 3 is decentralized and not governed by a small number of central actors, the barrier to entry is very minimal and does not depend on the authority of another human. Anyone can interact with any protocol in the Web 3 space without consent of a corporation or individual. Truly for everyone!
TRUSTLESS - Web 3 creates an environment in which transactions between two parties can be performed without inherent trust between the parties. As platforms/protocols are governed by code (and not humans), less decision making and trust is required of the system in order to process transactions. Smart contracts governed by code and math determine whether you are able to transact or not, regardless of your family history, health, race, sexual orientation, etc. You will also have comfort that the other party to your transaction has passed all of the same criteria. Say goodbye to credit scores and profiling!
PRIVACY - Web 3 pushes towards sharing as little personal data as necessary to become a part of the ecosystem. Whereas creating an account on JP Morgan requires your name, email, address, social security number, employer information, etc, creating a banking account on Web 3 only requires that you have a unique identifier and funds within the account. A Web 3 cryptocurrency wallet requires 0 personal information to set up. In addition, with a lack of personal data comes the inability for social media platforms to sell your data to advertisers.
Why Is Web 3 Necessary?
Now that you know what Web 3 is, the next question is why is it necessary and soon to be the future of technology.
I will be the first to admit, Web 2 in its current form has been great to me. I am able to keep up with the lives of my friends through social media, order Uber Eats and get food delivered to my house, buy stuff I don’t need online, and go on Twitter to catch up on the latest breaking news.
However, Web 2 doesn’t work for a large subset of the population. As we’ve become quite politically polarizing in recent years, many people are being censored on various social media platforms for their opinions on politics, COVID, etc. Most of us believe our phones/electronic devices record what we say and sell our data. Many individuals do not have access to bank accounts or credit because of their family history, employment, gender, sexual orientation, etc. In some parts of the world, the government is able to censor what can and can’t be seen on the internet. It is becoming increasingly difficult to find truthful information and facts.
It is important to note, just because something currently works in your favour, doesn’t mean it is the way to go or that it will last forever. The goal is to create something that operates the exact same way regardless of which political party is in office, where you are in the world, how much money you have, what religious beliefs you hold, etc. Just like everything in life, while the current system may be in your favour now, there will come a time when it isn’t. Everything is cyclical.
Simply put, while Web 2 was a huge advancement to society and our way of life, its weaknesses are starting to show and hurt a significant portion of the population. Almost everyone has been affected one way or another by some type of limitation of Web 2, even if it’s as insignificant as being sent advertisements for a gadget you were discussing at dinner.
Web 3 helps to address many of these issues, and shift the power back to the individual.
In 3 simple words:
Web 1 - Read
Web 2 - Write
Web 3 - Own
This past decade, we willingly gave up privacy and control in exchange for convenience and social connection.
Now, it is time to take back what is ours.
Web 3 is the future.