What is Web3?
Web3 is a term you’ll see mentioned a lot these days in the blockchain-related media. It is a term that has been around since 2014, when it was used to describe the protocols that would allow decentralization. In 2022 it describes an ecosystem of public blockchains, apps and more. If a friend who knows little about blockchain asked you what Web3 is, how would you explain it? Here are some answers you could give them.
Web3 is read-write-own
Web1 was read only, while Web2 is read-write. But Web3 is read-write-own, which means that the builders, operators, and users of a platform own a piece of what they use. The Bitcoin and Ethereum platforms are examples of this, where those who update the ledger are given BTC or ETH for keeping the network secure. Another example is that ownership might be given in the form of a token provided for a service, such as providing liquidity for a trade. The vision for Web3 is that participants of any network will be able to own a piece of the products and services that they use everyday.
Web3 offers a new identity layer
In Webs 1 and 2 there was no public and open-source identity layer. Facebook and Twitter have since monopolized that layer as closed-source applications. The Web3 approach is that you should own your own identity online and only reveal parts of that identity when you decide to. Moreover, the digital identity that you develop on a social network could be portable to other networks.
Web3 and personal data security
The stories of selling user data for profit are widespread. For example, if you’re on Facebook, even if you quit the service, the data is still tied to Meta’s servers. Web3 can be considered a reaction to the extractive relationship between users and platforms on the Internet today. Web3 is where users will always get to choose what to share, and what to keep private.
Web3 is a new model for the Internet
There is an emerging economy on the Internet of spaces where creators can earn money: Substack and OnlyFans are just two examples. These platforms allow members to earn money from their fans instead of relying on an ad-driven, attention-based monetization model. Web3 will allow a model where creators can earn tokens or NFTs as a part of the patron-artist relationship, plus artists will also have a direct line to their earliest supporters that can be used for mailing lists, entry pasess, and payment systems for artists to engage their fans no matter the platform they are using.
Web3 makes governance easier
DAOs or ‘decentralized autonomous organizations’ will be a big feature of Web3. A DAO is a community-led entity that uses Ethereum smart contracts to establish the foundational rules and execute the agreed upon decisions. They play a role in DeFi, but are not limited to it. Media organizations like Bankless and public funding entities like Gitcoin all utilize DAOs to coordinate, govern, and manage their financials.