Web3 Fundamentals
Written by Aaron Barker, MSc FinTech Student, UWE
There’s been much discussion and interest in Web3 as the next generation of the internet including how it may be able to drive forward financial inclusion. This article takes a brief look at what it means and how it might impact users.
What is Web1 and 2?
To understand what Web3 is, it is important to review and to understand what Web1 and Web2 are. Web1 goes back to the days when web pages were static and only allowed information to be taken from the site to the user. Web2 is what is mostly used now allowing information to go to and from a website, much like watching a video (from the site) and leaving a comment (to the site).
What is Web3?
Web3 is the concept of enabling a user’s ownership of the content they put on the web often with the use of blockchain technology and smart contracts. Due to a lack of privacy in Web2 content can be claimed by parties that are not the rightful owners. One of the goals of Web3 is to give ownership and control over our personal data that is uploaded to the web, so instead of being the product as is the case in many web2 sites, users will be the owners of their data and content and will at least be able to monetise their own data.
Companies in Web3 (DAOs)
Companies in Web3 might look vastly different to the ones we have today for the web. Companies that run websites today have CEOs and presidents/board members who will decide what changes are made to the platform. In a decentralised Web3 world, decisions might be made through the implementation of DAOs (Decentralised Autonomous Organizations) where the decisions are made by shareholders and run on a voting system (verified and recorded using blockchain for example).
Decentralised users in a Web3 world may be able to earn crypto tokens by validating transactions and reporting bugs. Additionally, these tokens could give them voting rights on the platform they are supporting.
Privacy in Web3
One of the goals of Web3 is privacy, this would mean that your digital identity cannot always be traced back to your real identity. In the case of what is viewed, purchased or downloaded, ISPs would still report illegal activity but the information would be useless to advertising companies, as they would not know who they would target and what with.
In summary, the premise is moving from Web1 (read) to Web2 (read/write) and now Web3 (read/write/own). We are still very much in the Web3’s early stages and it has far to grow however significant advantages could be gained by those who start adopting it now.