Web3 represents a new Internet vision where transparency, security and user sovereignty are at the heart of concerns. What is Web3 based on? Will it really succeed in replacing Web2 and reducing the hegemony of giants like Google?
What is Web3
Web3, also known as the decentralized web, represents a new vision of the Internet that aims to overcome Web2’s limitations by using decentralized technologies like blockchain.
Unlike Web2, which is dominated by centralized entities like Google or Facebook, Web3 operates on distributed network nodes, meaning that data is not controlled by a single organization but spread across many computers worldwide.
Web3 gives users greater control over their data. Through encryption and blockchain technologies, users can manage, protect, and decide who can access their personal information. This autonomy reduces reliance on centralized services and strengthens data privacy.
Why are we trying to move away from Web2?
To better understand Web3, we must first distinguish it from Web2. This is the version of the Internet that we are all familiar with, generated by users and based on social networks.
We have been using it for many years. It is a centralized Internet dominated by web giants such as Google, Amazon, Apple, and many others. These giants offer their services in exchange for users’ personal data, which is used for commercial purposes.
A consequence of this system is that users must trust these companies to ensure the integrity of their entrusted data. However, frequent data leaks, hacks, identity theft and even data sale without consent are commonplace on Web 2.0.
This centralization has undoubtedly provided a robust infrastructure for the Web and allowed billions of individuals to access it. Still, these centralized entities can also unilaterally decide to censor what they do not like. Censorship is a potent tool for the silence of unpopular speech. Whether used to ensure a company’s interests or comply with government demands, it can lead to abuses.
Depending on a user’s behaviour or speech content, the companies managing these services have unilateral decision-making power; control is in their hands. Web2 is thus dominated by these centralized entities; freedom is, therefore, relative. These Web 2.0 giants, such as GAFA, to name just one, also collect astronomical amounts of data on their users. These companies then monetize this data for advertising campaigns and other practices to generate profits.
This is Web2’s business model and one of its fundamental problems. Indeed, users are not rewarded for sharing this valuable data. The only counterpart is the possibility of using services like Google or Facebook. This is a total abandonment of personal data control for the benefit of the web giants.
With the advent of blockchain technology, Web3 emerged. In contrast to Web2, this new Internet has the power to redistribute the cards.
What does Web3 really bring?
Web 3 for Content Creators
With Web 3, content creators can express themselves however they want without fearing being unilaterally censored, like on Twitter or YouTube.
Important clarification: A DAO can, however, decide collectively to censor an individual if it considers it necessary. This is fairer governance, and abuses of censorship are much rarer thanks to decentralization, except in the case of collusion between the participants of a DAO.
Another problem solved by Web 3 is the dependence of content creators on the centralized platforms they operate. This is particularly true in terms of remuneration since only a tiny portion of the revenue generated by a creator is paid to them, the rest being recovered by the platform.
On Web3, since there are no intermediaries, creators are directly connected to their audience and create for them while they can benefit from a much higher income for their contributions.
NFT platform OpenSea, for example, charges a 2.5% fee for every transaction made on the platform. Meta’s metaverse (a Web 2.0 application that attempts to resemble Web 3.0) charges a 47.5% commission on NFT sales.
Thus, creators migrating to Web 3.0 can benefit from a higher income than Web 2.0. This is particularly possible thanks to NFTs, the roles of which we will see in more detail in the next part.
Additionally, these decentralized networks don’t have algorithms, which creators on Web2 depend on, that govern how users see content. Ultimately, on Web 3.0, content creators actually own their audience and can be directly compensated by their audience’s actions.
Web3 social networks, more commonly called SocialFi (for Social Finance), may emerge in the near future, and many projects, such as Aave’s Lens Protocol, are working on them.
Web 3 and Non-Fungible Tokens (NFTs)
NFTs occupy a central place in Web 3.0. Indeed, through this technology, it is possible to own a digital asset whose provenance and authenticity can be traced since the NFT acts as a certificate of ownership, and transactions are visible on the blockchain.
Concretely, an NFT is an identifiable and unique digital unit stored on the blockchain. Thanks to the blockchain, the complete history of previous owners can be consulted transparently.
An NFT can also be sold or traded on the secondary market since the person holding it has ownership rights to it.
The applications of NFTs on Web 3 are extremely numerous. Some are very well-known, such as video games with in-game objects that can become digital assets or digital art. But others are less well-known, and yet these applications are the basis of Web 3’s foundation.
Digital Identity on Web 3.0
Digital identity control is crucial in Web3 in terms of decentralization and data privacy. Several approaches exist to this. While on Web2, Know Your Customer (KYC) procedures or Google, Facebook, and other accounts serve as digital identities owned by these companies, on Web3, it is possible to have your own digital identity thanks to NFTs. Take the example of Ethereum Name Service (ENS), an open-source protocol on the Ethereum blockchain that allows you to assign your digital identity to an Ethereum wallet.
Concretely, users can associate their Ethereum addresses, cryptographic hashes, or metadata with a name that takes the following form: vitalik.eth. This name, thus created, is an NFT and can be used as a username on Web3. Note that each .eth address is unique, of course, and it is possible to sell or buy them on the secondary market.
These NFTs can serve as a credential to access a service, the difference being that the user has full control, rights and ownership over their digital identity.
This involves freeing ourselves from centralized authentication systems through web giants or traditional email addresses and passwords.
Another approach, self-sovereign Identity (SSI), has emerged based on blockchain. SSI focuses on privacy and security interoperability, removing the need to trust personal information to a centralized entity and giving users complete control over what they share.
Finally, although at a very early stage at the time of writing, the solution brought by Souls and soulbound tokens (SBTs) will potentially help users regain control of their identities.
Artists can certify via this digital identity that an asset created comes from them, for example. Avoiding the proliferation of malicious accounts or bots is also a question.
The advantages are numerous: users become the sole masters of their data on Web3, which is no longer stored on centralized databases but on distributed networks.
Metaverses and Web 3
Metaverses are a new iteration of the Internet interface. They are immersive digital spaces with their own economy and shared in which users can interact.
However, this vision of the future, of immersive worlds in which we will spend a lot of time interacting with others, working, having fun, or even learning, is not yet concrete at the time of writing.
Metaverses have the potential to combine many technologies, such as augmented reality, virtual reality, video games, social networks, cryptocurrencies, and NFTs. This raises the question of data control and confidentiality. Many metaverses are under development, whether in The Sandbox, Decentraland, Otherside, or even the metaverse project of Meta (formerly Facebook).
Web 3.0 serves as a basis for metaverses to protect users and provide decentralized applications that integrate seamlessly with them. In contrast, metaverses can extend the vision of Web3 by developing virtual worlds where decentralized applications reign.
In this sense, both have a high potential for complementarity by putting users at the centre. However, the success of this model is not yet guaranteed. Metaverses such as those developed by centralized entities (Meta in particular) will probably keep the same data control scheme as on Web2 since it is one of their main financial resources.
What are the limits of Web 3?
The promises of Web 3.0 may seem exciting, but there are limitations despite the many benefits this new iteration of the Internet offers.
One of the first limitations concerns accessibility since it can be costly. Having a .eth address, for example, has a certain financial cost. At the same time, transactions on some blockchains can apply exorbitant gas fees, which, for the moment, remain inaccessible for populations in less developed countries.
Another limitation of Web 3.0 concerns the user experience. The technical barrier is still very high for the most novice users, so it is not yet possible for the average user to navigate Web3 without encountering technical difficulties.
The Web3 ecosystem is still very young and evolving very quickly. Therefore, it still relies heavily on centralized infrastructures like GitHub, Discord, Twitter, etc. Many companies are trying to offer a Web3 alternative to these infrastructures, but it can take time for one to establish itself as a viable alternative, and none have emerged as a truly effective and intuitive solution.
Another limitation of Web 3.0 is the difficulty of regulating activities. While some see this as a positive, it can also be a negative since it can intensify cybercrime and other abuses. However, these limitations should be tempered. They are real at the time of writing but may well diminish as Web3 evolves.
Indeed, thanks to layer two solutions, the evolution of blockchain scalability, the development of increasingly simple-to-use protocols, and even DAOs managed efficiently by their members, Web3 still has a solid potential to resolve these problems.
Conclusion on Web 3
Web 3’s vision of a new, decentralized Internet emphasising data control and privacy is gradually becoming a reality. We are still in the early stages. It is estimated that by 2022, there will be as many individuals with an Ethereum address as there were Internet users in 1995.
Many solutions attempting to replace Web2 entities have already been developed on Web3. While Amazon Web Services and Microsoft Azure reign for hosting websites on Web2, Web3 has alternatives such as InterPlanetary File System (IPFS) and Skynet.
Regarding data storage, Web3 offers solutions from Filecoin, Sia, or Storj instead of the traditional Google Drive and Dropbox. Internet browsers also have Web3 alternatives such as Brave or Opera Crypto Browser. Payments, of course, can be made via wallets like MetaMask or TrustWallet.
Finally, although Web3 seems to be an inevitable revolution, the transition from Web2 to Web3 will likely take place over a relatively long time scale: given the current trend, it is estimated that we could potentially reach 1 billion users on Web3 by 2031 (according to a16z).
One thing is certain: as this transition progresses, the way we interact with the Internet and other individuals will fundamentally change.
