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A decentralised web that caters to the next generation of the Internet, leveraging blockchain technology to create a more open and transparent web called Web3 is in the talks.
About Web3
- Web3 is built on top of existing Internet infrastructure and not in competition with previous versions of the web platform.
- It allows for the creation and exchange of digital assets, decentralised applications (dApps), and smart contracts in the blockchain system.
- Blockchain is a decentralised digital technology that is designed to securely store data in a way where hacking and compromising is not easy like on current mediums and variants of the Internet.
- It is best known for its use in cryptocurrencies like Bitcoin and Ethereum, where it is used to store and transfer digital currencies in a secure and transparent way.
Key features of Web3
Control over data:
- One of the key features of Web3 is that it provides users with greater control over their data and digital assets.
- Web3 allows for peer-to-peer transactions and interactions, which means that users are in control of their data and can choose whom they share it with.
Privacy and security:
Instead of relying on centralised intermediaries, it offers options and mediums for an individual to have more privacy and, more importantly, security of the content and transactions.
Decentralised applications and smart contracts:
- Another key feature of Web3 is the ability to create and use decentralised applications (dApps) and smart contracts.
- These dApps can be used for a variety of purposes, such as social media, finance, gaming, and more.
Web3 different from Web2
- Web2, also known as the centralised web, is the current version of the Internet.
- It is characterised by the dominance of large, centralised platforms such as Google, Facebook, and Amazon.
Main differences between Web2 and Web3 are:
- Web2 is centralised, meaning that data is stored on centralised servers owned and controlled by large corporations.
- In contrast, Web3 is decentralised, meaning that data is stored on a decentralised network of computers that are owned and controlled by the users themselves.
- Web2 relies heavily on intermediaries such as banks, social media platforms, and online marketplaces to facilitate transactions and interactions.
- Web3 enables peer-to-peer transactions and interactions, meaning that users can transact directly with one another without the need for intermediaries like banks, for example.
- In Web2, large corporations like Facebook and Google have significant control over user data and can monetise it in ways that users may not be comfortable with.
- In Web3, users can choose to share data only with those they trust.
- In Web2, users must trust intermediaries to keep their data and transactions secure.
- In Web3, users can trust the network itself to keep their data and transactions secure.
Challenges
- The current infrastructure of blockchain networks can only handle a limited number of transactions per second.
- While blockchain technology has been around for over a decade, it is still relatively unknown.
- Web3 is being built by a wide range of developers and organisations, each with their own unique vision for how the technology should be implemented.
- Technology requires a certain level of technical expertise to use and understand.
- This may be a barrier to adoption for some users who are not comfortable with technology or do not have the necessary technical knowledge.
Applications:
Cryptocurrencies:
- They are built on blockchain technology, which is a key component of Web3.
- These digital currencies enable secure, decentralised transactions without the need for intermediaries.
Decentralised Finance (DeFi):
- DeFi is a movement that aims to build a new financial system on top of the blockchain technology.
- DeFi applications enable users to borrow, lend, and trade cryptocurrencies without the need for traditional financial intermediaries.
User centric networks:
- Web3 is being used to create decentralised social networks like Mastodon, which are designed to be more user-centric.
- Web3 is also being used to develop decentralised identity verification systems
SOURCE: THE HINDU, THE ECONOMIC TIMES, PIB
