Web3 is talked about a lot. The term first appeared when Tim Berners-Lee who is the creator of the World Wide Web, spoke about it during the early internet era. He described it as a system where data becomes easy to access and share across applications. And he called it the Semantic Web.
In 2014, Gavin Wood who is a co-founder of Ethereum, redefined the term. He explained how blockchain technology could create a new way for people and systems to connect without full trust in one another. Wood didn’t focus on cryptocurrencies. He talked about protocols and tools, such as cryptography, that can build a more secure internet. He summed up Web3 as “Less trust, more truth.”
Today, Web3’s meaning has changed. Tech companies are adopting Web3 technology and in the future, it may change the internet.
Web3 Main Features
Web3 operates on a system of decentralized technologies like blockchains, smart contracts, oracles, digital wallets, and storage networks. They form the main parts of Web3.
Blockchains
A blockchain is a secure and decentralized system that stores data, records transactions, and allows people to exchange value without a central authority. Blockchains are the base of Web3. They allow transactions with crypto, smart contracts and decentralized services. They are the base for all Web3 activities.
Cryptocurrencies
Cryptocurrencies are digital tokensЕhey run on blockchains and allow to perform secure and decentralized transactions. These tokens are important for Web3 applications. They can be used for payments, investments, and governance.
In Web3, tokens are very advanced. They are programmable, can represent investments, pay for services, or provide access to governance in decentralized projects.
Smart Contracts and dApps
Smart contracts are programs on blockchains that execute transactions automatically when certain conditions are met. These contracts enable decentralized applications (dApps), and dApps are the tools and protocols that allow to use Web3.
dApps run on blockchain infrastructure and are decentralized. They are the base for decentralized finance (DeFi), play-to-earn games, and automated services.
Oracles
Oracles connect blockchains to real-world data and systems. This helps smart contracts to get information from external world. Oracles allow Web3 to get data (financial, etc.) in real-time mode.
For example, Chainlink oracles provide data and services for decentralized applications and establish communications between blockchains. They connect the traditional internet (Web2) and the decentralized Web3 ecosystem.
Oracles boost the Web3 potential because they allow for interoperability. Web3 can rely on then to create a new internet.
What Is Web3 in Cryptography?
Web3 is the next step for the internet. Its main aim is to give users control and privacy. It uses blockchain technology and cryptocurrencies to create a system that doesn’t rely on central authorities.
Cryptocurrencies are digital money that work on blockchain networks. They allow people to make secure, fast transactions without needing banks or middlemen. In Web3, you can use cryptocurrencies to buy, sell, invest, or pay for services.
Cryptography is what makes Web3 secure. It protects user data, keeps transactions safe, and ensures privacy. It uses encryption to scramble information so only the right person can read it. Digital signatures prove transactions are real and can’t be changed or faked.
In Web3, cryptography helps users trust the system. It keeps their money, identities, and personal data safe, while letting them interact freely in a decentralized digital world.
Web3 and Blockchain Relationship
Web3 uses blockchain technology as its foundation. Blockchain acts as the backbone of Web3, it creates a decentralized system where no single person or company has control. It secures secure transactions, keeps data safe, and enable smart contracts. Without blockchain, Web3 would not be possible.
Web3 vs. blockchain: what is the difference
Web3 and blockchain are connected but not the same. Blockchain is the technology that creates a secure and decentralized network. Web3 uses this technology to build a new type of internet. Blockchain focuses on managing data and transactions, while Web3 aims to develop apps, services, and tools that give users more privacy and control.
Examples of blockchain platforms that support Web3
Many blockchain platforms support Web3.
- Ethereum is one the first platforms that support Web3. Ethereum is famous for its smart contracts and decentralized apps (dApps).
- Polkadot is a network that links different blockchains. With it, it helps to create Web3 projects.
- Solana offers fast and cheap transactions which are perfect for Web3 projects like DeFi and gaming.
- Binance Smart Chain (BSC) is a blockchain designed for speed and efficiency, it supports Web3 tools and apps.
Web3 Key Technologies
Web3 can create a better internet with the help of some technologies. They are smart contracts, decentralized applications (dApps), and unique Web3 protocols and tools.
Smart Contracts
Smart contracts are computer programs that run on blockchains. They automatically execute agreements when specific conditions are met. For example, a smart contract releases payment when a service is completed.
In Web3, smart contracts allow people to make transactions and agreements directly. With it, they save time and guarantee fairness. These contracts are secure, tamper-proof, and transparent.
Decentralized Applications (dApps)
Decentralized applications, or dApps, are apps that run on blockchain networks. This means no single company or individual controls them.
dApps offer various services like finance, gaming, and social networking. They give users more control over their data and interactions. For example, in decentralized finance (DeFi) dApps, people can lend, borrow, or trade assets without banks.
Web3 Protocols and Tools
Web3 protocols and tools create the base for a decentralized internet. They include systems for managing identity, data storage, and communication. The most important of them are:
- IPFS (InterPlanetary File System): This is a system for storing and sharing files in a decentralized way.
- Chainlink: This is a tool that connects blockchain networks with real-world data.
- Polygon: This is a protocol that makes blockchain networks faster and cheaper to use.
These protocols and tools allow Web3 to function.
Web3 Applications and Use Cases
DeFi (Decentralized Finance) is an example of Web3. It lets people use financial services such as lending, borrowing, and trading without banks. Everything happens on the blockchain. It means that no intermediary is needed. People control their money and can even earn interest on it.
Social networks in Web3 let people interact without a need for a large company to run everything. These networks are decentralized which means that users control the content and the data. It is easier to own and manage personal information in these platforms compared to traditional ones.
Web3 Advantages and Challenges
Advantages:
- Privacy: In Web3, users control their personal information. They can choose what to share and with whom. It makes it more difficult for others to misuse their data.
- Transparency: Everything in Web3 happens on the blockchain. All transactions are visible to everyone. This creates trust because users can see how things work and check if something is fair.
- Control over data: Users own their data and can choose how to share or sell it. This gives people more control over their online presence.
Challenges:
It is not easy to understand Web3 technologies. Many users may have problems with things like wallets or blockchain-based applications.
More people use Web3, this is why it may slow down. Blockchains can become overloaded, and it makes transactions expensive or slow.
Governments cannot control Web3 because it is decentralized. This is why there are many questions how to protect users and prevent illegal activities. Also there are questions about ethical use of Web3.
The Future of Web3
Web3 can change a lot of things in our lives. It may change our way to shop, to use banks, and even to talk. It allows you to control your data, and keep it safe. Instead of using bank cards, you will be able to use dApps to make direct payments. This will make payments faster and cheaper.
It still may be long till Web3 changes our lives but it is on the way.