Alve

Feb 07, 2023

What Is Web3 and How Will it Work?

The first version of the internet that was publicly available to use, , is referred to as Web 1.0. Dating back to the early 90s, it was largely made up of static web pages connected by hyperlinks.

Then came Web 2.0, the age of the internet as a platform. We saw the rise of e-commerce and social media sites like Facebook, Twitter, and Instagram. People gained the ability to interact with online platfoms and publish content of their own. Smartphones and were major drivers of growth here.

As many people see it, the problem now is that internet users are required to surrender their personal data to use "free" services provided by tech giants like Google, Microsoft, or Amazon. Shopping, social media, blogs—all of it about our preferences and the way we use these services, which is then sold to third parties and used to serve up targeted ads.

The term Web3 was coined by Gavin Wood—one of the co-founders of the Ethereum cryptocurrency—as Web 3.0 in 2014. Since then it’s become a catch-all term for anything that has to do with the next generation of the internet being a .

Wood, and those who support the Web3 concept, claim that Web 2.0 is controlled by big tech, which in turn is beholden to regulators who may or may not be effective at maintaining public trust in the internet or data security. In a 2021 , Wood said the current web requires trust in institutions that we can’t hold accountable: 

"Maybe [companies] tell the truth because they're scared that their reputation will take a big hit if they don't. But then, as we saw with some of the Snowden revelations, sometimes companies don't get an opportunity to tell the truth," Wood told Wired. "Sometimes, security services can just install a box in their back office, and they're told, ‘You don't need to look at this box, you're not allowed to say or do anything about this box, you just have to sit quietly.’”

Proponents envision Web3 as an internet that does not require us to hand over personal information to companies like Facebook and Google in order to use their services. The web would be powered by blockchain technology and , with all information published on the public ledger of the blockchain.

Similar to how cryptocurrency operates, everything would have to be verified by the network before being accepted. Online apps would theoretically let people exchange information or currency without a middleman. A Web3 internet would also be permissionless, meaning anyone could use it without having to generate access credentials or get permission from a provider.

Instead of being stored on servers as it is now, the data that makes up the internet would be stored on the network. Any changes to, or movement of, that data would be recorded on the blockchain, establishing a record that would be verified by the entire network. In theory, this prevents bad actors from misusing data while establishing a clear record of where it’s going.

Just as cryptocurrency blockchains are built to prevent "double spending," a blockchain-centric internet would, in theory, make it harder to manipulate and control data. Since data would be decentralized, no gatekeeper would have control of it, meaning they couldn’t bar anyone’s access to the internet.

On paper, that would give a lot more people access to the internet than before, and AI would be employed to curtail bots and click-farm websites. An example of a Web3 application might be a peer-to-peer payment app that works on a blockchain. Instead of using a bank, people could pay for a good or service using a decentralized app (Dapp) made for payments.

Before a transaction is finalized, it would have to be verified by the network and then coded into the digital ledger of the blockchain. A payment system like this could benefit people who can’t open bank accounts, don’t have access to them, or are by large payment providers.