If you’ve been around crypto social media at all over the past few months, you’ve probably heard the term Web3.
Crypto can be confusing enough — now there’s a whole other web to worry about? But don’t stress. There’s a good chance you’re closer to web3 than you realize. That’s a good thing, because web3 is a total paradigm shift in how we approach the Internet, payments, and crypto at a fundamental level.
Let’s start with a brief history of the internet, before making our way into what web3 has to offer. And if you’re patient — a way to profit from the new web at the same time.
The Evolution of the Internet
Web 1.0 — The Static Web
The earliest era of the internet was web1. ‘Content creator’ simply meant ‘developer.’ Websites were just images and text, and couldn’t handle any kind of interactivity. That means you could read a blog post but not comment on it.
Web 1.0 was very one-sided, leaving a vacuum for technologists to fill. A push for interactivity led to the modern-day web as we know it.
Web 2.0 — The Dynamic Web
You’re on Web 2.0 right now — the dynamic and interactive web (sometimes called the social web). On today’s internet, anyone can be a creator. Platforms like WordPress and Squarespace make it easy to run a website. YouTube lets anyone upload high-quality videos online. Cloud computing and storage let us access unlimited data at any time, from anywhere.
Crucially, Web 2.0 brought social media to the headlines of our lives. Today, the Internet lets millions of people interact with each other every day. Just think about Facebook, Twitter, Instagram, and Tiktok. Everything you do on the Internet can be shared, seen, viewed, and built upon.
Web 2.0 as we know it started in 2005. Since then, the Internet economy has solved countless problems — but also created new ones:
- Apps on Web 2.0 centralize user data, making it vulnerable to breaches and hacks.
- To use free apps, you tend to sign away the rights to your personal data.
- Companies are known to exploit their users’ information for profits.
- Centralized platforms have final authority regarding speech and ideas, meaning they can censor and shut down people or accounts they disagree with.
These issues are fundamental to how the Internet works today. Web3 arose as a response and aims to solve these problems with the power of blockchain.
Web 3.0 — The Decentralized Web
When people talk about Web 3.0 (or simply Web3), they’re referring to the next era of the Internet. We’re not entirely there yet, but we will be soon. Content in web3 isn’t centralized on platforms like Instagram, YouTube, and Twitter. Applications in web3 aren’t run from cloud servers owned by Amazon and Google.
Instead, content and applications live on the blockchain. What is the blockchain? It’s a record (or database) of interactions, software, and transactions that gets updated on thousands of different computers worldwide.
You’re probably most familiar with blockchain in reference to cryptocurrency — don’t worry, we’ll get to that soon. First, here’s how a decentralized internet (run on the blockchain) solves the problems of Web 2.0:
- Greater security. With Web3, your data isn’t centralized in one place. Instead, it’s distributed and encrypted across thousands of separate computers, making it nearly impossible to breach.
- More transparency. Your data is your own with web3. Instead of paying for services and apps with your email address and behavioural data, you pay with cryptocurrency.
- No more gatekeepers. Users run their platforms, not central entities. That means you can’t be censored, banned, or blocked off from your digital livelihood by a single company.
That’s great and all, but where does cryptocurrency fit into all this? Let’s break that down right now.
What is Web3 vs. Cryptocurrency?
Cryptocurrency is digital money. You can use it to buy or sell goods and services in the real or digital world. Unlike fiat money that’s issued and regulated by governments, cryptocurrencies are governed by their users.
But without a central processor like MasterCard or Visa handling transactions, how can you trust crypto? That’s where blockchain comes in. A record of all cryptocurrency transactions is kept publicly available on the blockchain. That ledger is secured cryptographically to prevent fraud.
Notice how cryptocurrency is one kind of application that works on top of blockchain? Web3 refers to all the other applications that can work on the blockchain, too: file-sharing, content publishing, cloud computing, and more.
Here are a few of those applications right now:
What is Web3 Used For?
Identity & Payments
The only thing you need to interface with the web3 ecosystem is a crypto wallet. A wallet stores the keys you need to access your crypto assets — NFTs, cryptocurrency, etc. Your wallet is your identity on the decentralized internet: it’s how you ‘log in’ to web3 compatible sites and services.
Crypto wallets let you make transactions conveniently and anonymously in web3 applications.
There is no more need to input all your information into a form and wait for a creditor to approve the payment. Web3 transfers are fast and affordable.
We’ve been talking about decentralized apps (dapps) a lot. But how exactly do you run a service on a decentralized network? After all, we don’t have a central body approving and executing software in web3.
Instead, we use smart contracts. These are pieces of software that self-execute on the blockchain. Since they can run on their own, we’ve automated away the need for a third party. Now, transactions can happen peer-to-peer. Here are a few dapps you can use today:
- Mirror is a decentralized publishing platform. Think Medium but on the blockchain. Network participants (writers and readers) co-own the platform and can sell their stories as NFTs, crowdfund story ideas, and get tips from readers.
- Filecoin is a decentralized data storage network. It’s an open marketplace where you can buy and sell storage space over the blockchain. Apps like Filecoin are direct responses to cloud storage providers like Google and Amazon.
- Braintrust is a user-owned and operated talent platform to connect freelancers and companies. Users earn the $BTRST token for onboarding new talent, vetting projects, and inviting employers. Since it’s peer-to-peer, workers avoid management fees from platforms like Fiverr and Upwork.
We’re seeing a newer iteration on the idea of a dapp: DAOs, or decentralized autonomous organizations.
These are companies or groups that tokenize group memberships — you need to own tokens to be a member. If you want to grow the value of your stake, you must contribute to the group. A great example is the Friends with Benefits DAO, a group of crypto and web3 enthusiasts, developers, and artists.
Take Advantage of the Future Today
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Frequently Asked Questions
What is a Web3 browser?
A web3 enabled browser lets you interface with the decentralized internet. That includes dapps, DAOs, and other crypto-powered goods and services. Typically, Web3 browsers need to connect to Ethereum networks and your crypto wallet.
Is Web3 a blockchain?
Web 3.0 is how we describe the next era of the internet. While it’s not a blockchain, it refers to a kind of web that uses apps powered by blockchain technology and smart contracts.
What companies use Web3?
Web3 is the decentralized internet. Several organizations and services already take advantage of this, like Mirror, Filecoin, and Braintrust. To interface with web3 companies and apps, you’ll need a crypto wallet first.