This is a question I have been pondering and one of those "specialist" terms that I have often left aside to worry about itself, but as with Smart Contracts and other similar terms, it's high time I got a bit of a hold on what it actually means and today I am going to briefly share my findings.
Firstly though, if there is a Web3 it follows that there was a Web1 and Web2, even if we didn't call them by name. My intuitive understanding of what they are is as follows.
Web1 could be called the static web in that it really is what you see is what you get, some news orientated sites among others still operate on the same model. Very simply content is uploaded and available to view and navigate through a series of menus and hyperlinks. Web2 took it to the next level and it could be called the social web in that it provided a platform for interaction and widespread sharing. Some obvious examples are Facebook and the now defunct Twitter (as opposed to X - Elon Musk and Donald Trump's propaganda machine), but it also includes other platforms like YouTube where interaction was just as important as content. Instagram and the rise of the influencer have helped to solidify the value of Web2 environments.
The next evolutionary step was of course Web3, which is a decentralised version of the internet where users own their data, identities, and digital assets instead of relying on centralised platforms like Google, Facebook, or Amazon. Built on a blockchain-based infrastructure it means that transactions and records are stored on distributed ledgers and this empowers users individually to control digital assets, identities, and participation in online communities.
This sounds tailormade for Cryptoland and indeed that's the point!
Crypto can be seen as the currency of Web3 and especially with currencies like BitCoin, Ethereum, and StableCoins paving the way for peer-to-peer payments without banks (remember our original crypto dream anybody?). Furthermore held tokens represent ownership in decentralised applications (DAOs), digital art (NFTs), or governance rights in protocols and are driven though the use of smart contracts, which are automated programmable agreements, as discussed in an early post, that process transactions and governance.
All of this sounds great, but at the end of the day what really makes anything tick is real world application. Remember Esperanto anybody (the so called international pan-European language without a single native speaker!). This is why companies like Sony are building Web3 payment networks using StableCoins (also something I predicted several years ago). There is no clearer demonstration than this of how crypto ties directly into (often emerging new) digital economies.
The bottom line is that it empowers users who, instead of being products for advertisers, become stakeholders and this has led to the rise of new business models particularly related to gaming, finance, and social platforms who are experimenting with tokenised economies. Success will lead to wider adoption, which is also evidenced (while it is early days) in growing institutional adoption, a clear example is the partnership between VerifiedX and Crypto.com which demonstrates how Web3 and crypto are able to merge into regulated financial systems.
The promise of Web3 has still yet to be fulfilled, although the early signs are good especially because he infrastructure is maturing rapidly. We must however remain cautious because as with everything crypto (in fact you could say financial) its robustness will only be tested when it is able to overcome certain hurdles, namely volatility, regulation, and scalability.
