Beginners Guide: What is Web3 and Why Does It Matter?

The internet has changed the world in many ways, but it also has some drawbacks. For example, most of the internet today is controlled by a few powerful companies that collect and monetize our data, censor our content and dictate our online experience. Moreover, the internet is vulnerable to cyberattacks, hacking and censorship by governments and other actors.

Web3 is a new paradigm for the internet that aims to address these issues and create a more decentralized, open and fair web. Web3 is not a single technology or platform, but rather a vision of how the internet should be. In Web3, users have more control, privacy and ownership of their data and digital assets. They can interact directly with each other without intermediaries or middlemen. They can also participate in the governance and development of the web platforms they use.

But what exactly is Web3 and how does it work? And why does it matter for the future of the internet and society? In this beginners guide, we will answer these questions and more.

What is Web3?

Web3 is a term that refers to the third generation of the web, following Web1 and Web2. Each generation of the web has its own characteristics and features:

• Web1: The first generation of the web was mainly static and read-only. Users could access information from websites, but they could not create or share their own content. Web1 was dominated by HTML, HTTP and FTP protocols.

• Web2: The second generation of the web was more dynamic and interactive. Users could create and share their own content on platforms like social media, blogs and wikis. Web2 was dominated by AJAX, APIs and cloud computing.

• Web3: The third generation of the web is more decentralized and peer-to-peer. Users can control and own their own data and digital assets on platforms that are built on blockchain, cryptography and smart contracts. Web3 is dominated by Ethereum, IPFS and other decentralized protocols.

How does Web3 work?

Web3 works by using blockchain technology to create a distributed ledger that records transactions and data in a secure and transparent way. Blockchain is a system of nodes (computers) that communicate with each other using a consensus mechanism to validate transactions and data. Each node has a copy of the ledger, which makes it impossible to tamper with or manipulate.

Blockchain also enables the creation of smart contracts, which are self-executing agreements that run on the blockchain. Smart contracts can encode rules, logic and conditions for transactions and data. For example, a smart contract can automatically transfer funds from one account to another when certain criteria are met.

Web3 also uses cryptography to ensure the security and privacy of transactions and data. Cryptography is a method of encrypting and decrypting information using mathematical techniques. Cryptography can also be used to generate digital signatures, which are unique identifiers that prove the identity and authenticity of a sender or receiver.

Web3 also uses decentralized protocols to store and transfer data across the network. Decentralized protocols are systems that do not rely on a central authority or server to function. Instead, they use peer-to-peer networks where each node can store and share data with others. For example, IPFS (InterPlanetary File System) is a decentralized protocol that allows users to store and access files on a distributed network.

Benefits of Web3:

• Decentralization: Web3 is decentralized, meaning users have control over their data, and there is no central authority to control or manipulate the data.

• Transparency: Web3 is transparent, meaning anyone can view the data on the blockchain, ensuring that data is not manipulated or corrupted.

• User Control: Web3 prioritizes user control, meaning users have more control over their online identity and privacy.

• Security: Web3 is highly secure, making it nearly impossible for hackers to steal or manipulate data.

Web3 Applications:

• Decentralized Finance (DeFi): DeFi is one of the most popular Web3 applications, offering financial services that are accessible to anyone, anywhere in the world, without the need for intermediaries.

• Social Media: Web3 social media platforms prioritize user privacy, offering decentralized alternatives to traditional social media platforms.

• Gaming: Web3 gaming platforms offer a new level of transparency and fairness, allowing players to own and trade in-game assets.

• NFT Marketplaces: Web3 NFT marketplaces offer a new way for creators to monetize their digital creations, offering a decentralized marketplace for buying and selling unique digital assets.

Web3 Technologies:

• Blockchain: The blockchain is the foundation of Web3, providing a decentralized and transparent platform for storing, managing, and transferring data.

• Smart Contracts: Smart contracts are self-executing contracts that run on the blockchain, ensuring that transactions are secure and transparent.

• Interoperability: Web3 technologies are designed to be interoperable, meaning that they can work seamlessly with other Web3 technologies, creating a network effect that benefits all users.

Why does Web3 matter?

Web3 matters because it has the potential to create a more democratic, fair and inclusive web. Some of the benefits of Web3 are:

• User sovereignty: In Web3, users have more control and ownership of their data and digital assets. They can decide who can access their data, how it is used and what value they get from it. They can also monetize their data or assets directly without intermediaries or fees.

• Privacy: In Web3, users have more privacy over their online activities. They can use encryption, anonymity or pseudonymity to protect their identity and data from unwanted surveillance or tracking. They can also use zero-knowledge proofs or other techniques to prove something without revealing any information.

• Censorship resistance: In Web3, users have more freedom of expression and access to information. They can use decentralized platforms that are not controlled by any single entity or jurisdiction. They can also use encryption or other methods to bypass censorship or restrictions imposed by governments or corporations.