Everything About Web3 You Need To Know | 2022

When discussing everything about Web3, it would help to reflect on how much technology and the internet have evolved over the years. Starting from the first generation of the internet, Web1, which was launched in 1990, is a read-only network where users could only consume content.

Web2 focus on interactions, where users could make their data available to service providers and then finally approach the third generation of the internet.

Web3 is the future of the internet that seeks to move centralized authority from service providers back to the individual.

Using decentralized Blockchain technology, you’ll now be able to share data without the help of third parties.

Here we’ll be discussing everything you need to know about Web3. Ensure you read to the end.

Table of Contents

What Is Web3.0 Technology?

Web3 is a term given to the new kind of internet services. These services are built using decentralized Blockchain technology.

A decentralized blockchain is a shared ledger system used by most cryptocurrencies like Bitcoin and Ethereum. Though the term has been around for some years, it recently became popular in 2021 among cryptocurrency enthusiasts and big technology companies. Web3.0 enthusiasts believe that the idea of decentralized blockchain technology will reshape the financial sector, organizations, money, value, the internet, and liberal thinking.

everything about web3

What Is Special About Web3?

One distinct thing about everything you need to know about web3 is that it is the future of the internet built around the idea of decentralized blockchain technology. Outstanding features of Web3 technology include decentralization, permissionlessness and trustlessness, machine learning, artificial intelligence, connectivity, and ubiquity.

Through web3, you’ll be able to create your platforms, make profits from them, and also reclaim your data without the help of a third party or agency.

Who Is Behind Web3?

There are several prominent personalities behind the web3 technology and one of such people you need to know is Dr. Gavin Wood. He is the founder of the blockchain infrastructure company, Parity Technology. He coined the term ‘Web3.0’ in 2014, where he laid out his plans for the future of the internet.

He runs a web3 foundation. They believe that you should be in charge of your data and not corporations.

What Is Web3 And How Does Web3.0 Work?

Web3 is the new generation of internet services built on blockchain technology. You might be a bit confused about the whole idea of this concept.

Now let’s look at the breakdown of the internet:

The first version of the internet that was publicly available to the masses was the World Wide Web, commonly known as web 1.0. It was developed in the 90s and was generally made up of static web pages connected by hyperlinks.

Followed closely was the web 2.0, this ushered in the age of the internet as a platform. Here we saw the rise and fall of many dot-com companies. With the arrival of e-commerce platforms and social media platforms, people could now transact and interact with each other across time and distance.

However, the issue with this technology was that you’ll have to surrender your personal data to use these platforms. The whole idea of Web3 is building an internet where people can transact without the interference of their parties or agencies.

It generally supports the development of the internet on a decentralized digital platform. A decentralized digital platform simply means that no third party will have access to your personal data. It pushes the idea that you don’t have to surrender your personal information to big tech companies before you can access their services.

Web3 simply works through the help of Blockchain technology and artificial intelligence. Here information will be published on the public ledger of the blockchain. You’ll be able to carry out transactions or interactions without the interference of middlemen.

The web3 technology also promises a permissionlessness service, which means you’ll use it without having to provide access credentials or get permission from a third party. Data won’t be stored on servers as it is with the web2, rather it would be stored on the network. 

This means whatever changes or movements of data you make will be recorded on the blockchain, this would then be verified by the network. One good thing about this is that it makes it difficult to manipulate or control data. 

What Are The Benefits Of Web3?

While trying to know everything about web3, you should also ensure to check out its benefits. Here we’ve highlighted the benefits of web3 :

Privacy

One of the amazing benefits of web3 is the emergence of a decentralized digital platform that allows you to monitor and control your online activities and personal data. You can also control the level of information about you that would appear online and who gets to see it.  You also get access to a cryptographically secure method of proving whether the information is correct.

Opportunity

Web3 opportunities of various kinds to diverse users. Web3 is an open-source technology, which means you and other users can build on top of various projects.

While the web2 technology worked with limited API access, web3 can be likened to a Lego game, where every block can be connected and used multiple times. Through this process, several other projects can be built from existing projects. It also makes it easy to generate innovative new projects with real value.

Here are Web3 Investment Opportunities for you

Ownership

The web3 technology is built on decentralized Blockchain technology. This paves way for content creation and the termination of third parties.

Web2 uses social media platforms to save, distribute, and benefit from the content. But web3 allows you to earn tokens directly for your community participation and activities. The amazing thing here is that these tokens have a monetary value. It gives you actual ownership of your projects.

Collaboration

Web3 is powered by a (Decentralized Autonomous Organization) DAO, a new method of management without boards of directors.

DAOs are managed through a set of rules written in codes, allowing a large number of people to participate in it. It is predicted that in the coming years a lot of traditional organizations and corporations will adopt this mode of operation.

Security

Web3 is secured and tamperproof, compared to web2 where information and personal data can easily be stolen or copied without your permission.

Web3 notifies you or other users about any unauthorized access. Personal information cannot be stolen without being detected. While web3 is secured, there are still lots of unsecured web3 applications, therefore it is better you use audited web3 applications for safety.

Fewer Intermediaries

Web3 will connect users directly to organizations without the help of third parties. The number of central authorities that will get a share of the earnings from electronic transactions will also be decreased.

Web3 promises a trustless and decentralized network instead of the traditional centralized ones you’re used to.

What Are The Disadvantages Of Web3?

While the web3 technology has a lot of benefits, there are also some disadvantages like:

Doesn’t support older versions of devices

The web3 technology doesn’t support less advanced devices because it is mostly powered by artificial intelligence, machine learning, and blockchain.

Difficult for beginners to understand

Web3 is a bit hard to understand especially for beginners. It would require some learning and knowledge to fully understand its functionality.

Little or no regulations

One of the biggest disadvantages most people are complaining about is the difficulty in regulations. Due to its decentralized nature, it would be difficult to monitor and control it.

Existing organizations and corporations will also have to upgrade their websites and platforms to easily access the web3 technology.

What Are The Features Of Web3?

Some outstanding features of Web3 include:

Decentralization

This is one of the unique features of Web3. While web2 most devices use HTTP in the form of special web addresses to find information stored on a single server.

Web3 stores information in multiple locations at the same time, here information would be located based on its content.

This would lead to a large breakdown in the number of databases held and controlled by tech giants like Google, handing it directly to the users.

Artificial intelligence and Machine learning

With web3, computers will be able to process and understand information like humans, using technologies based on semantic Web concepts and natural language processing. It would also be able to use machine learning which is an arm of artificial intelligence that uses algorithms and data to imitate how humans learn, thereby developing its accuracy.

This will help computers to produce quicker and better results in the fields of drug manufacturing and other materials.

Trustless and Permissionless

Asides from the fact that web3 is decentralized and built on open source technology, it will also be trustless.

This means you or any other user can transact directly without going through a trusted third party. And being permissionless means you don’t need approval from governing or regulatory bodies to participate in it.

Web3 apps will be operated on blockchains or decentralized peer-to-peer platforms or a combination of both. These apps are known as Dapps.

Connectivity and Ubiquity

Web3 allows information and contents to be more connected and ubiquitous. It would be accessed by many applications and with a growing number of devices connected to the web.

What Can Web3 Be Used For?

There are various things web3 can be used for. It can be used to tokenize everything including memes, artworks, fashion, social media, sports, and more. 

This token gives you monetary value. And you can store your ownership on blockchain technology. One of the most common uses of Web3 is cryptocurrencies and NFTs. Web3 is still in its early stages and people are still getting into the space.

Another great use of Web3 is Defi. Defi simply stands for decentralized finance. Decentralized finance is a new idea that promotes the use of decentralized apps for financial services.

These decentralized apps are simply general decentralized software apps that use smart contracts. Smart contracts in decentralized apps are protocols that help in defining the special functionalities of these apps. Most users are now also beginning to implement the use of Web3 for a better gaming experience

Here we also have Defi, which is a general term for various decentralized finance applications and projects in the blockchain space. These projects are geared towards bringing a change in the traditional finance world. An example of a decentralized financial app built on blockchain technology is Uniswap.

What Are Examples of Web3?

everything about web3

There are various examples of Web3 and they include:

1. Blockchain technology

Blockchain technology is amazingly one of the technologies that birthed the whole idea of the web3 and for this reason, it is the closest example. The blockchain is a record or ledger of mainly financial transactions. It exists on various computers spread across the internet.

Whenever a new block is added to the chain, every database must agree and be adjusted. Every transaction is also open to public view. If an attempt is made to tamper with the ledger, it corrupts the chain, and since verified and validated copies of the transaction are spread across the web, no central authority can control it.

Blockchain technology is mostly associated with cryptocurrencies but you can use it for any application to keep a record of your transactions.

2. Cryptocurrencies

Cryptocurrencies or crypto are digital currencies or virtual currencies that are not regulated, supplied, or controlled by the government or financial institutions.

Cryptocurrencies are built on blockchain technology. It helps inaccurately record how many currencies there are and who holds what amount in it. These digital currencies are increasingly supplied through what is called mining. This provides the computational power to operate the blockchain in exchange for new currencies.

3. Non Fungible Tokens

Non-fungible tokens or NFTs are other examples of Web3. NFTs are also a form of crypto. The only difference between NFTs and normal digital currencies is that it is unique and cannot be exchanged for another, which explains the name.

NFTs are connected to physical or digital assets just like paper title deeds of a house represent ownership. However, no legal authority recognizes NFTs, so in essence, you’re just buying control over a string of letters and numbers for now.

NFTs are still new in the market and hopefully, with more adoptions and people getting into it, rules might be adjusted.

Find out Non Fungible Tokens is doing in Nigeria, Africa

4. Smart contracts

One thing that differentiates traditional centralized financial systems and decentralized finance systems is the amount of paperwork involved. If you apply for loans and business grants from the bank, it involves lots of paperwork, confirmations, and signatures.

The financial institution would draft a contract with you describing the terms of the obligations of both parties.

If you don’t fulfill your part of the contract, the financial institution can take up whatever actions that were stated on the contract to get back its loan. Now smart contracts do the same except without the interference of third parties or central authorities.

With smart contracts, you can offer financial services, as well as draw up legal agreements between parties more conveniently than the traditional method. 

Smart contracts are more neutral and difficult to manipulate once it is functional. Just like any other contract, smart contracts are as good and effective as the terms stated within them.

If it’s a fair smart contract, then it will be enforced with impartiality.

5. Initial Coin Offering (ICO)

Initial Coin offerings are similar to cryptocurrencies because the coins on offer are also crypto. Whenever you develop a new coin offering, especially one with potential, you’ll require initial money to kickstart the project.

Individuals who invest in an ICO are buying your crypto without any guarantee that it would amount to something. 

They only buy your crypto with the hope that just like Bitcoin, the value of the coin will skyrocket and bring them a mouthwatering fortune overnight. Sometimes, ICOs are sold just like shares but they don’t confer any ownership to the buyer. The value of the coin is however connected to how valuable the company promises to be. And this is one of the reasons ICOs are famous with tech startups looking for alternative funding that doesn’t involve angel investors or banks.

ICOs have been hyped a lot and this is why you should be careful when looking for new crypto to buy.  Some ICOs are just ways to scam people and many people have fallen victims to this.

 Besides ICOs are not regulated the way IPOs are, which also means anyone can invent an IPO.

6. Decentralized (dApps)

Decentralized apps are applications that are not controlled by third parties, unlike centralized apps. An example of a centralized app is Google drive.

When you’re using services provided by tech giants like Google, your personal data and information can be controlled. One of the benefits of using Google though is that your information gets stored in the cloud, collaborate with teams, and lots more.

Now, dApps offer all these advantages and more, the great part is that you don’t get monitored by central authorities or third parties. Most dApps function through Ethereum Blockchain. They use it for virtual computation, which is then paid for using Ethereum gas fees.

It is important to know that, dApps follow the web3 requirements to be opened source, public, and secured through cryptography. Through this, you can easily control your data and who can access it, at the same time benefiting from cloud-based computing services to carry out any specific task the dApp was developed for.

7. The Metaverse

The Metaverse is another new technology that looks like it would interlink with Web3 if they ever attain their full potential. The technology is a vision of what the future interface of the Web will look like. It solely relies on augmented reality (AR) and Virtual reality (VR) to build an integrated user experience.

In the Metaverse, virtual or digital products you own blend with the natural world. It gives you the opportunity for you to relate to the web in a more embodied way.

Learn how MTN telecommunication network purchased 144 plots of Digital land in the Metaverse

An example of Metaverse is the popular Decentraland. It is an Ethereum-based 3D virtual world or Metaverse where you can buy or sell lands and also develop whatever you want on it. 

You can create marketplaces, applications, entertainment facilities, and more.

8. Distributed Computing (Edge Computing)

Edge Computing involves delivering online data and services very close to where it is being requested or generated. It is so close to being the antitheses of Big Data computing in massive centralized computer centers.

Whereas distributed computing occurs at the lateral edges of the network. Take, for instance, data may be processed on your local computer before being delivered to a central location to be aggregated. 

This simply means you can join the processing power of various devices along the edges of your network to one super big decentralized computer. With lots of IoT (Internet of Things) devices gathering information in companies, smart homes, and retail outlets, having sufficient computing power to process such data is tough.

Now, edge computing provides various ways to meet these demands, save on bandwidth, and also deliver on data requests quickly.

9. Machine Learning and Artificial Intelligence

Over the years, artificial intelligence and machine learning technology have been on the rise. Most applications and software you use are developed with these technologies, this is one of the ways Amazon’s Alexa works.

Now, with the Sid of Natural Language Processing (NLP), you can talk to an Intelligence agent and they can process it easily. Machine learning is also used in processing a massive amount of data in real-time to predict our wants and behavior.

With IoT, there are lots of intelligent network-connected devices everywhere. This helps in creating diverse ways to gather data and produce something valuable from it.

10. Decentralized Autonomous Organizations (DAO)

Any traditional organization like a business has centralized structural authorities. 

This structure is made up of top-level management like executives who oversee and controls the activities of others who contribute to the organization’s common goal. A DAO however brings down that structure. Here there are no executives who would coordinate activities.

Everyone in the organization has equal rights to speak or decide when money would be spent from the account and on what. They all get to decide how goals and objectives will be met as well as work together as a team.

DAO rules and regulations are encoded using innovative contract technology in a permissionless and trustless Blockchain. The cost and expenses involved in running administrative departments that traditional organizations create to run the daily operation are absent here.

DAO also reduces the tendency to commit fraud since all the transactions as well as their history are open to public scrutiny.

How Can I Invest In Web3?

With the growing acceptance of Web3, you might be wondering how you can invest in this new technology and get your share of the profit. It might interest you to know that a growing number of top investors are putting their money in Web3.

The likes of Andreessen Horowitz have gotten so interested in the technology a former executive Kate Haun left the firm to search for Web3 investment opportunities.

You’ll have to know some things about this new technology before deciding to invest in it. Things like: 

  • A basic understanding of Web3.
  • What aspect of Web3 you’re interested in.
  • And how much are you willing to invest when you find a good Web3 project.

Getting this knowledge and equipping yourself with how Web3 works will help you make better investment decisions. You can start by investing in Web3 through Blockchain or the technologies developed on it. 

You can decide to purchase cryptocurrencies or ETFs like Grayscale. Cryptocurrencies have provided a good return on investment to most investors, however, ETF offers you exposure to blockchain technology with lesser risk.

You should also understand that Web3 is not just about Blockchain technology. It covers several other elements that change how we engage with the internet.

Web3 Investment opportunities for startups

Elements like VR and AR are other parts of Web3 you can explore, especially when it comes to Metaverse. NFTs and virtual lands on the Metaverse are also investment opportunities you can check out. 

Though this investment option is not for the average investor. Other conservative investments in VR and AR Web3 are stocks like Snap, Vizux, and Meta, formerly Facebook. 

What Are Some Existing Web3 Crypto Projects?

Web3 crypto projects are projects that are built using blockchain technology and cryptocurrencies.

Some of the best existing and new Web3 Crypto projects to watch out for include:

  • Ethereum (ETH)
  • Chainlink (LINK)
  • Filecoin (FIL)
  • Helium (HNT)
  • Theta Network (Theta)
  • Render Token (RNDR)
  • The Graph (GRT)
  • Cosmos (ATOM)
  • Yearn.finance (YFI)
  • Solana (SOL)

Here’s a brief description of each of them.

1. Ethereum (ETH)

Ethereum is one of the best Web3 crypto projects ever created. It’s a technology that was designed for global payments, digital money, and applications.

Many of the best Web3 crypto projects are also built on top of the Ethereum Blockchain. Here you can find a large range of decentralized financial networks, dApps, Metaverse coins, and lots more.

There are Games to Play and Earn Crypto

It is one of the best Web3 crypto projects that allow you or other Web3 crypto projects to create and deploy smart contracts.

Ethereum also has a crypto coin called Eth, it is the second-largest crypto project in terms of market capitalization behind Bitcoin.

2. Chainlink (LINK)

Chainlink is another great Web3 crypto project to watch out for. The decentralized oracle networks provide tamper-proof inputs, outputs, and computations to support advanced smart contracts on any Blockchain. One of the biggest challenges of the blockchain is the ‘Oracle problem’. Blockchains on their own are isolated and can’t draw data from external sources or interact with them.

Now Chainlink acts as a connection allowing blockchains to utilize data from external sources in their contract. LINK is the name of the project’s crypto coin.

3. Filecoin (FIL)

Filecoin provides a decentralized data storage marketplace, protocol, and cryptocurrency that ensures the web is more secured and efficient. It combines IPFS, a peer-to-peer distributed network protocol to create a more efficient and secure web devoid of corporate control.

This Web3 crypto project rewards you and other storage providers for storing files in Filecoin, clients also buy the services to store data in a decentralized cloud environment. 

Filecoin has a cryptocurrency called FIL.

4. Helium (HNT)

Helium is a decentralized Web3 crypto project that serves as a wireless network for IoT devices, it is powered by cryptocurrency.

The network was developed with devices known as Helium hot spots, gadgets with little antennas that can send small amounts of data over long distances using radio frequencies.

You can invest in some HNT coins, which are the project’s cryptocurrency.

5. Theta Network (Theta)

The Theta Network is another Web3 crypto project that serves as the only end-to-end infrastructure for decentralized video streaming and delivery. It provides both technical and economical solutions. Theta was created out of the need to reduce or eradicate the challenges faced associated with the high cost of delivering videos in different parts of the world.

Theta is set to bring a big change in today’s online video industry just like YouTube did to traditional videos years ago. The name of its crypto coin is Theta.

6. Render Token (RNDR)

The Web3 crypto project is a distributed GPU rendering network built on top of the Ethereum Blockchain technology. 

Render sims to link artists and studios in need of GPU computing power with mining partners willing to rent their GPU powers out. Though similar to Filecoin, however instead of paying for storage, clients can purchase GPU power.

The network offers academics, developers, and more access to distributed graphics rendering power. RNDR is the name of the project’s coin.

7. The Graph (GRT)

The Graph token is a Web3 crypto project that serves as an indexing protocol for querying networks like Ethereum and IPFS.

You can build and publish open APIs, called subgraphs, thereby making data easily accessible. It serves as a medium of exchange and reward for community participants who act as curators, indexers, and delegators. GRT is its crypto coin.

8. Cosmos (ATOM)

Cosmos is an innovative Web3 crypto project that links competing Web3 crypto projects together.

It powers an ecosystem of blockchains created to scale and interoperate with each other. It aims to create an ‘Internet of Blockchains’, a network of blockchains with the ability to communicate together in a decentralized way.

Atom is the cryptocurrency of Cosmos.

9. Yearn.finance (YFI)

Yearn is a Web3 crypto project that serves as decentralized finance (Defi) product that lets users earn interest on their crypto assets using smart contract platforms like Ethereum.

The network facilitates loans in a decentralized way without the restrictions and rules associated with traditional centralized finance. Yearn allows you and other users to borrow cryptocurrencies in return for putting up collaterals. You’ll also pay interest on the loans.

Anyone can decide to act as the investor, so long as you’re interested in earning a yield on your idle coin. YFI is the native coin of the network.

10. Solana (SOL)

Solana is one of the fastest-growing Web3 crypto projects globally. The blockchain network also has the fastest-growing ecosystem in crypto, with lots of projects ranging from NFTs, Defi, and more.

The network offers similar services as its Ethereum counterparts, such as decentralized transactions, smart contracts, and more. SOL is the coin offered by Solana.

Web3 VS Metaverse: What Is The Difference?

Web3 and Metaverse have both been classified as the Internet of the future, however, they’re not the same. Web3 as you already know is all about who owns and controls the future of the internet, while Metaverse has to do with how you and other users will experience the internet of the future.

While Web3 is currently seeking to move the internet from the traditional centralized authority to a completely decentralized way of getting things done, Metaverse is about using VR technology to access tomorrow’s internet.

Web3 promises a decentralized, permissionless, and trustless Blockchain technology, where you can control all your online activities and personal data.

Metaverse visualizes a world where you’ll be able to move between virtual worlds using digital avatars. Some examples of Metaverse include Decentraland, Fortnite, and Horizon Worlds (a type of virtual game created by Meta, formerly Facebook).

Currently, the main type of Metaverse in use are gaming platforms, however, if this project becomes fully functional, it could change how we work, socialize, and more.

What Is The Connection Between Web3 and Metaverse?

While both technologies are still fledging concepts, they are not competing for versions of tomorrow’s internet. If they ever become fully functional, there could also be an overlap between them.

For instance, an artist might design unique fashionable wear for an avatar in the Metaverse, and then make a profit by auctioning it off along with other NFTs. 

This would grant exclusive rights to the buyer, even if others copied it, their avatars would still be different. If the Metaverse ever becomes fully functional, it might be centralized, or decentralized like Web3, it could also have a feature of both.

How Will Web3 Change The Internet?

Unlike Web2 which is solely read-write, an interoperable and social setting that takes your input into account, Web3 will let you go beyond the kind of interactions the current internet provides.

Using Web3, you’ll be able to build your platforms, profit from them, and reclaim your data.

One of the biggest changes Web3 will bring to the internet is the total removal of central authorities or third-party interference. Websites and platforms would be able to connect and interact with each other without the need for tech giants. It would introduce a decentralized digital space where you’ll have more control over your data and who to share it with.

How this works is that, whenever you want to share something, say a message, it gets added to the blockchain, and then distributed.

What Are The Differences Between Web2 and Web3?

Web2 refers to the current or second version of the internet you’re used to. It is a centralized network where most of our personal data are controlled and monitored by tech giants.

Web3 however, is the third version or future of the internet, it would be decentralized, open-source, trustless, and permissionless.  Most of our devices today have driven the successful growth and development of Web2.

The focus of Web2 is on community development while web3 focuses on individual growth and development.

Web2 uses technologies like HTML5, JavaScript, CSS3, and AJAX, while Web3 uses decentralized protocols, Al and Ml. Web2 runs web applications, while Web3 runs smart applications based on artificial intelligence and machine learning.

Tech giants have access to your personal data in Web2, while Web3 promises individual ownership over data and its uses. In Web2 you were the product, surfing through social networks, uploading videos, and commenting or sharing messages through third parties.

In Web3, you’ll be the owner of your content, deciding who sees what and when.

Conclusion

Web3 is still a fledgling idea, and a lot of people are still trying to understand what it is all about. It might be the future of the internet but it is nowhere close to overtaking the current internet as we know it.

Besides there are still lots of challenges around the web3 technology, talk as people who would prefer to remain anonymous or the tendency to scam people.

Well let’s see what the future of the internet holds for us, but for now, here’s everything you need to know about Web3.

FAQs

1. What is Web3?

Web3 is simply the third generation of the internet that is built on blockchain technology. Its sole purpose is to ensure that individuals get to control their personal data and not central authorities.

2. How can I invest in Web3?

Some ways you can invest in Web3 are through cryptocurrencies, NFTs, and the Metaverse.

3. What are can I benefit from using Web3?

The main thing you can benefit from Web3 is getting the right to control your personal data, whom to share it with, and how to profit from it.

4. What do I stand to lose from the Web3 technology?

This depends on your individual preferences, for someone who loves being anonymous, whatever information you share on the blockchain would be seen by the public. 

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References

Zdnet.com 

Freethinkers.com 

Coinmarketcap.com

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