Web3 is a term for a new kind of internet service that uses decentralized blockchains, which are the ledger systems that underpin cryptocurrencies. Web3 is the internet where the builders and users own and control the platforms they use, using tokens as the medium of exchange.
Web3 is more than just crypto, which refers to all the coins and tokens that exist on top of blockchains. Web3 is an internet where cryptocurrencies and NFTs are embedded into the platforms you use.
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How the Web Has Changed Over Time
To understand what Web3 is, it is useful to look at how the web has changed over time. The web can be roughly divided into three phases: Web 1.0, Web 2.0, and Web 3.0.
Web 1.0: The Static Web (1990-2004)
Web 1.0 was the first version of the web, which consisted mainly of static websites owned by companies. There was little interaction between users and content creators, and most people were passive consumers of information. Web 1.0 was a read-only web.
Web 2.0: The Social Web (2004-now)
Web 2.0 emerged with the rise of social media platforms, which enabled users to create and share their own content and engage with each other. Web 2.0 was a read-write web, where users had more voice and influence. However, Web 2.0 also created some problems, such as:
- Centralization: A few large tech companies dominated the web and controlled most of the data, value, and power.
- Privacy: Users had to give up their personal information and data to use the platforms, which could be exploited or leaked by hackers or governments.
- Monetization: Users did not benefit from the value they created or contributed to the platforms, which relied on advertising-driven revenue models that often manipulated user behavior.
Web 3.0: The Decentralized Web
Web 3.0 is the next phase of the web, which aims to solve the problems of Web 2.0 by using blockchain technology. Web 3.0 is a read-write-own web where users have more ownership and control over their data, identity, and assets. Some of the features of Web 3.0 are:
- Decentralization: Web 3.0 platforms are powered by distributed networks of nodes that run on peer-to-peer protocols instead of relying on centralized servers or intermediaries.
- Cryptography: Web 3.0 platforms use cryptographic techniques to ensure security, privacy, and integrity of data and transactions.
- Tokenization: Web 3.0 platforms use tokens to incentivize participation, reward contribution, and enable governance. Tokens can represent anything from currency to digital art to voting rights.
Why Web3 Matters for Crypto
Web3 is important for crypto because it provides a new paradigm for creating and using cryptocurrencies and other digital assets. Some of the benefits of Web3 for crypto are:
- Innovation: Web3 enables new forms of innovation and experimentation in the crypto space, such as decentralized finance (DeFi), non-fungible tokens (NFTs), decentralized autonomous organizations (DAOs), and more.
- Inclusion: Web3 lowers the barriers to entry and access for crypto users and creators by providing open, permissionless, and censorship-resistant platforms that anyone can join and use.
- Empowerment: Web3 gives more power and agency to crypto users and creators by allowing them to own their data, identity, and assets and participate in the governance and decision-making of the platforms they use.
Conclusion
Web3 is a vision for a new internet that is built on blockchain technology and powered by cryptocurrencies and tokens. Web3 offers a read-write-own version of the web, where users have more ownership and control over their online experience.
Web3 is significant for crypto because it enables new forms of innovation, inclusion, and empowerment in the crypto space.
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