Web3 is a term representing the subsequent version of the internet, where blockchain plays a significant role in granting users greater authority over their data, digital identity, and online relationships. Today’s Web2, characterized by centralization with platforms such as Google, Meta, or Amazon, is not Web3. The latter operates on decentralized networks where data is owned by users and they can communicate amongst themselves without the use of third parties.
Web3 is fundamentally a combination of the aforementioned components: cryptocurrencies, smart contracts, and decentralized applications (dApps). This is the internet that large corporations cannot monopolize but rather built on their users. Customers are able to do all kinds of transactions and even utilize services through their cryptocurrency wallets, thus eliminating the need for a bank or any intermediary. The ownership is established through blockchain, which guarantees the utmost transparency as well as security.
The use of Web3 can be illustrated through several examples such as decentralized finance (DeFi) which allows users to straight up lend and borrow money without the involvement of banks, and non-fungible tokens (NFTs) which is a way of selling digital art directly from the artist to the buyer. Web3 further introduces the concept of digital identity management systems that empower users with the choice over what information they are willing to share in the online world.
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Proponents consider Web3 as the new and more just version of the internet because it is open, user-driven, and resistant to censorship. Detractors claim that it is still underdeveloped and cannot be used by the masses. Nevertheless, whether by one way or another, Web3 signifies an important milestone toward the future internet where blockchain technology acts as the driving force behind the innovations and the empowerment of users.