WEB 3

1. Context 

2. About Blockchain

• Blockchain is a decentralised digital technology that is designed to securely store data in a way where hacking and compromising are not easy like in current mediums and variants of the Internet.
• It is best known for its use in cryptocurrencies like Bitcoin and Ethereum, which are used to store and transfer digital currencies securely and transparently.

3. Key features of Web3

• One of the key features of Web3 is that it provides users with greater control over their data and digital assets.
• Instead of relying on centralised intermediaries, it offers options and mediums for an individual to have more privacy and more importantly, security of the content and transactions.
• Web3 allows for peer-to-peer transactions and interactions, which means that users are in control of their data and can choose whom they share it with.
• This also means that Web3 is more secure, as there is no single point of failure that can be exploited by hackers.
• Another key feature of Web3 is the ability to create and use decentralised applications (dApps) and smart contracts.
• These dApps can be used for a variety of purposes, such as social media, finance, gaming and more.
• Many challenges need to be overcome before Web3 can become a mainstream technology, such as scalability, interoperability and user adoption.

4. Difference between Web3 and Web2

• Web2, also known as the centralised web, is the current version of the Internet.
• It is characterised by the dominance of large, centralised platforms such as Google, Facebook and Amazon.
• Among the main differences between Web2 and Web3 are:

4.1. Centralisation vs. Decentralisation

• Web2 IS centralised, meaning that data is stored on centralised servers owned and controlled by large corporations.
• In contrast, web3 is decentralised data that is stored on a decentralised network of computers that are owned and controlled by the users themselves.

4.2. Intermediaries vs peer-to-peer

• Web2 relies heavily on intermediaries such as banks, social media platforms and online marketplaces to facilitate transactions and interactions.
• Web3 enables peer-to-peer transactions and interactions, meaning that users can transact directly with one another without the need for intermediaries like banks, for example.

4.3. Data ownership and control

• In Web2, large corporations like Facebook and Google have significant control over user data and can monetise it in ways that users may not be comfortable with.
• In Web3, users can choose to share data only with those they trust.
• In Web2, users must trust intermediaries to keep their data and transactions secure.
• In Web3, users can trust the network itself to keep their data and transactions secure.

5. Challenges for Web3

• Scalability: This is one of the biggest challenges. The current infrastructure of blockchain networks can only handle a limited number of transactions per second.
• User Adoption: While blockchain technology has been around for over a decade, it is still relatively unknown.
• Interoperability: Web3 is being built by a wide range of developers and organisations, each with its unique vision for how the technology should be implemented.
• Complexity: Technology requires a certain level of technical expertise to use and understand.
• This may be a barrier to adoption for some users who are not comfortable with technology or do not have the necessary technical knowledge.

6. Usage of Web3

6.1. Cryptocurrencies

• They are built on blockchain technology, which is a key component of Web3.
• These digital currencies enable secure, decentralised transactions without the need for intermediaries.

6.2. Decentralised Finance (DeFi)

• DeFi is a movement that aims to build a new financial system on top of blockchain technology.
• DeFi applications enable users to borrow, lend and trade cryptocurrencies without the need for traditional financial intermediaries.

• Web3 is being used to create decentralised social networks like Mastodon, which are designed to be more user-centric.
• Web3 is also being used to develop a decentralised identity verification system.