what is web3.0 ?

category:web3 date: scan:653

With industry professionals in traditional technological sectors and the blockchain ecosystem expressing diverse perspectives on the past and future of the Internet, Web3 has recently gained widespread attention.

A quick overview of the term's history is necessary before continuing.

Tim Berners-Lee, who invented HTTP and coined the term "Concept for the Semantic Web," first introduced the phrase "Web 3.0" to refer to an integrated communication architecture that would allow Internet data to be machine-readable across various applications and systems.

Later, Ethereum co-founder Gavin Wood used the Berners-Lee phrase to refer to blocks in his 2014 blog post titled "DApps: What Web 3.0 Look Like." Chain technology is built on the capacity of a "zero trust interaction system" to establish "fundamentally diverse forms of interaction between parties."

Wood's writing focuses less on cryptocurrencies and more on protocols and technology, such consensus engines and cryptography, that enable more reliable social contracts on the internet. Later, he stated that Web3 wanted to promote "less trust and more truth."

Today's tech behemoths and pioneers of the blockchain sector are debating the word as they continue to think about Web3's fundamental ideas and protocols and how they can affect future trust models.

We'll explain Web3's link to the early internet versions, go over the core components of the Web3 stack, and examine the present and projected condition of the Web3 ecosystem in this deep dive.

The name "Web3" will be used instead of "Web 3.0," which is frequently used to refer to Tim Berners-vision Lee's for the Semantic Web.

The Internet's Evolution: Web 1.0, Web 2.0, and Web 3.

It's critical to comprehend the evolution of the internet and how Web3 varies from earlier iterations of the Web in order to fully appreciate what Web3 is all about.


Web 1.0 (1994-2004) (1994-2004)

The early internet, known as Web 1.0, began to take shape in 1994 and came to an end in 2004 with the emergence of social media behemoths like Twitter and Facebook. Although the public first became aware of the Web 1.0 Internet in 1994, it was actually a U.S. government program named ARPANET, or the Advanced Research Projects Agency Network, that launched Web 1.0 in 1968. When ARPANET first began, it was a modest network of academic researchers and military contractors exchanging information.

Users had little opportunity to communicate with one another on the Web 1.0 Internet, which mostly consisted of static HTML sites. Although private chat rooms and discussion boards are available on sites like Usenet and Internet gateways like America Online (AOL), the majority of people still don't connect or transact money online.

Web 1.0 form for ordering pizza. Pizza Hut was a cutting-edge business in the Web 1.0 era because it created a website where customers could purchase pizza. Payments, however, must be made in person. source.

A lack of secure infrastructure to move money limits the extent of interactions and financial transactions where they do occur. Pizza Hut was one of the more forward-thinking Web 1.0 businesses in this area. In 1995, it developed an order form that consumers could use to place orders and pay with cash when their food was delivered.

One of the earliest Internet gateways, America Online (AOL), was featured in an early commercial. Millions of people received CDs from AOL that had its software and 10 hours of free use. source.

Although AOL advertised in 1995 that customers could use the service to order flowers for their mothers, purchase sports tickets, or submit a paper on dinosaurs, online redemption required speaking with the provider because financial transactions are frequently unsafe and have weak encryption.


Web 2.0 (2004-present) (2004-present)

In 2004, the web began to evolve, and as a result, consumer demand for social interaction, music, video sharing, and financial transactions expanded significantly. This was made possible by faster internet connections, fiber optic infrastructure, and better search engine optimization.

Tom Anderson, a co-founder of an early Web 2.0 startup, has a MySpace presence. When you open a MySpace account, Tom is your initial point of contact. source.

Many of the Internet organizations and businesses that exist today were born out of the need for more involvement. The need for online music and video is satisfied by data-sharing services like Napster, social media platforms like Facebook, MySpace, and Twitter promote social engagement, and Google gives consumers an effective way to access the massive amount of online material. New encryption standards like 256-bit AES enable traditional institutions like Bank of America to meet the demand for financial transactions and electronic cash transfers.


By introducing new features, this new, more interactive internet has significantly enhanced users' web experiences. Yet, it also provides a trade-off that continues to shape how we live our online lives today: in order to take use of these novel features and interactions, users must hand over a lot of personal data and control to a centralized organization.

That's largely how the internet functioned prior to today. In October 2021, Google, YouTube, Facebook, and Amazon alone in the U.S. received 23.56 billion visitors, which is about twice as much traffic as the websites ranked 5–20.


Web3 (2008-future) (2008-future)

The Bitcoin white paper, published by Satoshi Nakamoto in 2008, laid forth the fundamental ideas behind blockchain technology and peer-to-peer electronic money, paving the way for a shift from the Web 2.0 paradigm. Bitcoin introduced the first secure method of exchanging money over the internet without the need for a reliable third party, and it revolutionized the way we think about digital transactions. What we require, according to Satoshi, is a trust-free electronic payment system based on cryptographic proof.

The decentralized model of the internet didn't really come into focus until the development of smart contracts. If Bitcoin enables secure peer-to-peer payments and smart contracts that can expand the idea of programmable protocols to more advanced use cases - insurance, gaming, identity management, supply chain - how will the nature of web experiences and digital interactions evolve?

Web3 is a reinvented version of the internet that Gavin Wood calls a "safe social operating system."

Web3 brings back the decentralized architecture of Web 1.0, the first iteration of the internet with user-hosted blogs and RSS feeds, and combines it with the rich interactivity of Web 2.0 web applications such as social media platforms to provide a digital eco-system. In short, Web3 is a decentralized vision of the internet that seeks to create an entirely new system of contracts and change the way individuals and institutions enter into agreements.

Blockchain, cryptocurrencies, smart contracts, and oracles are the foundational components of Web 3.

A rising range of decentralized technologies, including blockchains, smart contracts, oracles, encrypted wallets, storage networks, and more, power the Web3 architecture. The Web3 technology stack's major layers and parts are described here.



blockchain

A shared ledger that is not under the jurisdiction of a single entity, blockchain is a highly secure and decentralized network that enables users to store data, exchange value, and record transactional activity. The Web3 is supported by the blockchain network, which offers a safe environment for the creation, transfer, and trading of cryptocurrencies as well as the generation of programmable smart contracts. The Web3's settlement layer is blockchain.


cryptocurrency

Cryptocurrencies are digital tokens that enable extremely secure transactions by utilizing the decentralized and tamper-proof environment of blockchain networks. They can be used to pay for Web3 services and take part in Web3 governance. They are the native currency of Web3 decentralized applications (dApps).


Tokens were once exchangeable units of value that could be purchased and used to pay for particular goods and/or services, such as tolls for roads or tokens for amusement park rides and games. Tokens were helpful to service providers in these early applications because they permitted transactions needing precise adjustments and allowed customers to prepay for services they would use in the future.

The units of value given to Web3 content creators in Web3 apps are similarly called tokens, but they are digital, programmable, and have additional uses outside trade. Tokens in Web3 can be used as investments in projects, blockchains, or protocols. The project or agreement may benefit from it, for instance, if services are paid for or insured. Additionally, it could offer a platform for taking part in the project or protocol's governance.


Application Decentralization and Smart Contracts (dApps)

On the blockchain, smart contracts are tamper-proof algorithms that enable automated transactions by using conditional software logic (eg, "if x is true, then do y"). Decentralized apps, or dApps, are made possible by programmable smart contracts; these cryptoeconomic protocols give Web3 life and place it in the hands of users.


Since dApps are not maintained by a single person or organization, but rather by the decentralized foundation of the blockchain network Architecture, they differ from the programs (apps) we are accustomed to in the Web 2.0 world and the static HTML pages in the Web 1.0 era. Complex automated systems, including peer-to-peer financial services (DeFi), data-driven insurance products, money-making games, and more, can be built using these deceptively basic, decentralized applications.


oracle

Smart contracts must interact with data and systems outside of the blockchain network in order to reach their full potential. Oracles are organizations that link blockchain technology to current systems and real-world data. They also provide crucial infrastructure for creating a uniform, interoperable Web3 environment.


The Chainlink oracle network is capable of offering substantial safe off-chain computation, such as verifiable randomness and decentralized execution for dynamic NFTs and highly automated dApps, in addition to providing financial market data on-chain to assist DeFi applications. Additionally, the oracle network will aid in enabling a fast expanding ecosystem of various blockchains and layer 2 scaling solutions to safely communicate with one another through the development of the Cross-Chain Interoperability Protocol (CCIP).


Oracles have evolved into an extension layer of the Web3 stack, offering off-chain information and services to support the development of smart contracts and cross-chain interoperability to provide seamless communication across various on-chain settings. Being a Web3 gateway to the Web 2.0 backend, Chainlink's oracle technology also enables legacy applications to communicate with any private or public blockchain. Oracles are ultimately the infrastructure that connects Web 2.0 and Web 3 by bringing the strength of decentralized computing and cryptographic assurances to current platforms.


Web 3-Apps

Web3 is a new Internet paradigm that combines decentralization and interaction so that users can communicate with one another directly and without the use of middlemen. Without the need for a central arbiter intervention, dApps let users access permissionless financial instruments, engage in peer-to-peer cryptocurrency trading, receive parametric insurance payments, purchase and sell verifiably owned digital artwork via NFTs, play value creation games, and many other activities.

With this new framework, supporters of Web3 seek to build a fairer and more accessible version of the internet where parties can communicate and conduct business directly. Real-world use cases that are redefining sectors as varied as real estate, education, finance, gaming, and healthcare are already being unlocked by Web3 applications leveraging three underlying technologies (blockchain, smart contracts, and decentralized oracle networks). These applications also have the potential to transform industries far beyond these ones.


financial independence

By the use of Web3 technology, people may design and participate in financial protocols that offer access, security, and transparency never before possible. This new economic environment is now commonly referred to as decentralized finance (DeFi).


Unlike typical financial services, DeFi protocols enable users to transact with one another directly in an open and impenetrable on-chain market. They do this by utilizing the decentralized architecture of blockchain and the secure input of oracle networks. Users can borrow money from one another thanks to decentralized financial marketplaces like Aave, which currently captures more than $12 billion in smart contract value utilizing Chainlink oracles. A strong economy is supported in part by the functioning of the money markets. On-chain money markets aid in increasing economic access, reducing single points of failure, and lowering system risk and fractional reserve practices by decentralizing control and utilizing pre-defined smart contract logic.

DeFi's composable design is a fantastic invention because it enables programmers to combine open source protocols to create more intricate financial instruments, such no-loss savings games employing mortgage protocols, decentralized stablecoins, and interest-bearing tokens. Tokens increase liquidity by putting unused money to use.

Although one of the most visible parts of Web3 at the moment is the unique financial applications made possible by DeFi, the Web3 paradigm covers every facet of the internet, from social media and entertainment to browser software, and goes far beyond financial transactions.


Gaming, NFT, and the Metaverse

In the Web3 ecosystem, NFTs, blockchain games, and metaverses are currently emerging as pillars. NFTs give digital assets verifiable ownership, enabling them to have a level of uniqueness akin to the functioning of physical objects. Similar to how two copies of the same book may be differentiated from one another by their distinctive markings and signs of specific wear, one digital item can now be differentiated from another using NFTs even though they are displayed in the same way.


Video games, metaverse apps, and digital art all stand to gain significantly from this. Now, blockchain games like Axie Infinity are driving a paradigm change in gamer economics, while NFT initiatives like The Bored Ape Yacht Club (BAYC) are gaining popularity for NFTs and digital art. The blockchain, which serves as the underpinning settlement layer, NFT smart contracts, which allow for verifiable ownership of digital assets, and decentralized oracles, which offer essential services like verifiable randomness, smart Contract automation, off-chain data, etc., are what underpin this foundational transformation.


Statistical insurance

Decentralized parametric insurance is a fascinating use case for the blockchain sector. By combining smart contracts with off-chain data entry, blockchain insurance projects like Arbol and Etherisc are presently enabling new implementations of frictionless and automated crop insurance, airline insurance, and more through Chainlink Data Feeds. Let's examine a straightforward example.


Consider a farmer who needs more than 20 inches of rain over a season to produce enough crops. Farmers use insurance as a hedge against the possibility of a poor crop. He frequently needs to go through a protracted application process in order to obtain funds, and he must rely on centralized insurance companies to confirm rains.


Yet, Web3 allows permissionless policy enforcement by anyone with an internet connection anywhere in the world. With Arbol's blockchain-based crop insurance, premiums and payment periods are automatically calculated based on predetermined criteria, and payments are issued automatically through insurance smart contracts using meteorological data from Chainlink. With a straightforward binary to determine whether farmers receive insurance funds, the insurance process is made quick and simple. Does internet of things sensors show less than 20 inches of rain during that time period? If so, immediately pay the farmer. Don't pay the farmers if you don't.

There is already operational blockchain-based parametric aviation insurance, and the model may be expanded to include fields like shipping and fire insurance.


What comes after Web3?

Chainlink co-founder Sergey Nazarov described the recent Web3 megatrend that has gained widespread acceptance in his recent Future of Chainlink talk: "When you implement cryptographic assurances in the Web3 world, what you really see is a collection of very special applications. Some of these applications go by the names DeFi, NFTs, and tokenized ownership, but these are the earliest instances of cryptographic assurances making an appearance in people's and industries' day-to-day activities.

People will switch from centralized probabilistic service providers to Web3's trust-minimized services once they comprehend the value of cryptographic guarantees.

More and more users and institutions around the world are realizing the power of zero-trust interactions and encryption-backed protocols, and the term "Web3" has become shorthand for a reimagined internet experience powered by decentralized technologies that has transformed the way we interact online, from how we invest and exchange to how we play and express ourselves artistically "With respect to trust-minimized encryption, Web3 systems have guarantees that Web 2.0 systems will never have as it gets closer to the speed, efficiency, and low cost of Web systems.


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