Understanding Emerging Tech Trends: Exploring web3

By Adedayo Ebenezer Oyetoke Published on: February 26th 2024 | 10 mins, 1837 words Views: 206



The internet has changed a lot since its inception, from static web pages to interactive social media platforms. But what is the next stage of internet development? How will it affect the way we communicate, create, and exchange value online? In this blog post, we will explore the concept of web3, an idea for a new, decentralized, and user-owned web.

What is web3 and why is it important?

The term web3 was coined by Gavin Wood, one of the co-founders of Ethereum, a blockchain-based software platform, in 2014¹. Web3 is a vision for a new iteration of the World Wide Web that incorporates concepts such as decentralization, blockchain technologies, and token-based economics². Some technologists and journalists have contrasted it with web2, the current web dominated by large technology companies that provide services in exchange for users' personal data³.

Web3 aims to give power back to the users in the form of ownership, control, and privacy. Instead of relying on centralized intermediaries, web3 applications run on peer-to-peer networks that are secured by cryptography and incentivized by tokens. Users can create, share, and monetize their own content and data, without giving up their rights or identity. Web3 also enables new forms of collaboration and innovation, such as decentralized autonomous organizations (DAOs), non-fungible tokens (NFTs), and decentralized finance (DeFi)⁴.

How does web3 work?

Web3 is not a single technology, but a collection of protocols, platforms, and applications that share some common principles and goals. One of the core components of web3 is blockchain, a distributed ledger that records transactions and data in a transparent, immutable, and verifiable way. Blockchain enables trustless and permissionless interactions among users, without the need for intermediaries or authorities. Blockchain also allows users to create and exchange digital assets, such as cryptocurrencies and NFTs, that have unique properties and values⁵.

Another key component of web3 is smart contracts, self-executing agreements that run on blockchain and enforce the rules and logic of transactions and applications. Smart contracts enable users to create and participate in various decentralized applications (dApps) that offer various services and functions, such as lending, borrowing, trading, gaming, voting, and more. Smart contracts also enable users to form and join DAOs, which are organizations that are governed by code and collective decision-making, rather than by hierarchies or institutions.

Web3 also leverages other technologies and standards, such as peer-to-peer networks, distributed storage, encryption, identity systems, and interoperability protocols, to create a more open, secure, and resilient web. For example, peer-to-peer networks allow users to communicate and share data directly with each other, without relying on centralized servers or platforms. Distributed storage systems allow users to store and access their data across multiple nodes, without sacrificing performance or security. Encryption and identity systems allow users to protect their privacy and prove their identity, without revealing unnecessary information or relying on third parties. Interoperability protocols allow users to connect and exchange data and value across different blockchains and networks, without losing compatibility or functionality.

What are the benefits and challenges of web3?

Web3 offers many potential benefits for users, developers, and society as a whole. Some of the main benefits are:

User empowerment: Web3 gives users more control and ownership over their own data, content, and assets. Users can decide how to use, share, and monetize their online resources, without being exploited or manipulated by centralized entities. Users can also benefit from the network effects and value creation of web3 applications, by earning tokens or rewards for their participation and contribution.

Innovation and diversity: Web3 enables new forms of creativity and collaboration, such as NFTs, DAOs, and DeFi, that challenge the status quo and offer new possibilities and opportunities for users and developers. Web3 also fosters a more diverse and inclusive web, by lowering the barriers to entry and access, and by enabling users from different backgrounds and regions to interact and cooperate on a global scale.

Security and resilience: Web3 enhances the security and resilience of the web, by reducing the risks of censorship, corruption, fraud, and hacking. Web3 applications run on decentralized networks that are more difficult to attack or manipulate, and that can operate without interruption or downtime. Web3 also leverages cryptography and encryption to protect the privacy and integrity of users' data and transactions.

However, web3 also faces many challenges and limitations that need to be addressed and overcome. Some of the main challenges are:

Usability and adoption: Web3 is still in its early stages of development and adoption, and many users may find it difficult or intimidating to use. Web3 applications often require users to have technical knowledge and skills, such as managing private keys, wallets, and tokens, and to deal with complex and unfamiliar interfaces and terminologies. Web3 also suffers from scalability and performance issues, such as high fees, slow transactions, and limited throughput, that may deter users from using it.

Regulation and governance: Web3 operates in a largely unregulated and uncertain legal environment, and may face resistance or opposition from regulators, governments, and incumbents. Web3 applications may pose legal and ethical challenges, such as compliance, taxation, liability, and dispute resolution, that need to be clarified and resolved. Web3 also raises questions about the governance and accountability of decentralized systems, such as who makes the decisions, who enforces the rules, and who bears the responsibility.

Sustainability and social impact: Web3 consumes a significant amount of energy and resources, especially for blockchain networks that use proof-of-work (PoW) consensus mechanisms, such as Bitcoin and Ethereum. Web3 may have negative environmental and social impacts, such as carbon emissions, resource depletion, and inequality, that need to be mitigated and balanced. Web3 also faces ethical and moral dilemmas, such as how to ensure fairness, justice, and human rights in a decentralized and automated web.

What are some examples of web3 applications?

Web3 is not a hypothetical or futuristic concept, but a reality that is already happening and growing. There are many examples of web3 applications that are already live and operational, and that offer various services and functions for users and developers. Here are some of the most popular and prominent examples:

Ethereum: Ethereum is the leading platform for web3 development and innovation, and the second-largest cryptocurrency by market capitalization. Ethereum enables users to create and run smart contracts and dApps, and to interact with various web3 applications and protocols. Ethereum also supports the creation and exchange of various tokens, such as ether (ETH), the native currency of the network, and various ERC-20 and ERC-721 tokens, such as stablecoins, utility tokens, and NFTs.

Metamask: Metamask is a browser extension and mobile app that allows users to access and use web3 applications and protocols. Metamask acts as a gateway and a wallet for web3, enabling users to connect to various blockchain networks, such as Ethereum, Binance Smart Chain, and Polygon, and to manage their accounts, keys, and tokens. Metamask also allows users to swap tokens, send and receive payments, and sign transactions and messages.

Uniswap: Uniswap is a decentralized exchange (DEX) that allows users to trade tokens without intermediaries or fees. Uniswap uses an automated market maker (AMM) model, where users provide liquidity to pools of tokens, and receive fees and rewards for their contribution. Uniswap supports the trading of any ERC-20 token, and also allows users to create their own tokens and pools. Uniswap is one of the most popular and widely used web3 applications, with over $3 billion of daily trading volume.

OpenSea: OpenSea is a marketplace for NFTs, where users can buy, sell, and discover digital collectibles, such as art, music, games, sports, and more. OpenSea supports various NFT standards and platforms, such as ERC-721, ERC-1155, and Flow, and hosts thousands of collections and millions of items. OpenSea is the largest and most active NFT marketplace, with over $10 billion of total sales volume.

MakerDAO: MakerDAO is a decentralized lending platform that allows users to borrow and lend stablecoins, such as DAI, which are pegged to the US dollar. MakerDAO uses a system of smart contracts, collateral, and governance tokens, such as MKR, to maintain the stability and security of the platform. MakerDAO is one of the pioneers and leaders of the DeFi movement, with over $7 billion of total value locked.

Aave: Aave is another decentralized lending platform that allows users to borrow and lend various cryptocurrencies, such as ETH, USDC, WBTC, and more. Aave uses a system of liquidity pools, interest rates, and flash loans, to enable users to access and provide liquidity in a flexible and efficient way. Aave also introduces innovative features, such as collateral swapping, credit delegation, and liquidity mining, to enhance the user experience and incentives. Aave is one of the most popular and widely used DeFi platforms, with over $15 billion of total value locked.

Compound: Compound is a decentralized lending platform that allows users to borrow and lend various cryptocurrencies, such as ETH, USDC, WBTC, and more. Compound uses a system of supply and demand, interest rates, and governance tokens.

How can I get started with web3 development?

Web3 development is an exciting and growing field that involves building decentralized applications (dApps) that run on blockchain networks and use various web3 technologies and protocols. To get started with web3 development, you will need to learn some basic concepts and skills, such as:

Blockchain: A distributed ledger that records transactions and data in a transparent, immutable, and verifiable way. Blockchain enables trustless and permissionless interactions among users, without the need for intermediaries or authorities.

Smart contracts: Self-executing agreements that run on blockchain and enforce the rules and logic of transactions and applications. Smart contracts enable users to create and participate in various dApps that offer various services and functions, such as lending, borrowing, trading, gaming, voting, and more.


Cryptocurrencies and tokens: Digital assets that have unique properties and values, and that can be created and exchanged on blockchain networks. Cryptocurrencies and tokens can be used as currencies, utilities, rewards, collectibles, and more.

Web3.js: A JavaScript library that allows developers to interact with blockchain networks and smart contracts from web browsers and applications. Web3.js provides various methods and functions to connect, query, and transact with web3 applications and protocols.

There are many resources and tutorials available online that can help you learn and practice web3 development. One of the best places to start is Web3 University, a comprehensive educational resource on blockchain development with the most useful tutorials across the web3 ecosystem. Web3 University brings together organizations across web3 to create the largest community for blockchain education.

Another great resource is Alchemy University, a free and interactive video course that teaches you how to build and interact with web3. Alchemy University includes a 7-week Ethereum Developer Bootcamp, a JavaScript for Ethereum course, and a brand new Learn Solidity course. Alchemy University also provides starter code, quizzes, and projects to help you master web3 development.

Source:
(1) Web3 - Wikipedia
(2) What is Web3 and why is it important? | ethereum.org
(3) What Is Web3? (+ How Does It Work?) - Coursera.
(4) Web2 vs Web3 | ethereum.org.
(5) What Is Web3 and How Will it Work? | PCMag. 

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