What Is Web3 and Why Does It Matter?
Web3 is the next evolution of the internet, built on decentralized technologies like blockchain, smart contracts, and peer-to-peer networks.
Table of contents
Web1 vs Web2 vs Web3: A Comparison
| Era | Web1 | Web2 | Web3 |
|---|---|---|---|
| Period | 1990s–early 2000s | 2000s–2020s | 2020s–future |
| Content | Static pages | Dynamic, user-generated | Programmable, decentralized |
| Ownership | Webmasters | Platforms | Users |
| Data Control | Centralized | Centralized | Decentralized |
| Monetization | Ads, e-commerce | Ads, data sales | Tokens, crypto, NFTs |
| Identity | Anonymous | Platform-based | Self-sovereign, wallet-based |
| Examples | Yahoo!, GeoCities | Facebook, YouTube | Ethereum, Uniswap, OpenSea |
Core Technologies of Web3
- Blockchain: Distributed ledger for transparent, immutable records
- Smart Contracts: Self-executing code for automation and trustless transactions
- dApps (Decentralized Applications): Apps running on blockchains, not centralized servers
- DeFi (Decentralized Finance): Financial services without banks or intermediaries
- NFTs (Non-Fungible Tokens): Unique digital assets for art, gaming, identity
- DAOs (Decentralized Autonomous Organizations): Community-governed organizations
- Decentralized Storage: IPFS, Filecoin, Arweave
- Web3 Wallets: MetaMask, Trust Wallet, hardware wallets
- Oracles: Connect blockchains to real-world data
- Interoperability Protocols: Polkadot, Cosmos, bridges
Benefits of Web3
- User ownership of data and assets
- Privacy and censorship resistance
- Open, permissionless innovation
- Global access and financial inclusion
- Programmable money and digital identity
- Community-driven governance (DAOs)
- Transparency and auditability
Risks and Challenges
- Scalability and high transaction fees
- User experience and onboarding complexity
- Security risks (hacks, scams, bugs)
- Regulatory uncertainty
- Fragmentation and interoperability issues
- Energy consumption (some blockchains)
- Speculation and volatility
Web3 Use Cases and Examples
- DeFi: Uniswap, Aave, Compound
- NFT Marketplaces: OpenSea, Rarible, Foundation
- Gaming: Axie Infinity, Decentraland, The Sandbox
- Social Media: Lens Protocol, Farcaster
- DAOs: MakerDAO, ENS DAO
- Identity: ENS, decentralized IDs
- Storage: Filecoin, Arweave
- Metaverse: Decentraland, The Sandbox
FAQ: Web3
What is Web3?
Web3 is a decentralized version of the internet where users control their data, assets, and identity using blockchain and peer-to-peer technologies.
How is Web3 different from Web2?
Web2 is centralized and platform-driven, while Web3 is decentralized, user-owned, and powered by blockchain.
What are the main technologies behind Web3?
Blockchain, smart contracts, dApps, DeFi, NFTs, DAOs, decentralized storage, and wallets.
What are the risks of Web3?
Risks include security vulnerabilities, scams, regulatory uncertainty, and user experience challenges.
Further Reading & Internal Links
Web3 is reshaping the internet by giving power back to users, enabling new business models, and fostering innovation. Understanding its technologies, benefits, and risks is crucial for anyone interested in the future of the digital world.