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The first website in history was created in 1991. You can still see it online today.
The Internet has evolved enormously since these beginnings and today has more than 5 billion regular users, or approximately 63% of the world’s population.
Some people believe that a new paradigm for the Internet is coming, called Web 3.0, also often referred to as Web3. They claim that a set of next-generation technologies could disrupt society, just as Web 1.0 did in the 1990s.
Despite these lofty claims, the concept of Web 3.0 can be both confusing and elusive. Let’s take a closer look at the claims and criticisms of Web 3.0 to better understand what it is all about.
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Web 1.0: the static Web
The first version of the Internet is sometimes called the “Static Web”. It was made up of read-only web pages that overall lacked a lot of interactive features.
Web 1.0 offered little beyond browsing static pages. Content generation was handled by a select few and information was hard to come by.
Web 2.0: the dynamic Web
In October 2004, O’Reilly Media and MediaLive hosted the first Web 2.0 conference to highlight a host of new software applications built on the Web.
At the end of 2005, YouTube was launched. The video-sharing site played an important role in the Web 2.0 revolution, which marked the Internet’s transition to an era of dynamic content. Users could now interact with web pages, communicate with each other and create content.
For many, the greatest symbol of this era is the emergence of social networks. Smartphones soon followed, with the first iPhone released in 2007.
Before long, we were all creating, sharing, and commenting on content instantly from the palm of our hands. If Web 1.0 was the read-only iteration, Web 2.0 could be thought of as the read/write upgrade, or what we call the Internet today.
What is Web 3.0?
This brings us to Web 3.0. Think of it as the “read/write/ownership” upgrade to the Internet.
Because it is above all a set of ideas, it is difficult to establish a precise definition of Web 3.0. For cryptocurrency developers and enthusiasts, Web 3.0 incorporates the technologies and concepts that are at the heart of crypto: decentralization, token-based economies, and blockchain.
This vision of Web3 tends to be a more democratic version of today’s online world. It centers around the idea of ownership, removing control from dominant big data corporations and other central authorities and handing it over to the masses. This is what is meant by decentralization.
Decentralization means that Internet users can carry out peer-to-peer transactions, eliminating intermediaries and removing the power of controlling entities. There is more emphasis on privacy, transparency, and user ownership.
This is where blockchain technology and cryptocurrency come in. Cryptocurrencies and the token economy facilitate this model of decentralization, allowing information to be stored on a distributed ledger outside the remit of any entity. control.
Despite claims of democratization made by some crypto projects, with token holders able to participate in governance, a widespread criticism of Web 3.0 is that control is concentrated among venture capitalists and early adopters.
Web 3.0 technology
The future development of Web 3.0 could take many different paths. Here are some of the Web3 technologies we’re starting to see deployed today:
DeFi: Decentralized Finance
One of the most intriguing sectors is DeFi, which is short for decentralized finance.
DeFi aims to revolutionize the financial industry, removing the need for central authorities such as banks, payment processors, and other intermediaries. In their place would be a peer-to-peer financial system that lives on the blockchain.
Proponents argue that this approach would reduce fees, increase transaction speeds and allocate capital more efficiently.
As with most web3 applications, there would also be increased transparency, as all loan amounts, collateral, and other data are available for anyone to see on publicly accessible blockchains.
Importantly for some jurisdictions, accessibility is also improved. DeFi would be accessible to anyone with an internet connection, without the need for paperwork or third-party verification.
Most of what banks and other financial intermediaries offer can be done through DeFi, its proponents claim. This includes bank deposits, lending and borrowing, asset trading, and insurance, among others.
Some examples of popular DeFi protocols include Uniswap (UNI), Aave (AAVE), and Chainlink (LINK), which are designed to conduct financial transactions.
NFT: non-fungible tokens
Non-fungible tokens (NFTs) are a class of digital assets that live on the blockchain.
Each NFT is unique (non-fungible) and no two NFTs are the same. This contrasts with, say, dollars, which are fungible – a dollar is exactly the same as any other dollar.
Advocates see a wide variety of potential use cases for NFTs, but to date the only widespread use has been for digital artwork. As the crypto market accelerated towards the moon in 2021, multi-million dollar sales of digital art NFTs were commonplace.
But as the crypto winter set in in 2020, the NFT market crashed. Professional investors and art world critics have called NFTs nothing more than a speculative bubble.
The crypto world hasn’t given up on NFTs, and Web3 proponents consider them useful for verifying intellectual property, authenticating documents, and various crypto gaming features.
“NFTs could change several different aspects of our daily lives, such as tamper-proof identification, concert ticket sales, and much more,” says Giorgi Khazaradze, CEO of crypto-trading platform Aurox. “For now, however, NFTs remain extremely speculative.”
Many types of traded cryptocurrencies support NFTs on their blockchains. Some examples include Ethereum (ETH), Solana (SOL), and Avalanche (AVAX), to name a few.
DAO: Decentralized Autonomous Organization
Decentralized Autonomous Organizations (DAOs) may sound complicated, but the underlying concept is simple. A DAO is a group formed for a common purpose, with its rules, plans, and goals all encoded on the blockchain.
DAOs are controlled by their members. Proponents claim that a DAO has no hierarchy, no bureaucracy, and no bureaucracy. Most often, they operate based on a democratic structure, where votes are cast based on the number of crypto tokens users hold.
“What makes a DAO attractive to many users is that all financial transactions are recorded on a blockchain, which eliminates any third-party involvement,” says Felice Gorodo, CEO of eMerge Americas.
“Instead, transactions go through non-modifiable and transparent smart contracts. Breaking away from the traditional vertical corporate structure of executives, boards, and investors, a DAO allows all members to get involved and vote on whether changes need to be made,” says Gorodo.
How to invest in Web 3.0
Futurists say Web 3.0 will become an essential part of the ever-evolving Internet. If this vision materializes, it could unlock speculative potential for investors and developers.
If you believe in seeing the future, buying cryptocurrency is an easy way to gain exposure to Web3. You can buy cryptocurrencies that support DAO and DeFi protocols or buy digital art in the form of NFTs.
Remember that Web 3.0 is in its infancy. Investments of this nature are highly speculative and should be discussed with a financial adviser.