Web 3.0 Explained: Everything You Need To Know

“Web 3.0!” A concept that has snatched the spotlight as the new phase of the internet.

With so much hype around Web 3.0 recently, there is no doubt you have heard about how it is changing the internet and enriching crypto lovers.

So, what exactly is Web 3.0? Why is there so much hype around it, and how are crypto traders profiting from it?

Today, I will answer all of your Web 3.0-related questions.


Post Summary

This is what I intend to cover;

  1. What Is Web 3.0?
  2. Web 1.0 vs. Web 2.0 vs. Web 3.0
  3. Features Of Web 3.0
  4. How To Invest In Web 3.0
  5. Top Web 3.0 Projects And Cryptocurrencies
  6. Future Of Web 3.0
  7. Conclusion

Each of the items has a jump link attached to it. Feel free to use it and skip ahead to the subheading that interests you the most.

The information in this post is simplified in a way that even a 8-year-old baby will understand.

All set? Let’s dive in!


1. What Is Web 3.0?

Web 3.0

Also known as “Web3” for short, it is a concept perceived as the third generation of the web.

Web 3.0 aims to decentralize users’ experiences with the internet by removing central authority and placing users in full control.

To keep things simple, I would like to refer to Web 3.0 as the rebirth of the internet, where users are in full control of their data and how they use the internet.

Now, imagine a Facebook that is powered by you instead of Mark Zuckerberg.

You can post any content you feel like without getting banned, and you can choose to view ads or not.

Additionally, you can participate in the decision-making process that will influence how Facebook is run and even get rewarded for using Facebook. Isn’t that amazing!

Now, this is only an aspect of Web 3.0 found in the crypto space.

Web 3.0 was originally referred to as the Semantic Web, a word first coined by Tim Berners-Lee.

This simply means the ability of the internet to process information in a smart, human-like fashion. Take the popular Siri, for instance: Siri is a product of Web 3.0.

However, Web 3.0 now goes well beyond this idea.

This is only an overview of Web 3.0. Scroll down to the next section where I explain it better.


2. Web 1.0 vs Web 2.0 vs Web 3.0

To fully understand the concept of Web 3.0, let’s briefly compare the three (3) stages of the internet.

The comparison at a glance:

Web 1.0Web 2.0Web 3.0
Read-onlyRead and writeRead-write and own
Static CentralizedDecentralized

A. Web 1.0

This was the first phase of the internet regarded as the “static” and “read-only” phase of the internet.

Now, back in the 1990s, the internet was more like an online encyclopedia.

We could only read the information displayed on web pages.

Users like you and me were unable to express our opinions, like, or interact with a website except through mails.

Furthermore, Apps that were available were closed-source; users could download the app but can’t see how the application works or modify it.

B. Web 2.0

Then came Web 2.0 around 2005. Web 2.0 is the second phase of the internet.

It is considered the social web or the read-and-write web.

In Web 2.0, the internet became interactive. We were no longer mere consumers but can read, write and freely share files on the internet.

For instance, you can comment on or like this post, all thanks to Web2!

You must be familiar with Web2 applications as they include Facebook, Google, Twitter, WordPress, Instagram, Quora, Tiktok, Bolt, etcetera.

Furthermore, some Web2 applications like WordPress were open-source, while some were closed-source.

However, the issue with Web2 is “Centralization.”

Think about it: Facebook, Google, Youtube, and even Bolt can ban you from using their services.

Most of these companies collect your data and sell it for targeted advertisements, enriching only themselves and without your consent.

C. Web 3.0

As mentioned earlier, Web3 is the next evolution of the internet.

Generally, Web3 is tied to decentralization, where users would not only read and write but also become owners of the internet.

It also focuses on creating AI apps and websites that could process information tailored to users’ needs.

Web3 seems to flourish the most in the crypto space.

For the purpose of this post, I will only be focusing on Web 3.0 in the crypto space.


3. Features Of Web 3.0

These are some of the impressive features of Web 3.0 found in the crypto space.

Blockchain

Crypto Web3 applications are called Dapps, short for “Decentralized Applications“.

They are built on a distributed ledger called the Blockchain.

Impressively, this allows these Dapps to be open-source, transparent, and permissionless.

Dapps are built on Ethereum, Harmony, Fantom, BSC, NEO, Solana, and some other blockchains that support Dapps.

Smart Contract

Smart contracts are written codes that automate transactions on the blockchain.

Dapps removes central authorities and replaces them with a Smart Contract.

For instance, instead of Mark Zuckerberg serving as the middle man, you interact directly with a smart contract.

Let’s look at some of the ways this works out in the crypto space.

  • Uniswap is a Dapp that allows you to buy cryptocurrency from a liquidity pool through a smart contract.
  • NFT artists receive their loyalties through a smart contract instead of a middle man.

Decentralization

Decentralization is at the forefront of Crypto Web3.

Firstly, remember that I talked about the blockchain earlier.

It is a peer-to-peer network that distributes data across all nodes. This ensures that data is decentralized and not held on a single server.

What I mean is that everyone can have access to data and not just the central authority.

Secondly, there is no single point of failure.

This means that even if one of the nodes breaks down, it will not affect the network because the rest of the nodes are still powering it.

If you can recall, as of 2021, Facebook and its related apps went down for 6 hours. Now, this is because they are all based on a single server.

It would not have happened with a crypto project like Theta (more about this later).

Cryptocurrency

On crypto Web3, cryptocurrencies are used to facilitate crypto transactions.

They are also used for governance and to reward users as network owners.

DAO

A DAO is used in crypto web3 to allow every user to contribute to every decision that will determine how it operates.

DAO is short for Decentralized Autonomous Organization.

It is a protocol that lets community members govern themselves without a central authority.

Anonymous

Most crypto Web3 does not require your personal data before you can use them.

When using Dapps like Uniswap, PancakeSwap etcetera, you sign up with your wallet.

This is what a wallet address looks like:

terra1g95gas9vz7jqtv2nfdpux8nhxm0h2quv08zsnu

Interoperability

Interestingly, most crypto Web3s feature cross-chain and interoperability options. This also boils down to decentralization.

For instance, users can interact with Dapps built on one blockchain on another blockchain.

They can also move gaming assets from one game to another, and impressively, these gaming assets are tokenized.

Other features of Web3 include AI, machine learning, ubiquity, etc.

But to keep on track with the purpose of this article, we won’t be discussing those.

Note:

The list you see above is the general features of crypto Web3s. Some crypto Web3 might not have all of these features.

Head over to the next section!


4. How To Invest In Web 3.0

The cryptocurrency space offers investors golden opportunities to profit from Web3.

Now, I am going to talk about five (5) ways you can invest in Crypto Web3.

Metaverse

The Metaverse has become an explosive niche in the crypto space.

As an investor, you can profit from this niche through the following ways:

  • Participate in play-to-earn game and earn tokens in reward
  • Make money by lending your assets to fellow gamers
  • Buying virtual lands and gaming assets at a low price and then selling them high
  • Investing in Metaverse tokens.

Axie Infinity, Decentraland, Everdome, Metahero, Sandbox, Enjin are some of the metaverse projects in the crypto space.

Impressively, these metaverse worlds are created with 3D graphics, which is also a feature of Web3, as opposed to the 2D graphics we have in Web2.

Content Creating

If you are a digital content creator, then here is an opportunity for you to make money from your content with less burden.

Platforms like Theta and Flixxo are crypto Web3 projects for content creations.

Either as a content creator or just a viewer, you are rewarded for making use of the network. Pretty mind-blowing!

Defi

Defi is also a promising crypto Web3 investment opportunity.

The following are ways to invest in Defi:

  • Providing liquidity to a liquidity pool
  • Lending out your asset to Defi lending and borrowing protocols like Aave and Compound
  • Yield farming, liquidity mining and staking

I explained how to make money with Defi in this video.

NFT

NFT is now the most trending topic in the Web3 crypto space.

NFT is an acronym for non-fungible tokens.

You can invest in NFT in the following ways:

  • Flipping NFT; buying an NFT at a low price and selling at a high price
  • Becoming an NFT artisit. I discussed how to bcome an NFT artist in this post.

Learn more about NFT here.

Investment DAO

Apart from decision-making (as previously discussed), a DAO can be created for investment, what we call the Investment DAO.

The simplest way to explain Investment DAO is this:

Imagine it to be a community of people that collectively source potentially-profitable early crypto projects and invest in them for a massive profit.

BitDAO, PleasrDAO, and BeetDOA are some of the investment DAO already in the crypto space.

You can create your Investment DAO or join an existing one.

I discussed the top 5 Web3 projects below. Scroll down; you may not want to miss it.


5. Top Web 3.0 Projects And Their Cryptocurrency

These 5 are my top picks!

1. Axie Infinity

Axie Infinity in Web 3.0

Axie Infinity is an NFT game built on the Ethereum network.

It was created in 2018 by Sky Mavis and a team of five experts in crypto and games.

Axie Infinity is one of the most popular Crypto Web3 metaverse projects.

AXS and SLP tokens are the native tokens of Axie Infinity.

You can buy Axie Infinity tokens on these crypto exchanges:

Learn more about Axie Infinity from these posts:

2. Theta

Theta in Web 3.0

Theta is a decentralized video streaming blockchain network built by Sliver.tv renamed Theta.tv.

It was founded by Mitch Liu and Jieyi Long in 2019.

Video streaming on the Theta network is powered by users from all around the world.

THETA and TFUEL are the two tokens that are native to this platform.

Exchanges to buy THETA and TFUEL include:

Read the full review of Theta.

Chainlink in Web 3.0

It is a decentralized blockchain oracle founded in 2017 by  Sergey Nazarov and Steve Ellis.

Chainlink connects blockchain to external API to source for assets prices, data feeds, and other payments made in the real world.

It is open-source and allows node operators from anywhere to participate in providing data for smart contracts.

The LINK token is Chainlink’s native token and its used to incentivize participants of the network.

Exchanges to buy LINK include:

4. Audius

Audius in Web 3.0

Audius is a decentralized music streaming and sharing protocol built on the blockchain.

Roneil Rumburg and Forrest Browning launched it in 2019.

Audius was created to enable artists to receive their due for their music.

It tries to connect artists directly to their fans, and reward them with the AUDIO token.

Top exchanges to trade AUDIO are:

Read the full review of Audius.

5. Brave

Brave in Web 3.0

Brave is a private web browser based on the Chromium engine.

Unlike its counterparts like Chrome and Firefox, Brave offers a Web3 browser where users are in full control of their data.

The Brave browser is not built on the blockchain.

But it uses a blockchain-based currency, Basic Attention Token (BAT), to incentivize users.

Users can choose to watch ads to earn BAT. They can also tip content creators with their BAT tokens.

BAT is built on the Ethereum blockchain and you can buy it from the following exchanges:

Continue to the next section.


6. Future Of Web 3.0

To discuss the future of Web 3.0, I would like to first talk about its advantages, challenges, and criticisms.

Advantages

  • Improved browser experience.
  • Privacy and security.
  • It’s transparent and open source.
  • Users are in charge and are rewarded as well.
  • No one can block you or deny you access to the service.

Challenges

  • Scalability: Most crypto Web3s are built on a blockchain with low transaction throughput. Then there is the issue of the Scalability trilemma and high gas fee.
  • Complexity: Participating in most crypto Web3s requires that users own Web3 wallets like Metamask, Trust Wallet or other tools that an average user may not be familiar with.
  • Hackers: There have been cases of hackers who exploit the open-source nature of Crypto Web3.
  • Not entirely centralized: Although, Crypto Web3s are built with decentralized protocol, they still rely on a centralized web host to function.

Criticisms

Jack Dorsey’s Tweet

As of late 2021, Jack Dorsey made a tweet about how the Web3 is “ultimately a centralized entity with a different label.”

According to him “The VCs and LPs control Web3”.

My Take:

Jack might not be far from the truth, and here are some of the reasons:

To begin with, the majority of Web3 is still centralized.

For instance, Theta announced that it had “suspended a significant number of user accounts.”

Also, Theta has terms of use that censor what users can and cannot publish.

Secondly, remember when I said that cryptocurrencies are used for governance in Web3?

Now, the bulk of these tokens is owned by the VCs backing up the project. The bad thing is that they may use it in ways that benefit only themselves.

However, I still have objections:

  • Even though the case of suspension might not seem like decentralization, it is nonetheless the right thing to do to protect the rights of other users. However, I hope that things like this will be done in a more decentralized manner in the future.
  • There is always a vesting schedule to control the amount of crypto held by VCs at the early stage. Moreover, they too are in the interest of long-term success.
Elon Musk

Elon Musk, the multibillionaire, sees Web3 as more of a marketing stunt than reality.

His thoughts on Web3 may be found in this interview as well as in his tweet, which can be found here.

In general, we are still in the blink of Web3, with the majority of its features already playing out in the crypto space.

However, the vast majority of the internet space is still centralized, and we are still very much in the Web2 phase.

Also, in my view, I do not think that Web3 will ultimately replace Web2.

Instead, I envision a greater aspect of Web3 being merged or integrated into Web2.

Nevertheless, only time will tell whether Web3 will completely supplant Web2.


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Conclusion

This brings us to the end of today’s article.

As earlier mentioned, Web3 is still in its early stages.

But I believe we will reach a tipping point where everything we do with the internet will be geared towards decentralization and greater user experience.

Having said that, I would like to hear your opinion as well.

What do you have to say about Web 3.0?

Do you think it will entirely replace Web 2.0 in the future?

You can share your opinion in the comments section below.

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