UNDERSTANDING WEB3 (History, Components, Strengths And Weaknesses)
PREAMBLE
Good morning friends on #Hive and #leofinance, I hope this meets you well.
History of Web 1.0, Web 2.0 and Web 3.0
From etymology, World Wide Web was created in Coren, Jeneva in 1989 by Tim Berners-Lee. This idea created an open decentralized protocol which will facilitate the sharing of information from all parts of the world.
Web 1.0 lasted between 1990 -2004. It was a static website, that is owned by companies. There was almost zero interaction with users. Reasons it was referred to as read only web. Web 2.0 was therefore birthed from the hunger and thirst for a more interactive website.
Web 2.0 have been in existence from 2004 till date.
This era began in 2004 with the birth of many social media platforms. As against the read only web of Web 1.0, it became read and write web. This made companies to now provide a platform for users to share their contents and interact amongst themselves.
As many more people joined, the companies started controlling what one may refer to as a inappropriate traffic generated in the Web.
This Web 2.0 also birthed the advertising driven revenue we have today. Here, Users create contents they don't own nor benefits from, reasons for Web3.
The foundational statement of Web3 was made by Gavin wood (a cofounder of Ethereum) shortly after the lunch of Ethereum in 2014.
He tried to write about the problems early crypto adopted felt.
What is Web3?
Web3 is being perceived as the future of the internet. The vision for this new, blockchain-based web includes cryptocurrencies, NFTs, DAOs, decentralized finance, and more. It offers a read/write/own version of the web, in which users have a financial stake in and more control over the web communities they belong to. Web3 promises to transform the experience of being online as dramatically as PCs and smartphones did. It is not, however, without risk. Some companies have entered the space only to face a backlash over the environmental impact and financial speculation (and potential for fraud) that comes with Web3 projects. And while blockchain is offered as a solution to privacy, centralization, and financial exclusion concerns, it has created new versions of many of these problems. Companies need to consider both the risks and the benefits before diving in. Source
Before now, centralization have helped in the onboarding of millions of users to the World Wide Web. This is the base for the large and stable online infrastructure we enjoy today.
However, people controlling some of these centralized entities have access to large swatches of the World Wide Web. These information they have, they can decide to use at will. For example, in the recent past, it was rumored that the CEO of Facebook was willing to sell confidential information of people for money.
Leaked internal Facebook documents show that the plans to sell access to user data were discussed for years and received support from Facebook’s most senior executives, including CEO Mark Zuckerberg and chief operating officer Sheryl Sandberg. Source
Web3 or Web 3.0 is an emerging internet that will speedily take over from Web2. Its strength is vested on its decentralized nature of computing . This is possible because of its Blockchain base, which is dependent on Blockchain technology.
Web3 internet is a more modern technology that has an upper hand over Web2. It is said to have the upper hand now because it restored the privacy and control of the internet space to users.
However, since it's emergence, Web3 have been widely accepted by all internet enthusiasts, even as it's applications are still at infancy, yet to be developed while others are still on paper. (theoretically).
Source
COMPONENTS OF WEB3
Web3 is made of different components, I would discuss them below.
* Smart contract
They are scripts that execute special actions automatically between two parties. They do not need contract signing nor does it involve any form of legal language. It only involves codes that executes actions once specific conditions are met.
* Blockchain technology
This is the most important aspect of web3. They provide tamper resistant ledger for different purposes. They also provide decentralized technology. Example of it, is cryptocurrency, Bitcoin and Ethereum.
*Decentralized applications (DApps)
These are software applications on Blockchain networks as against centralized networks. Most times, they have open-source codes. Their operations are truestless based.
* Oracles
Oracles are very important for the interaction of smart contracts with external data sources. They provide real world data to Blockchain based smart contracts.
* Interoperability protocols
They are developed to facilitate data exchange between different Blockchain networks and DApps.
* Decentralized storage
Decentralized storage solutions like IPFS are often employed to store data in a decentralized and distributed manner.
* Government mechanisms
In Web3, decisions about the upgrade of protocol and changes are made collectively by holders of a token (shareholders), decentralized government models are incorporated.
* Web3 protocols
They are the basic protocols and standards that enable interaction within the Web3 ecosystem.
* Government and community tockens
Certain web3 projects issues tokens that allows their holders to participate in the decision making.
* Security measures and privacy
Strong security and privacy features are essential in web3. This is of utmost importance because of the protection of user's assets and data. Most times, zero knowledge proof and inscription are employed.
* Consensus mechanism
For validation and security of transactions, many Blockchain networks use consensus algorithm like proof of work and proof of stake.
* Token standards
Token standards for fungible (ERC 20) and non fungible (ERC 721) tokens are mostly used to manage digital assets in Web3.
* Decentralized identity (DID)
This system allows users to manage their data and digital identity. It is left for them to decide when and how much information they want to disclose to the general public.
* Web3 wallets
This is a bridge commenting users and Blockchain networks. It is a digital wallet that allows a users to manage their digital assets with DApps. They also store the private keys of users.
* Cryptocurrencies and tokens
Cryptocurrency is an integral part of web3. Cryptocurrencies like Bitcoin and Ethereum are used for exchange and settlement on Web3. They are also used to measure value.
BASIC WEB3 IDEAS
Decentralized
Here, control is not vested on one person or group of persons to control large swatches. But on individual users and builders.
* No third parties
Web3 does not depend on third parties, but it operates using economic mechanisms and incentives.
* You don't need permission from anyone.
Here, all users have equal rights and access to the internet.
*Payment method
In Web3, payment and receiving of money is by the use of cryptocurrency, not the use of banks or fiat.
IMPORTANCE OF WEB3
Decentralization
Reliance on any centralized body is reduced to it's minimum. This helps in the mitigation of issues like single point of failure, data monopolies and censorship.
User control
Here, the users have control of how much data and when to share them to the general public. They have total ownership and control of their online identities.
* Security
Here, encryption methods and data storage makes it very difficult to hack or breach users ledgers or data, because of cryptocurrency and Blockchain technology.
* Transparency
The transparent nature of Blockchain technology is the reason all the transactions and actions within the Blockchain are in the public space for scrutiny. This have increased the trust and confidence of people.
* Here, there is privacy of users. A user can be allowed to interact with DApps without disclosing sensitive personal details. This helps to promote online privacy.
* Ownership and monetization
A user owns and controls his or her profile solely. You can own a digital asset and monetize them at will, without having to depend solely on any centralized body for monetization.
* It is accessible globally
This means that anyone with internet connection can have access to it, irrespective of race, color, language etc.
* Resilience
Decentralized systems like Web3 are very resilient and more susceptible to failures like single point failure.
* Innovation
Web3 is very open to great minds to think and innovate. Developers are allowed to build on existing protocols which will foster innovation and competitive landscape.
LIMITATIONS OF WEB3
Even as web3 has lots of advantages, it also has disadvantages and areas of improvements.
They may include;
* Scalability
Many Blockchain networks have scalability issues including Ethereum. This leads to low processing speed. Then in times of high demand, it leads to high processing cost.
* Complexities
To new users, Web3 can be very complex to use and understand. Things like; keys, gas fees, can be confusing even as it is intimating.
Absence of legal protection
Because of its decentralized nature, at the event of fraud or or dispute between two individuals or users, there are no legal standing to resolve issues.
* Loss of password
If for any reason, a user looses his password, their digital assets may be permanently lost without any options of recovery.
* User responsibility
Because users are in total control of their profile, the security of their assets are also their responsibility. This will be difficult and challenging for those that are not grounded on cyber security.
* Adoption barrier
People in some parts of the world may find it difficult adopting Web3 because of barriers like; education, power supply, infrastructure and access to modern technologies.
* Irreversible transaction
The immutable nature of Blockchain translates to the fact that transaction consumated erroneously or transactions suspected to be fraud can't be reversed. They are tantamount to financial loss.
* Data privacy
While this has advantages, it also has it's disadvantage. One can leverage on this and carry out illegal activities.
* High energy consumption
Blockchain technologies that use proof of work consumes high amount of energy which makes it expensive and unhealthy for out environment.
PARTING WORDS
While we start the journey into the all interesting world of Web3, one can only imagine all that humanity is about to benefit therein. When non of the tech companies do not have control over our online spaces, what we can achieve at that rate would be mind blowing.
However, there should be massive push so that Web3 is massively adopted accross the globe. This will mean that the internet landscape will mark a paradigm shift. Which will pave the way for innovation, financial empowerment, job creation and collaborations.
Granted, we are at the earliest stage of Web3 development and adoption, but there is no doubts about the potentials of this technological advancement.
In a nutshell, Web3 is the future, and it looks interesting.