Known as Web2, the current iteration of the Internet focuses on the creation and distribution of user-generated content. Websites like YouTube, social media apps like Instagram and Twitter, news sites, personal blogs, and more are a big part of the Internet.
Web2 is a step up from Web1, which is primarily a read-only version of the Web filled with simple, static web pages. Web3 aims to bring decentralized and token-based economies to the Internet.
Web2 with Web3
At the beginning of the twenty-first century, the development of many different web protocols allowed programs and content to communicate through read and write interactions. Web2, in its current form, allows users to use material created by other users and to create their own content. Readers are familiar with Web 2. As a result of the autonomy of content production in Web 2, the age of social networks entered, and so did the proliferation of blogs, online forums, and online marketplaces.
However, while it is an undeniable fact that Web2 offers great benefits to users, rent-seeking central corporations have been able to use this free flow of information to monetize user information and habits. The need for developers and users to control the web has increased, primarily due to trust failures, user exploitation, and data manipulation.
Web3 aims to encourage open services led by decentralized applications (DApps) rather than centralized applications controlled by tech behemoths. Web3 users can interact directly with applications and protocols, eliminating the need for third-party intermediaries in the process. Web3 is defined as the “read/write/self” of the Internet. Open services built on Web3 encourage permissionless access, increase value and ensure authentication. These services are more reliable, fair and ethical.
Users are not required to pay recurring fees or provide personal information to use the Technology Platforms. Instead, they are invited to participate in the administration and operation of the protocols. Participants are stakeholders in the network, not just consumers or commodities that are misused to fulfill economic needs.
Tokens or coins are used in this setting to denote access, management and ownership of decentralized networks. In Web2, the user plays the role of the product; In Web 3, they take on the role of the owner.
Úrsula Okungtens, director of communications and collaboration at the Web3 Foundation, which supports blockchain and Web3, told Cointelegraph:
“When we think about ownership in Web 3, there are two main issues. The first concerns how organizations are managed. The current, flawed situation puts ownership in the hands of various powerful individuals in the face of organizations, institutions, and corporate bodies.”
Ockington continued, “A properly decentralized web ensures that ownership of these individual structures is removed from such a hierarchy. This means that networks and communities have more power in governance and decision-making. It means that rewards are shared more equitably. Blockchain is a peer-to-peer approach to creating sustainable and effective solutions.” Building Web3 to embrace the power of peer-to-peer networking.
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“Another key issue involves sovereign data ownership. Web3 strives to protect the legal claim of individuals to have full control over their data and put privacy at the forefront of their online lives. This goal can be achieved through zero-knowledge authentication protocols. Encryption and private keys.”
How Web3 brings ownership to users
Web3 brings ownership to users in many ways, one of which is the ability to host websites that cannot be censored or downloaded. The current web hosting system is mainly based on servers controlled by centralized organizations. These organizations can take down websites if they feel they have good reason to do so.
Decentralized file storage networks allow people to build censorship-free websites using the Interplanetary File System (IPFS) protocol. Instead of using a central server with IPFS, each individual acts as a server, caching data from the site. Once another user visits that site, the data is loaded by one of the cached users. So, for example, if one million users visit a site to view a photo, the next person visits the site, the photo file can be loaded from any of the million hosts.
This process eliminates the need for a centralized entity as the burden of serving the website is distributed among users. This is because data files like red-car.png have a unique cryptographic hash as an address instead of a user-generated name. Once the file is requested, the unique hash is looked up and retrieved from the cache.
Organizations such as the Web3 Foundation are supporting the development of technologies and applications in the field of decentralized web software protocols. They provide assistance to teams around the world who help build the Web3 ecosystem. The foundation currently supports 415 projects in the Polkadot ecosystem through its grant program. In addition, over 1,000 grant applications were submitted.
Decentralized Autonomous Organizations (DAOs) play an important role in the Web3 infrastructure. The next wave of user adoption in Web3 ownership and access will be driven by community-owned and managed DAOs, which are non-fungible tokens (NFTs) to drive adoption.
DAOs are self-governing groups whose decisions are made using smart contracts on the blockchain. DAOs bring together individuals with common interests and talents, eliminating the need for a governing body or single authority. Additionally, due to the blockchain’s distributed structure, all decisions and transactions can be viewed and verified by everyone.
DAOs can be used to facilitate collective ownership in the NFT context. Members make decisions through periodic voting, and access to built-in vaults requires member approval. The rising cost of NFTs has put many sets out of reach for private customers. DAOs allow users to share the cost and ownership of individual NFTs to level the playing field and promote decentralized access and the ethos of inclusion.
DAOs provide the Web3 with a governance structure that improves participation while reducing the chance of corruption or censorship. They can be found in a variety of contexts, from social media to gaming. The popularity of DAOs will expand to decentralized finance (DeFi), NFT crowdfunding, and charities as DAOs gain traction. Additionally, unlike hierarchical organizations, DAOs allow immediate decision-making once all members have agreed.
Charities can greatly benefit from the DAO concept. Administrative costs and resource allocation hesitancy are more likely to offset the benefits of a charity’s superior work. In addition, the use of DAOs allows for efficient and timely distribution of funds to the intended beneficiaries. Therefore, NGOs can ultimately have more impact on their goals.
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DAOs can be used as a direct channel for investment and rapid adoption of DeFi. Peer-to-peer crypto transactions conducted by The DAO are cheap, practically fast, and unregulated by banking regulations. As a result, members who take loans or engage in other activities may earn better income than they would in a traditional bank. The exponential growth of this industry seems to have no end in sight.
Using NFTs and DAOs to buy and store these digital assets expands the creator economy, especially given the current generation’s obsession with social media and content creation. Because the value of a creator’s work is inextricably linked to their name, following, and creation, creators earn. DAOs, like many large organizations and businesses, will certainly enable user access to Web3 in the future.