Web3 is a rebranding initiative for crypto, aiming to strip the industry of its baggage and convince people that blockchains are the next phase of computing. But critics have compared it to a dystopian vision of a pay-to-play internet in which every social interaction and activity is turned into a financial instrument. Like many crypto projects, web3 is a product of the usual cocktail of hype, marketing, and the fear of missing out on the next big thing.
Some of Web3 projects have already begun to demonstrate the benefits of decentralizing data. However, data decentralization also poses challenges. For example, retrieving data from massive networks can take time, limiting the usability of Web3 apps. To address these problems, Web3 has come up with a protocol called “The Graph,” which indexes distributed data and allows user-facing Web3 applications to run smoothly.
The power of web3 lies in the user’s ability to influence its development. The most successful projects involve active and engaged user-members who are willing to provide feedback and contribute to their projects. Web3 projects are most successful when users are enthusiastic and willing to take the time to participate. Ultimately, they empower users and make them part of the web.
There are many ways to get involved in Web3 development. A Web3 application can be built by any organization or individual. Many volunteers work for free, but larger Web3 projects need funding. Funding is usually raised through an Initial Coin Offering (ICO), in which project participants sell crypto tokens that can be worth more in the future. Web3 projects have also attracted the interest of venture capital firms. VC firms understand the technical challenges involved in building successful software and can help provide funding.
Cryptocurrency applications are critical to many web3 applications, but they are currently in a regulatory grey area in the United States. While some tokens are legitimate, many remain unregistered securities. This means platforms that issue tokens should be subject to the same securities regulations as companies issuing securities. If these companies want to grow and remain viable, they should follow the regulations that apply to other companies.
Web3 platforms rely on decentralized networks to host data. In this way, they can reduce the risks of monopolies controlling the internet. They also allow communities to own their resources. One example of a Web3 DAO is Opolis. Opolis was originally created to support independent workers, but evolved into a decentralized entity.
Another application of web three is Filecoin, which is an open-source crypto wallet. It’s also resistant to censorship. This decentralized system enables consumers to access the internet without intermediaries and middlemen. It is possible to trade ownership of digital assets such as images and music on the blockchain. If you own these assets, you can own and govern them without having to rely on centralized services.