Described by its creators as a new “third generation” of the internet, Web3 is based on blockchain technologies and incorporates concepts of decentralization and token-based economics. It promises to bring a new and more democratic economic model to the web.
Decentralized applications (dApps) use the blockchain to deliver content, payments and other services directly to the user. They are usually open-source and work in direct interaction with the blockchain. They are resistant to censorship and offer benefits over traditional apps. In some cases, they allow people to integrate cryptocurrencies directly into their app. They also offer advanced capabilities, like payment services for those without bank accounts.
Web3 also allows users to own and control content and data, including identity data, on a decentralized network. This provides a sense of empowerment for the individual user. It also gives people control over the design and implementation of applications, rather than relying on a centralized agency. This makes Web3 transactions easier to keep anonymous and more secure. However, Web3 applications have limitations due to the high compute costs of the blockchain. It also takes time to retrieve data from massive networks. Therefore, Web3 applications are not always user-friendly.
Another major advantage of Web3 is that the data is stored on a decentralized network, allowing users to keep their data out of the hands of centralized corporations. This is one of the main reasons why many Web3 projects incorporate smart contracts. Smart contracts are programs that can be written into a code to give the rules to a specific event or condition. For instance, a user may want to sell a car. In order to sell it, they can create an NFT (nonfungible token) for their fans. These NFTs can be sold for cash or for a specific price. It is also possible to create a DID (digital identity identifier) for users, which can prove ownership of assets on the blockchain. These DIDs are used by Web3 applications across different platforms.
Some Web3 projects have created white papers and roadmaps that describe how their tokens can be bought by the public. This allows users to become shareholders of the project and to participate in voting on the projects’ proposals. In some cases, Web3 tokens can be sold on exchanges to earn passive income. Depending on the type of project, these tokens may grant access to application services or provide voting rights.
In addition to Web3 applications, some Web3 projects are also working to make the Web3 infrastructure more accessible. The Web3 Foundation, for example, has funded over 300 projects in 50 countries. The Foundation also supports education about Web3 projects. It plans to produce videos to teach basic crypto concepts to a general audience. It plans to share these videos with lawmakers and regulators.
The Web3 Working Group is a nonprofit organization that seeks to educate and highlight the less volatile aspects of the crypto industry. They plan to create videos to teach basic crypto concepts and to encourage infrastructure work. The group is backed by smaller crypto companies. They have already given a presentation to the Financial Innovation Caucus, which is chaired by Senator Cynthia Lummis.