Centralization has helped billions of people access the World Wide Web and created the stable, robust infrastructure it lives on. At the same time, large parts of the World Wide Web have a stronghold of a handful of centralized entities, which unilaterally decide what should and shouldn't be done.

Web3 answers this dilemma. Instead of the web being monopolized by large technology companies, Web3 embraces decentralization and is being built, managed and owned by its users. Web3 puts power in the hands of individuals rather than corporations. Before talking about Web3, let's explore how we got here.

The early web 

Most people think of the web as an integral pillar of modern life—it was invented and has been ever since. However, the web as we know it today is very different from what was originally envisioned. To understand this better, it's helpful to break the brief history of the Web into loose periods — Web 1.0 and Web 2.0.

Web 1.0: Read-only (1990-2004) 

In 1989, at CERN, Geneva, Tim Berners-Lee was busy developing the protocol that would become the World Wide Web. His idea? To create open, decentralized protocols that allow data-sharing from anywhere in the world. 

The early beginnings of Berners-Lee's creation, now known as 'Web 1.0', occurred roughly between 1990 and 2004. Web 1.0 was essentially static websites owned by companies and had near-zero interaction between users – individuals rarely created content – leading to what is known as the read-only web.

Web 2.0: Read-Write (2004-present) 

The Web 2.0 period began in 2004 with the emergence of social media platforms. Instead of being read-only, the web has evolved to be read-write. Instead of companies providing content to users, they began providing platforms for sharing user-generated content and engaging in user-to-user interactions. As more people came online, a handful of top companies began to control a disproportionate amount of the traffic and value generated on the Web. Web 2.0 gave birth to advertising-driven revenue models. While users can create content, they do not own it or benefit from its monetization.

Web 3.0: Read-Write-Yourself 

The foundations of 'Web 3.0' were laid by Ethereum co-founder Gavin Wood in 2014, shortly after Ethereum was launched. Gavin solved a problem that many early crypto adopters experienced: the web requires too much trust. That is, most of the web that people know and use depends on trusting a handful of private companies to act in the public's best interest.

What is Web3? 

Web3 has become a catch-all term for a new, improved vision of the Internet. At its core, Web3 uses blockchain, cryptocurrency, and NFT to return power to users in the form of ownership. A 2020 post on Twitter (opens in a new tab)↗ said it best: Web1 is read-only, Web2 is read-only, and Web3 is read-only.

Basic concepts of Web3 

Although it is challenging to provide a strict definition of what Web3 is, some key principles guide its creation.

·        Web3 is decentralized: Instead of the vast majority of the Internet being controlled and owned by a centralized entity, ownership is distributed among its creators and users.

·        Web3 is permissionless: Everyone has equal access to participate in Web3 and no one is left out.

·        Web3 has native payments: it uses cryptocurrencies to spend and send money online without relying on the old infrastructure of banks and payment processors.

·        Web3 is trustless: it works using incentives and economic systems without relying on trusted third parties.

Why is Web3 important? 

Although the killer features of Web3 are not isolated and do not fit neatly into categories, for simplicity we have tried to separate them for easy understanding.

Ownership 

Web3 gives you ownership of your digital assets in an unprecedented way. For example, say you are playing a web2 game. If you purchase an in-game item, it is directly linked to your account. If game creators delete your account, you will lose these items. Or, if you stop playing the game, you will lose the value you invested in your in-game items.

Web3 allows direct ownership through non-fungible tokens (NFTs). No one, not even the creators of the game, has the power to take away your ownership. And, if you stop playing, you can sell or trade your in-game items on the open market and recover their value.

Prevention of censorship 

The power dynamic between platforms and content creators is massively unbalanced. 

OnlyFans is a user-generated adult content site with over 1 million content creators, many of whom use the platform as their primary source of income. In August 2021, OnlyFans announced plans to ban sexual content. The announcement sparked outrage among the platform's creators, who felt they were being robbed of revenue from a platform they helped build. After the reaction, the decision was quickly withdrawn. While creators are winning this battle, it presents a problem for Web 2.0 creators: if you leave a platform, you lose reputation and gain. 

In Web3, your data resides on the blockchain. When you decide to leave a platform, you can take your reputation with you, plugging it into another interface that more clearly aligns with your values. 

Web 2.0 requires content creators to trust platforms not to change the rules, but censorship resistance is a native feature of a Web3 platform.

Decentralized Autonomous Organizations (DAOs) 

In addition to owning your data on Web3, you can own a shared platform using tokens that act like shares in a company. DAOs allow you to coordinate decentralized ownership of a platform and make decisions about its future. 

DAOs are technically defined as consensus smart contracts that automate decentralized decision-making over a pool of assets (tokens). Users with tokens vote on how resources are spent, and the code automatically executes the voting results. 

However, people define many Web3 communities as DAOs. All these communities have varying levels of decentralization and automation by code. Currently, we are exploring what DAOs are and how they might evolve in the future.

Identity 

Traditionally, you would create an account for each platform you use. For example, you might have a Twitter account, a YouTube account, and a Reddit account. Want to change your display name or profile picture? You need to do this across each account. You can use social sign-in in some cases, but this presents a known problem—censorship With one click, these platforms can lock you out of your entire online life Worse, many platforms require you to trust them with personally identifiable information to create an account.

Web3 solves this problem by allowing you to control your digital identity through Ethereum addresses and ENS profiles. Using an Ethereum address provides a single login across platforms that is secure, censorship-resistant and anonymous.

Native payment

Web2's payment infrastructure relies on banks and payment processors, excluding those who don't have bank accounts or live within the wrong country's borders. Web3 uses tokens like ETH to send money directly to the browser and requires no trusted third parties.

Web 3 limitations 

Despite the numerous benefits of Web 3 in its current form, there are still many limitations that the ecosystem must address in order for it to thrive.

Accessibility 

Important Web3 features, such as sign-in with Ethereum, are already available to use at zero cost, but the relative cost of transactions is still prohibitive for many. Less affluent, developing countries are less likely to use Web3 due to high transaction fees. In Ethereum, these challenges are being addressed through Roadmap and Layer 2 scaling solutions. The technology is ready, but we need a high level of adoption at Layer 2 to make Web3 accessible to everyone

User experience 

Technical barriers to entry for Web3 use are currently high. Users must understand security concerns, understand complex technical documentation, and navigate unfamiliar user interfaces. Wallet providers, in particular, are working to solve this, but more progress is needed before Web3 is widely adopted.

Education 

Web3 introduces new paradigms that require learning a different mental model than the one used in Web 2.0. A similar educational drive occurred as Web1.0 gained popularity in the late 1990s; Proponents of the World Wide Web have used many educational techniques to educate the public, from simple metaphors (the information highway, browsers, web surfing) to television broadcasting (opens in a new tab). Web 3 isn't hard, but it's different. Educational initiatives that inform Web2 users about this Web3 paradigm are critical to its success. 

Ethereum.org contributes to Web3 education through our translation program, with the goal of translating as much important Ethereum content as possible

Centralized infrastructure 

The Web3 ecosystem is young and rapidly evolving. As a result, it currently relies mainly on centralized infrastructure (GitHub, Twitter, Discord, etc.). Many Web3 companies are rushing to fill this void, but building high-quality, reliable infrastructure takes time.

A decentralized future 

Web3 is a young and evolving ecosystem. Gavin Wood coined the term in 2014, but many of these ideas have only recently become reality. In the past year alone, there has been a substantial increase in interest in cryptocurrency, improvements in Layer 2 scaling solutions, extensive experimentation with new forms of governance, and a revolution in digital identity.

We're only at the beginning of building a better web with Web3, but as we continue to improve the infrastructure that will support it, the future of the web looks bright.