To better understand Web3, it is obligatory to review current and past phases of the internet. Unlike the current Web 2.0 phase, where platforms and apps are owned by centralized entities, such as large tech companies, Web 3.0 platforms and apps are intended to be developed, owned, and maintained by ordinary users. In other words, Web3 must be a logical step towards the creation of fully functional metaverses. Until recently, the terms “metaverse” and “Web 3″ have been used interchangeably.

The coming Web3 variant of the internet is expected to be more like the initial Web 1.0 phase than the current Web 2.0. Dating back to the 1990s, Web1 was the beginning of the World Wide Web. Like Web3 is expected to be, Web1 was created based on strictly volunteer decentralized protocols backed by individual users.

What relationships does Web3 have with cryptos?

What Exactly Web3 is

To put simply, Web3 is an upcoming, decentralized form of the internet, where users become owners. Rather than using free apps and platforms that collect user data, as in the current phase of Web2, users in the future Web3 phase will be able to participate in the creation, operation, and governance of the protocols themselves.

In Web3, ownership can be secured by digital tokens or cryptocurrencies, through decentralized networks such as blockchain. For example, if you hold enough digital tokens for a particular network, you could have substantial voting rights in the operational governance of that network. This is similar to the way stockholder voting rights allow shareholders of record in a company to vote on a wide variety of corporate actions.

Blockchain networks like Handshake as well as companies like Unstoppable Domains aim to democratize the existing Domain Name System (DNS) which maps an IP address to a human-readable address. New services like Andrena and Althea circumvent preexisting internet providers run by commercial and political interests by creating community networks where individuals can operate and get remunerations by providing internet to members within their community. The DNS registry is controlled by organizations like Verisign and ICANN and has unrestricted control to enforce IP rights, censorship and seize domain names (IP addresses) without litigation. While not all of these instances of censorship are negative, the subjective nature of it all has been increasingly concerning. Often, the DNS oversight is sponsored by executives at the highest levels of government and lobbyists of the largest multinational organizations, who may intend well but do not always act in the best interest of the public.

Web2 vs. Web3

Here is a breakdown of Web2 vs. Web3:

Web2: This is the phase we have been in since the early-2000s, when the emergence of large platforms like Google, Facebook, Twitter, and Amazon, as well as services like Uber and Venmo, brought a centralized, commercial order to the internet by making it easier to connect, browse, interact, and make transactions online. These large companies capture much of the monetary value created on the internet.

Web3: This is the future of the internet, where we return to the individualized utility of Web 1.0, but this time it’s based on blockchain technology and digital tokens that can foster a decentralized internet. Rather than the large players of Web2 capturing the bulk of monetary value, Web3 replaces the centralized entities with decentralized networks that distribute the value to creators, users, and developers.

What makes Web3 different – and more than a little weird – is that it would build financial assets, in the form of tokens, into the inner workings of almost anything you do online. And by doing so, its boosters say it could supplant corporations with decentralized, internet-based organizations governed by software protocols and the votes of token holders.

Linux Lessons

Let’s also employ a less often recalled story of Linux operating system development. What is Linux essentially? As we know, Linux® is an open-source operating system (OS). An operating system is software that directly manages a system’s hardware and resources, like CPU, memory, and storage. The OS sits between applications and hardware and makes the connections between all of your software and the physical resources that implement all the work. What important is that Linux is the community-developed open-source operating system (OS) for computers, servers, mainframes, mobile devices and embedded devices. This means it cannot, under any circumstances and scenarios, integrate hidden spyware or adware. It is supported on almost every major computer platform, including x86, ARM and SPARC, making it one of the most widely supported operating systems.

Linux has shown to be more flexible than any other operating system and has been adopted into more products than any single kernel in history. And will remain such until something better comes along. Certainly, it has a future in the desktop.

DuckDuckGo Lessons

Although Google remains the gold standard of various search needs and statistics, many of us are increasingly concerned by privacy – especially while seeing ads related to our last search inquiries and online shopping visits. DuckDuckGo (also abbreviated as DDG) is an internet search engine that emphasizes protecting searchers’ privacy and avoiding the filter bubble of personalized search results. DuckDuckGo does not show search results from content farms. It uses various APIs of other websites to show quick results to queries and for traditional links it uses the help of its partners (mainly Bing) and its own crawler.

Web3 assumes the unchallenged right for privacy by any and every Web user. According to Bleeping Computer, in 2020, the last available full-year statistical period, DuckDuckGo saw an impressive search volume increase of 46.4%. The report said DuckDuckGo received 23.6 billion total search queries with a daily average of 79 million search queries by the end of December 2020. This growth went parabolic in 2021.

Web3 Tokens

Web3 is not an abstract concept without concrete tools. Web3 tokens are those that will be used to power decentralized apps (DApps). Web3 tokens are so far largely built on Ethereum-based platforms, but more and more frequently enjoy their own platforms linked to them. For example NEAR – NEAR Protocol. The top Web3 tokens are those that are meant to bridge today’s Web2 solutions with tomorrow’s DApps.

NameSymbolCurrent MarketcapReal Volume 24Hr USDSectorMax SupplyReddit SubscribersStock-To-Flow
ChainlinkLINK6829360107364224071.8Data Management100000000075767N/R
HeliumHNT310763975738371623.66IoT223000000854595
Theta NetworkTHETA2946886250201590302.7Content Creation and Distribution1000000000N/RN/R
FilecoinFIL2863056094163968517.9File Storage2000000000N/RN/R
The GraphGRT184842123539377744.38Data ManagementN/R208542.30
StacksSTX17594642971991454.678Smart Contract PlatformsN/RN/R12.84
ArweaveAR984707531.521907895.87File Storage66000000N/RN/R
LivepeerLPT5042734376312425.07Shared ComputeN/RN/R194.43
Render TokenRNDR490154150.7401016.5817Shared compute53687091246185.62
Sia SkynetSC466439413.77326208.313File StorageN/RN/R29.77
AudiusAUDIO4252500784653728.666Content Creation and DistributionN/RN/RN/R
StorjSTORJ39879465211188222.4File Storage42500000014865N/R
GolemGNT335158026.865385.54698Shared Compute100000000021783N/R
Ethereum Name ServiceENS326401798.216395813.63N/RN/RN/R
Ocean ProtocolOCEAN325563323.710444191.15Data Management1410000000N/R17.71
NuCypherNU307215227.15541203.706Data Management3890000000N/RN/R
BraintrustBTRST302423168.32634814.895Decentralized Exchanges250000000N/RN/R
XYOXYO258228790.12345809.461EducationN/R21591N/R
Fetch.aiFET226413816.57013753.874AI115299757573578.44
Aragon NetworkANT197738522.424478679.43MiscN/R3544N/R
OrchidOXT160571450.43934684.878Data Management1000000000N/RN/R
Mask NetworkMASK1564174059612749.94Data ManagementN/RN/R
CivicCVC156175112.116260519.81Identity100000000010258N/R
NKNNKN135040361.23948804.324IoT1000000000N/R12.67
API3API313127661535614.28187Data Management20961.61
RadicleRAD128606831.8495995.5556Data Management1000000003310.37
Band ProtocolBAND117001734.613347970.95Data Management10000000064456.77
SteemSTEEM115610399.58451868.038Content Creation and DistributionN/RN/R
ElastosELA101701771.6211442.2155Data Management330000009519N/R
HandshakeHNS93467325.253470.951834Misc20400000003230N/R
GitcoinGTC92854430.727403080.821Crowdfunding100000000N/RN/R
DIADIA54419600.695798014.311Data ManagementN/RN/R
PARSIQPRQ47707168.7114317.6033Data ManagementN/RN/R
district0xDNT46559449.514593731.774Application Development100000001810355N/R
KinKIN44734053.84Social Media100000000002588116.83
TellorTRB42564151.462251305.685Data ManagementN/RN/R
EPNS – Ethereum Push Notification ServicePUSH19011951.471560370.103Application Development100000000201.04
FOAMFOAM11769535.111614.386867Data ManagementN/RN/R
Big Data ProtocolBDP2968078.21961326.80236Data Management8000000074N/R
DAOstackGEN1200184.3141496.63864No-Code LauncherN/RN/R
DAOhausHAUS0862.9415493No-Code LauncherN/RN/R
MindsMINDS0168763.4833Social MediaN/RN/R
Metaverse IndexMVI0328381.3873Virtual and Augmented Reality365N/R
BitTorrentBTT51215.80944File Storage99000000000N/R27.01
StreamrDATA2679574.504Data Management10000000004839N/R
BloomBLT2420.637777IdentityN/RN/R
Somnium SpaceCUBE693495.6117Virtual and Augmented RealityN/RN/R
Aragon CourtANJMiscN/RN/R
HiveHIVE3157118.446Content Creation and Distribution201N/R

Source: Messari.io

Key Takeaway:

For investors, Web3 can present opportunities around the decentralization of finance, which could open new markets, just as cryptocurrencies in general, DeFi and NFTs have done. For example, investors can watch for new transactional infrastructures, such as lending protocols, which have the potential to be disruptive. Although Web3 may still be years away from capturing major market share, interest from investors and venture capitalists is likely to grow as people become more educated on this new phase of the Web. Can it fail? Hardly. Simply because it is in most of us’ interest. Can the launch of Web3 be postponed? Current Web2 owners certainly understand what kind of competition they are facing and, just like in the case of Bitcoin and all decentralized crypto in general, Web3 developers will face resistance, but the very nature of its ubiquitous presence makes this kind of resistance unproductive.

Bottom Line

Web3 is a future, decentralized phase of internet development, where users become owners. This contrasts with the current Web2, which is dominated by large, centralized players that capture most of the internet’s monetary value. While Web3 is still in its infancy stage, it is likely to impact the investment community and broader economy in the years ahead.