What Is Web3: Why We Need the Third Generation of the Internet

What Is Web3

The term Web3 (or Web 3.0) refers to the concept of a decentralized internet. To understand how this new format differs from the familiar worldwide web, it's essential to revisit the history of the technology itself and examine the early iterations of its implementation.

Web3 represents a paradigm shift in how we interact with digital spaces. Unlike its predecessors, this third generation of the internet emphasizes user ownership, transparency, and the elimination of centralized control. The concept has gained significant traction in recent years, with companies and developers racing to build tools and platforms that align with this new vision of the internet.

The General History of the Internet

The modern internet is a descendant of ARPANET, which was created in 1969 under the direction of the Advanced Research Projects Agency of the U.S. Department of Defense. Based on this foundation, the National Science Foundation of the United States developed the open network NSFNET 15 years later. This project facilitated data transmission between universities and data centers. By 1992, approximately 7,500 networks had connected to NSFNET.

In parallel, scientists were developing email transmission technology. Based on this method, the first mass network for data exchange, Usenet, appeared in 1980. This marked a significant milestone in enabling people to communicate and share information across distances.

Experiments with creating data exchange networks were also conducted in many other countries, including Chile and the United Kingdom. The collective developments from around the world became the foundation for the establishment of the first iteration of the worldwide web, demonstrating the truly global nature of internet innovation.

The term "internet" emerged in 1983. It came into use following ARPANET's transition to the TCP/IP protocol, which represents a network model for data transmission. This standardization was crucial for enabling different networks to communicate with each other seamlessly.

The World Wide Web project was presented in 1989, with Tim Berners-Lee as its author. His vision of a connected information system revolutionized how people access and share knowledge.

The subsequent chronology of events is as follows:

• 1990: The first browser appeared. The public gained access to the program in 1991, marking the beginning of widespread internet adoption.
• 1995: Responsibility for internet development was transferred to the private sector. This decision stimulated the growth of the worldwide web's audience and accelerated innovation.

Formally, the development of the internet can be divided into three stages, each with its own distinctive characteristics and technological capabilities.

Web1: The First Generation of the Internet

The first iteration of the internet was extremely limited in scope and functionality. Web1 was primarily used to deliver text-based data, with minimal interactive capabilities.

The first generation of the internet consisted mainly of static pages. These pages operated on web servers hosted by providers, offering little flexibility for users. Web1 users were significantly limited in their capabilities. For example, the first iteration of the internet did not allow for content modification by end users. Additionally, it was extremely difficult to make changes to websites, as this required technical expertise and direct server access.

The Web1 era was characterized by a read-only experience, where users were passive consumers of information rather than active participants. Websites served as digital brochures, presenting information in a one-way communication model. This limitation, while restrictive, laid the groundwork for the more interactive experiences that would follow.

Web2: The Second Generation of the Internet

The second iteration of the internet emerged during the "dot-com bubble" period from 1995 to 2001. This time period entered history due to the surge in internet company stocks. Many business models of young organizations, whose stocks rose amid the hype surrounding the new technology, failed to meet expectations. As a result, in spring 2000, the dot-com bubble began to collapse, leading to significant market corrections.

Web2 is characterized by more refined website design and expanded functionality. For example, users of internet platforms that survived the dot-com crash, including major e-commerce platforms, were offered the ability to leave reviews and ratings. Online encyclopedias also appeared, such as Wikipedia, where users can modify entries and contribute to collective knowledge creation.

Developers began launching platforms that help people communicate at a distance. Examples of such projects include social media networks that revolutionized how people connect and share information. These platforms introduced the concept of user-generated content, transforming internet users from passive consumers to active creators.

With the advent of Web2, censorship appeared in the internet space. Platform owners began banning users with opinions deemed undesirable by them or by the public. This raised important questions about free speech and the power wielded by centralized platforms.

Another problem with Web2 is centralization. Servers that ensure the operation of internet platforms are vulnerable. In case of their failure, network users lose access to the sites of interest. This single point of failure represents a significant weakness in the current internet infrastructure.

It turns out that Web2 is technically more advanced than Web1. However, the second iteration of the worldwide web has significant drawbacks. The transition to Web3 may provide solutions to these challenges, offering a more resilient and user-centric internet experience.

Web3: The Third Generation of the Internet

Gavin Wood, co-founder of Ethereum, first used the term Web3 in 2014. According to the developer's vision, the third generation of the internet will become a decentralized form of Web2. Gavin Wood believes that the new network will be more resilient, secure, and transparent than its predecessor.

In the third iteration of the internet, users will be able to interact with the metaverse market and non-fungible tokens (NFTs), which developers use to populate digital worlds. This opens up new possibilities for digital ownership and creative expression, allowing users to truly own their digital assets.

Decentralized applications may become the foundation of Web3. Meanwhile, blockchain will serve as the "thread" connecting all components of the third internet iteration. Recall that this technology helps organize distributed data storage. This approach protects against internet platforms going offline due to server damage or other technical malfunctions by creating multiple copies of information and distributing it across users' computing machines.

Blockchain guarantees data protection and authenticity. The technology is built in such a way that no one can delete or substitute even a portion of information recorded on the chain of blocks and verified by system participants. This immutability is fundamental to establishing trust in decentralized systems.

Smart contracts will be responsible for automating system operations. This approach will reduce users' dependence on intermediaries, enabling peer-to-peer interactions without the need for trusted third parties. Smart contracts execute automatically when predetermined conditions are met, ensuring transparency and efficiency.

The decentralized finance (DeFi) market will be responsible for organizing financial relationships in Web3. The concept implies a complete rejection of centralized credit organizations in favor of a distributed system of digital assets. DeFi platforms offer services such as lending, borrowing, trading, and yield generation without traditional financial intermediaries.

There are already applications in the market that support Web3 capabilities. However, it is still premature to talk about full-scale Web3 integration. The technology is in its early stages, with ongoing development of infrastructure, standards, and user-friendly interfaces needed for mainstream adoption.

Why Web3 Is Better Than Other Internet Versions

The main advantage of the third iteration of the internet is its emphasis on decentralization. This approach ensures network stability and guarantees user data protection. The blockchain-based internet concept will also allow parties to eliminate intermediaries, which will increase transaction speed and eliminate unnecessary expenses.

Decentralization offers several key benefits:

• Enhanced Security: Distributed data storage makes it extremely difficult for malicious actors to compromise the system, as there is no single point of failure to attack.
• Data Ownership: Users maintain control over their personal information, deciding who can access it and under what conditions.
• Transparency: All transactions and operations are recorded on the blockchain, creating an auditable trail that promotes accountability.
• Censorship Resistance: No single entity can unilaterally remove content or ban users, protecting freedom of expression.

Additionally, decentralization will protect users from censorship and help the internet community free itself from the pressure of large corporations. Therefore, it can be assumed that organizations that profit from Web2 will resist the spread of Web3 in various ways. This resistance may manifest through regulatory challenges, competing technologies, or attempts to co-opt the Web3 narrative.

The economic model of Web3 also differs fundamentally from Web2. Instead of platforms extracting value from user data and attention, Web3 enables users to directly benefit from their contributions to networks and platforms. Token-based incentive systems reward participation, content creation, and network maintenance, creating a more equitable distribution of value.

Furthermore, Web3 promises greater interoperability between platforms and services. Users will be able to carry their digital identities, assets, and reputations across different applications seamlessly, breaking down the walled gardens that characterize the current internet landscape. This portability empowers users and fosters innovation by reducing switching costs and vendor lock-in.

As Web3 continues to evolve, it represents not just a technological upgrade, but a fundamental reimagining of how the internet serves humanity. By prioritizing user sovereignty, transparency, and decentralized governance, Web3 offers a vision of a more democratic and resilient digital future.

FAQ

What is Web3? What is the fundamental difference between Web3 and Web2?

Web3 is a decentralized internet architecture that returns value to creators and users. Unlike Web2's centralized model where platforms profit from user-generated content, Web3 uses blockchain technology to enable direct ownership, control, and economic participation for users.

Why do we need Web3? What internet problems can Web3 solve?

Web3 solves centralization issues by enabling decentralized networks where users own their data and assets. It removes intermediaries, ensures transparency through blockchain technology, and allows direct value transfer between participants without third-party control.

What are the main features and advantages of Web3?

Web3 offers decentralization where users control their data and digital assets, enhanced security through blockchain technology, machine-based trust replacing institutional intermediaries, and a creator economy model. It eliminates monopolies, enables transparent governance, and creates new economic opportunities through tokenization and smart contracts.

What role does blockchain technology play in Web3?

Blockchain serves as the foundational infrastructure for Web3, enabling decentralized, transparent, and secure digital interactions. It eliminates the need for central authorities, allowing users to own and control their data. Blockchain powers DeFi, NFTs, DAOs, and enables trustless transactions while ensuring data integrity across the ecosystem.

What are the current practical application scenarios of Web3?

Web3 applications span decentralized finance (DeFi) like Uniswap and lending protocols, decentralized autonomous organizations (DAO), NFTs for digital assets, decentralized social media platforms, and distributed storage solutions. DeFi is the most mature sector, enabling transparent lending, trading, and financial services without intermediaries through smart contracts on blockchain networks.

What are the risks and challenges of Web3?

Web3 faces smart contract vulnerabilities, insufficient liquidity, and regulatory uncertainty. These issues may lead to security breaches and market volatility.

How can ordinary users participate in and use Web3 applications?

Users can participate in Web3 by installing a crypto wallet, purchasing digital assets, and interacting with decentralized applications (DApps). Start by learning blockchain basics, then explore DeFi protocols, NFT platforms, and governance tokens to engage with the decentralized ecosystem.