The long-term promise of blockchain technology is to decentralize the internet. This has led to a slew of projects or applications that are being considered as the internet’s next stage of evolution, or web 3.0.
Web 3.0 applications leverage the blockchain to encode values like privacy, transparency, trustlessness, permissionlessness, and decentralization to the internet.
In order to fully understand this revolution, lets take a trip back in time.
The first phase of the internet began in the 90s, and featured non-interactive HTML pages that featured centrally-sourced data.
Web 1.0 rapidly revolutionized the way people connect and exchange information and introduced a new digital world.
The current phase of internet growth is referred to as web 2.0.
Web 2.0 is an upgrade on web 1.0 because it is more interactive and users have greater participation in creating content. This improvements contributed to more people joining the internet, which enabled new business models.
The most dominant companies on web 2.0 provide services in exchange for your personal data.
However, this situation has increased centralization of power and data-privacy concerns.
Web 3.0 projects are simply applications build on the blockchain – a distributed ledger that permanently records transactions essentially providing services that address the issues raised by web 2.0 business models.
By using blockchain technology to incorporate these values, web 3.0 looks to completely revolutionize the internet.
Here are just some of Web 3.0 features that will make this possible:
Transparency – All transactions on public blockchains are permanently recorded and can always be verified by all participants
Trustless – The rules governing how transactions are executed and stored on a blockchain ledger are dictated by smart contracts and other hard-coded protocols. This means that users can rely on the validity of the network’s performance or output without the need to trust anyone else on the network
Permissionless – Blockchains utilize consensus mechanisms, such as proof-of-stake (PoS) and proof-of-work (PoW) to agree on the state of the ledger, including order of transactions. Together with cryptography, consensus mechanisms enable the secure yet flexible transfer of information and value without the need for external authorization.
The Ethereum blockchain has created an ecosystem of decentralized applications (dApps). The most successful of tgese are decentralized finance (DeFi) applications which are eliminating the need for middlemen in finance by introducing innovative ways to trade, invest, borrow, and lend.