What is Web3?

Web3 is the 3rd upgraded version of the website, when data is interoperable in a decentralized way. Web3 is built by using AI, machine learning, big data, semantic web and blockchain. All the customers’ information and data will be recorded and updated in the blockchain, which will allow visitors to be able to use their data on the entire system of websites with just a single account or digital wallet.

Web3 features

  • Decentralization: Helps users not to be affected by many third parties during the experience.
  • Trustless & Permissionless: Allows users to interact directly and restricts relying on trust through intermediaries.
  • Self-Governing: Focusing on the rights and privacy of users when using the product is more important than ever before.
  • AI & Machine Learning: Applying these technologies is not new, but with Web3, thorough adoption and utilization will help improve data quality and experience.
  • Payment: The ability to pay and process transactions as well as very cheap fees is what we see clearly in blockchains. The application of this feature in payments, especially cross-border, has a great impact, changing the liquidity of products on Web3.

Web1, 2 vs Web3

It can be seen that in the current Web 2.0 environment, there have been many problems between monopolies and the rights and security of user information. This is just one of the shortcomings that exist on Web 2.0 platforms when centralization is common on current platforms, especially social media and e-commerce sites.

The most common company that comes to mind is the Facebook platform. Not only once, but many times, the investigations and prosecutions of the world’s largest social network have been revealed. They take advantage of customer information to sell advertising or sales pages.

Web 3.0 has since gained more attention from developers to solve these problems. This upgraded website combines with the values that Web 2.0 platforms have formed and built over the past decade, both in terms of technology and basic interoperability between websites and users.

Web2 Web3
read – write  read – write – own 
Interaction ⇒ interface ⇒ back-end Interaction ⇒ interface ⇒ blockchain and maintains by private nodes
Community-driven Mainly on users and customers-driven
The entire code is stored on centralized servers, which sent to users via Internet browsers  Applications logic is defined in Smart Contracts, written by developers and deployed on a decentralized state (open-source)

 

Web3 infrastructures

  • Ethereum Blockchain – Although it does not have a high transaction processing speed, when it comes to security, Ethereum is the first choice. Everyone in the world can easily access it, and its popularity is high. Users can write to the Ethereum Blockchain, but they can never update existing data.
  • Smart Contracts – written by application developers in high-level languages such as Solidity or Vyper, this factor defines the logic behind states and properties when changing.
  • Ethereum Virtual Machine (EVM) executes logic that is defined in Smart Contracts. They handle state changes that take place on the machine.
  • Front End (Users Interface)  – like in any other applications, the user interface defines the user interface logic. However, it also connects to Smart Contracts that define application logic.
Source: Coin98

Perhaps the hardest part of DeFi’s mode and its business is creating economic models that sustain through stress and outlier scenarios. Similar to GameFi, there are several platforms promising very high incentives for their participants. Yet, these incentives have so far proven to be short-term growth hacks.

Web3 applications

GameFi

Game is built on web2 has a common model – F2P (free-to-play). For the mechanics of the gamefi projects, especially the Earn feature, web3 is the solution to supplement and improve the trading, exchange and monetization for P2E projects.

For servers in centralized system, all game related-information is controlled and operated only by game administrators. Other game developers do not have access to monitor and allow transactions in which players want to exchange assets for profit. 

Web3 games provide innovative techniques such as DAO feature on decentralized game ecosystem, blockchain based game asset ownership, play for money, and crypto and metaverse secured gaming wallets.

Major publishers and companies like Tencent, Sony, Nintendo, and others no longer play a crucial and influential role in the Web3 game space. From that point, Web3 games will empower developers, which is similar to how DeFi reduces dependence on banks by giving more control over personal finances.

Technologies required for web3 gaming

Source: 101blockchain
  • Web3 / dApps Library (Web3 gaming dApps are built using Web3.js, ether.js , Web3.py, etc.)
  • Smart contract
  • Node / Web3 Providers
  • Digital wallet
  • XR hardware (smart glasses, tactile gloves, scanning sensors, etc.)

Music NFTs

In the Web2 space, musicians don’t know who owns their music or where and what they’re doing with their products, so an important element in web3 music to fix it is ownership of digital assets, most typically through the use of NFTs.

When creators sell their content, money transfers directly to them. If the new owner of the content continues to resell this NFT, the original creator will still automatically receive royalties (secondary royalties).

With Web3, it is possible to use music NFT products (such as songs, music copyrights, or even tickets… combined with exchanges on the blockchain space) know what the publisher did to your product and how did it change.

Record labels will not disappear but could change to integrate the DAO model, provide funding, support, resources, and even mint NFT and perform other services for artists. These labels can offer shared ownership, transparency, and a blockchain-inspired business model that appeals to artists (for example, Spotify is exploring and integrating NFT into music products).

After all, the original creator’s data is immutable metadata.

SocialFi

SocialFi = Social media + DeFi (decentralization and user empowerment). This merging of decentralized finance and social media promises better data control, freedom of speech, and the ability for users to monetize.

Thanks to the transparency and decentralization of blockchain applied on web3, socialfi projects are more transparent in the process of user management. Power is also allocated to the user-centric experience instead of some social media platforms such as Facebook, Twitter and Instagram.

User-owned content is one of the crucial elements in socialfi when content from users, even their personal information, is controlled and can be monetized by advertising, commenting, and creating content (similar to how Twitter applies readers can pay for a good tweet).

In comparison, you’re the product and the platform is the seller in web2. Furthermore, the platform is centralized and often publicly traded on the stock market, meaning it’s obligated to investors. When it comes to web3, you’re the owner and the platform is the facilitator. You now own your data and can do with it as you please.

Web3 and challenges

Applying technologies like blockchain to Web 3.0 is a long-term process that requires a lot of patience as well as other efforts from the projects. In general, the current projects on Web3 are still quite rudimentary and the product is not really complete.

We often overestimate or imagine too much that Web 3.0 will be a brandnew, interesting and never-before-seen website, but the truth is that the Dapps we are using every day are partly the same as Web3.

We have to look at the context of the market and specifically where projects are growing. Once the level of hype is excessive, it can possibly make Web3 is a bubble in the market. Moreover, some of the “meme” projects can take advantage of this opportunity to profit from users, finally making investors lose confidence and belief in this big change.

Factors that web3 is limited to:

  • Popularity: For a payment website to integrate blockchain technologies is a complicated process, as well as attracting attention from traditional users. Not to mention accessing the social network segment when most users are still too familiar with products from big companies such as Facebook, Google, Microsoft, etc.
  • Technology: This is also a problem if Web3 wants to reach the majority of the community instead of replacing traditional websites, because in cyberspace, technology barriers are the same as language barriers. Especially with blockchain technology, when there are so many terms and steps to use, it can make newcomers feel overwhelmed and unable to get used to it.
  • Cost: The cost will somehow improve on Web3 when it is introduced but in the early stages, gas fees are an issue when talking about the stability of the Ethereum platform. It can cause many people to hesitate when deciding to use their product.

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