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Web3

Web3 has become a catch-all term for the vision of a new, better internet - one that is built on blockchain technology and is communally controlled by its users. At its core, Web3 uses blockchains, cryptocurrencies, and NFTs to give power back to the users in the form of ownership. Proponents envision web3 taking many forms, including decentralized social networks, “play-to-earn” video games that reward players with crypto tokens, and NFT platforms that allow people to buy and sell fragments of digital culture. The premise of 'Web 3.0' was coined by Ethereum co-founder Gavin Wood shortly after Ethereum launched in 2014. Packy McCormick, an investor who helped popularize web3, has defined it as “the internet owned by the builders and users, orchestrated with tokens.”

CORE IDEAS OF WEB3

  • Decentralized. Instead of the internet controlled and owned by centralized entities, ownership gets distributed amongst its builders and users.

  • Permissionless. Everyone has equal access to participate in Web3, and no one gets excluded.

  • Native Payments. It uses crypto for spending and sending money online instead of relying on outdated infrastructure of banks and payment processors.

  • Trustless. It operates using incentives and economic mechanisms instead of relying on trusted third-parties.


WHY IS WEB3 IMPORTANT?

  • Ownership. Web3 gives you ownership of your digital assets in an unprecedented way. Web3 allows for direct ownership through NFTs.

  • Censorship Resistance. On Web3, your data lives 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.

  • Decentralized Autonomous Organizations (DAOs). You can own the platform as a collective, using tokens that act like shares in a company. 

  • Identity. Control your digital identity with an Ethereum address and ENS profile. Using an Ethereum address provides a single login across platforms that is secure, censorship-resistant, and anonymous.

  • Native Payments. Web3 uses tokens like ETH to send money directly in the browser and requires no trusted third party.


LIMITATIONS

  • Accessibility. Web3 is less likely to be utilized in less-wealthy, developing nations due to high transaction fees. The technology is ready, but we need higher levels of adoption on layer 2 to make Web3 accessible to everyone.

  • User experience. The technical barrier to entry to using Web3 is currently too high. Users must comprehend security concerns, understand complex technical documentation, and navigate intuitive user interfaces.

  • Education. Web3 introduces new paradigms that require learning different mental models than the ones used in Web2.0. Web3 isn't difficult, but it is different.

  • Centralized infrastructure. The Web3 ecosystem is young and quickly evolving. As a result, it currently depends mainly on centralized infrastructure (GitHub, Twitter, Discord, etc.).

Warnings and Disclaimers

The information contained herein is obtained from sources believed to be reliable, but its accuracy cannot be guaranteed. It is not designed to meet your personal financial situation - we are not investment advisors nor do we give personalized investment advice. The opinions expressed herein are those of the publisher and are subject to change without notice. It may become outdated an there is no obligation to update any such information.

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