Definition of Web 3.0

Web 3.0 is generally viewed as the next evolutionary stage of the current World Wide Web. The premise of this next stage of evolution is that the current Internet does not give users enough control over their own data and requires too much trust when it comes to managing data. The goal of Web 3.0 is to give users more control, particularly through decentralization and the creation of further individual freedom, thereby ensuring more independence from intermediaries such as large technology companies.

From Web 1.0 to Web 3.0: the evolution of the Internet

If you consider that the basic features of the Internet emerged only towards the turn of the last century, it has undergone rapid development. It is difficult to clearly define the phases of the Internet by specific years, as they tend to merge into one another. The phases can generally be classified as follows: Web 1.0 describes the Internet in its initial form, Web 2.0 is the current Internet, and Web 3.0 is the Internet as it is currently developing.

Web 1.0: static websites for obtaining information

Web 1.0 came about in the 1990s. It has its origins at CERN in Geneva, where Timothy John Berners-Lee first used Hypertext Markup Language (HTML) to format electronic documents, creating the basis for the World Wide Web. Web 1.0 consisted of static, largely text-based websites that supported users in particular in obtaining and reading information. There were only a few search engines, and not all of them exist anymore. Users were also unable to edit or comment on websites. Instead, it was companies and institutions that uploaded information about themselves to the Internet and continually developed their own websites.

Web 2.0: social networks and centralized data management

Web 2.0 heralded the era of “user-generated content”. The emergence of social networks, Wikipedia and blogs in the early 2000s fundamentally transformed the previous, one-dimensional Internet. Not only were private users able to read and receive information, they could also share, comment and publish content themselves. The launch of the first iPhone made all of this possible on mobile devices too, and sophisticated search engines enabled users to get the information they wanted.

User experience became increasingly important, because the goal was to make every interaction on the Internet as easy and convenient as possible. Gradually, demand grew for a personalized web experience in which only content relevant to users is displayed. To achieve this, website operators need a lot of data. While data-driven personalization brings many advantages, it also raises critical questions: why is user data collected and evaluated? Where is this data being stored? Who is it being shared with? Is the data sufficiently protected?

Anyone using online services that require personal data has to rely on providers to handle their data properly, as direct oversight is not usually possible. Data is stored centrally, and there is a lack of transparency.

Large technology companies and social media platforms in particular have been criticized repeatedly for a lack of transparency in their handling of user data. For people who also use social media platforms for commercial purposes, there is another important point: a few platforms have achieved a dominant position through their reach. Not only can you set your own conditions for using your platform, but you can also adapt them quickly. This means that not only do operators usually own everything that is uploaded to the relevant platform, they also have control over who can access it and under what conditions. Users are in a dependent relationship.

Web 3.0: greater focus on the user

Web 3.0 is about to fundamentally change the Internet and gradually solve existing problems. The goal of the next phase of the Internet is to transfer data sovereignty back to the users. This will be accompanied by progress in the areas of privacy and data security. Instead of using technology platforms and social networks to exchange personal data, Web 3.0 users can actively participate in the administration and operation of individual protocols. That’s what makes Web 3.0 revolutionary: it operates with protocols independent of intermediaries. The next evolutionary phase of the World Wide Web is still in the making, but the technologies used suggest that the basic concept of Web 3.0 will differ significantly from Web 1.0 and Web 2.0.

Blockchain plays an important role in Web 3.0, because its decentralized database and transaction infrastructure meets the desire for more independence from centralized servers and platforms. Users can use blockchain to interact with each other directly, make payments, conclude contracts and generally exchange information. Blockchain is therefore an important technical prerequisite for digital interaction and the management of an independent digital self. This includes the associated user data, storage of cryptoassets such as licences for music, digital works of art, etc. or payments with cryptocurrencies.

Web 3.0 and its potential

We are still right at the beginning, so no one can predict exactly to what extent Web 3.0 will change previously familiar structures on the Internet and beyond. In principle, however, there are a variety of possible areas of application. We describe some of them here.

Decentralized on-chain identity

An important achievement of Web 3.0 is “on-chain identity”. Nowadays, all applications, platforms and portals require registration and therefore our identity. Currently, with Web 2.0, identity management is centralized, which means that third-party services such as Google or social media platforms ask for personal data in order to give users access to web applications.

Web 3.0 decentralizes identity management. Instead of requiring users to hand over personal data, authentication is carried out using cryptographic keys. To use an app (in Web 3.0 language, this is called a “dApp” ), users only need to connect their wallets. This generates an on-chain identity – i.e. transaction data that is linked to a blockchain address and protected using cryptographic techniques. These identity credentials are more secure against forgery and allow users to maintain control over their personal data.

Cryptoassets

One of the most important, if not the most important, achievements of Web 3.0 is “cryptos”, or “cryptoassets”. These include cryptocurrencies, non-fungible tokens (NFT) and stablecoins.

Cryptocurrencies

As mentioned above, Web 3.0 will be characterized by a number of new technologies, including smart contracts and decentralized applications (dApps). Blockchain enables secure and decentralized storage of transactions and information. Using cryptography, information is encrypted and stored unalterably in blocks, making data manipulation nearly impossible. This means that, thanks to blockchain technology, users can exchange and own digital content, services and products directly, without a central authority acting as an intermediary. These new capabilities have the potential to fundamentally transform traditional finance and interactions between users and platforms. Cryptocurrencies such as Bitcoin and Ether, which are also based on blockchain, are therefore an important component of Web 3.0.

Non-fungible tokens (NFTs)

NFTs are an emerging trend in the crypto world. They enable the unique identification and trading of cryptoassets such as artwork, music, real estate, and more. NFTs are based on blockchain technology. As the underlying technology, it guarantees the ownership and authenticity of these assets.

Stablecoins

Stablecoins are blockchain-based assets pegged to a national currency, a basket of currencies, or some other asset. For example, the USDC is a stablecoin with a USDC/USD exchange rate of 1. The cryptoasset is therefore subject to the same fluctuations as the underlying national currency. This is intended to avoid the price fluctuations typical of cryptocurrencies.

Smart contracts

Smart contracts are digital program codes that can be executed on blockchain. They enable the automation of transactions or more complex agreements with no intermediary.

New access points

Micropayments

Micropayments are small payments that are used when purchasing digital content, services or products on the Internet. They are often used for individual digital items, downloads, access to special content, premium features in apps or online games, and access to certain areas of a website or platform. Micropayments are designed to provide users with a simple and quick payment method that make it possible to pay even smaller amounts with little effort.

At the Web 2.0 stage, it was difficult to implement micropayments, because transaction fees for small amounts were often disproportionately high. Things are different in Web 3.0. Cryptocurrencies such as Bitcoin and Ether are based on a decentralized payment infrastructure that makes sending and receiving smaller amounts economically viable. Micropayments have the potential to change the monetization of content on the Internet, as they enable content providers to receive payments even for low-value content or services.

Money streaming

What if you were paid your salary every day or every second instead of having to wait for a lump sum payment once a month? This is not an option in Web 2.0, because it takes a long time for the money to reach the banks, and it would be very costly to transmit thousands of small transactions. Web 3.0 and crypto make this possible, however. This method is called “money streaming” – a constant stream of micropayments that are transmitted every second. Money streaming is therefore like a continuous flow of money based on blockchain technology. The whole thing is carried out via smart contracts that are programmed to constantly execute transactions at regular intervals, creating a constant flow of money. When all the money has flowed from address A to B, the transaction comes to a halt. In addition to salary payments, money streaming could be used to automatically transfer small amounts of money to artists as their songs are listened to.

Token gating

Token gating means that access to certain content, areas, products or even communities is restricted to holders of a specific cryptocurrency token or non-fungible token (NFT). The tokens work like keys kept in the wallets of their users. This additional benefit of NFTs can be compared to a ticket inspector at a football stadium who prevents unauthorized people from entering.

The fascinating evolution of the Internet from Web 1.0 to Web 3.0 is a transformative journey that has revolutionized the way we interact and obtain information. Web 3.0 empowers users and gives them more control over their data and actions. Furthermore, on-chain identities, cryptoassets, cryptocurrencies, NFTs and new access methods such as micropayments, money streaming and token gating open up enormous potential for a wide range of applications. But the full potential of Web 3.0 has not yet been fully harnessed. There are many exciting areas of application emerging that could permanently change the Internet and the digital world in the coming years.