The World Wide Web (www) as we know it is full of issues and anomalies. Users have zero control over data, absence of user anonymity and multiple data breach incidents are some of the issues of the current web environment. The world already saw advanced secured system of cryptocurrencies and NFTs and therefore, a new web environment is set to release based on the concept of decentralized system. This new concept is known as Web3, an improved successor to the current web structure known as Web2. Unlike traditional system of a centralized server, Web3 is entirely based on a decentralized structure with blockchain technology and digital ledgers.
A Web Environment Based on Decentralization
The idea of further developing the World Wide Web (www) is to make it run on a decentralized system. The concept of Web3 is based on the technology that created the backbone of cryptocurrency i.e. blockchain. The Web3 environment would be ideal of creating non-fungible tokens (NFT) that are basically digital financial assets. The vision of creating and developing Web3 is based on concepts such as:
- Decentralization System
- Blockchain Technology
- Decentralized Autonomous Organization (DAO)
- Decentralized Finance
- Self-sovereign Identity
While blockchain technology would create the decentralized system for Web3 similar to cryptocurrencies or NFTs, DAO would provide transparent computer codes which cannot be controlled by government authorities. Self-sovereign identity can deliver total control to a user of managing his/her online identity, thus making a user independent of using authentication system like OAuth.
Implementation of Decentralized Finance (DeFi) would enable users conducting financial transactions with other without involving third party intermediaries like exchanges, brokerages or even banks. This concept allows businesses between multiple participants while maintaining user anonymity.
Why Web3 is better than Web2
The requirement for creating Web3 stems from the major issue: data and information is not controlled by users. Web2, the current web environment, the data architecture is based on a stand-alone computer system where a centralized server stores data and users conduct data transmission via that system. We the users don’t possess control over data being generated in the current web environment.
Maintenance of cybersecurity has become a major issue in Web2. As data is stored in centralized servers, unauthorized third parties can possess total control over sensitive data without much difficulty. With all these problems, Web3 aim to solve them by changing the data architecture i.e. from centralized to a decentralized system.
Based on the concept of blockchain technology, applications on Web3 run on blockchains which is a decentralized network consisting of multiple per-to-peer nodes. Such types of apps are called decentralized apps or dapps. A decentralized system offers a more stable and secured network than a centralized system, as multiple servers are being used for data storage. The network would still operate even majority of participants are compromised.
Web3 and Business
With its new characteristics and fulfilling the shortcomings of the previous version i.e. Web2, implementation of Web3 will significantly change the process of conducting online businesses. Online interactions on Web3 are based on mainly two concepts:
- Trustless
- Permissionless
The above mentioned two concepts completely eliminate the involvement of a third party during transactions. Trustless enables a seamless transaction procedure between any two parties that doesn’t require a trusted party. This also maintains complete anonymity among two parties involved in the transaction. A perfect example of a trustless transaction would be the process of cryptocurrency payments. Exchange of currencies such as Bitcoins or Ether is conducted without involving any type of third parties. Data encryption along with blockchain algorithm fully controls the entire transaction process, making it seemingly impossible for disruption.
A somewhat similar type of concept is ‘permissionless’ which indicates that two parties conducting any kind of interaction in Web3 need not require a third party permission like a service provider or a government authority. In this way, complete anonymity is maintained throughout theWeb3 environment. As the current Web2 environment is controlled by government authorities and giant corporations up to a certain degree, Web3 aims to completely remove any kinds of third party involvement on data transmission. Instead, Web3 follows Decentralized Autonomous Organizations or DAOs in which a group or a collective is bounded by blockchain rules and regulations that are being coded. The concept of DAO removes all ‘middleman’ entities involved in running an organization like bankers, accountants, lawyers or landlords.
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