Web3 or Web 3.0
In order to understand web3, we need to know what is here today and what has been here before. In other words, Web1 and Web2. When we talk about Web2, we refer to the version of the internet most of us know today. This internet is dominated by a few companies that provide services in exchange for personal data. When we talk about Web1 we refer to the initial stages of the internet we know today. In other words, the "ugly-looking" websites and interfaces were almost always read-only. Now... What is Web3 then? Well, according to the biggest web3 platform, Ethereum, when we talk about Web3 we refer to the decentralized apps that run on the blockchains. When comparing Web2 with Web3 with seeing the biggest differences in the way we manage power, i.e. in Web3 we have decentralized governance structures.
Below is a great picture illustrating the development of the internet:
What does a Decentralized governance structure mean?
A decentralized governance structure, which blockchains enable, means that there is no central point of failure and no central entity that govern an application or program. Bitcoin is an example, which is run on several thousands of nodes and they are all together making the network working. There is no single entity that can stop anyone from using the bitcoin network. There is no one that can stop any person from anywhere in the world from sending money from A to B. It is a very good example of the effects of a decentralized governance structure. Another example would be to compare if the social media app Twitter was created utilizing web3 compared to web2. It is currently built on web2 and in other words highly centralized, which means that is very easy to for example censor someone, as Twitter did with Donald Trump. This kind of censorship would not be possible in a Web3 version of Twitter, since the governance structure would be decentralized. That does not mean that it would be possible to censor Donald Trump, it can still be done but will be decided by the network participants (depending on how the governance structure is set up).
Some statistics and facts of the current development of Web3
- It has grown more than 2000% year-over-year (2020-2021)
- It has great limitations when it comes to Scalability
- It has limitations of User Experience (although it is becoming much better at a rapid pace)
- It costs a lot to do transactions on the most popular Web3 blockchain, Ethereum
- Metamask (which is a Web3-Web-Wallet) have grown over 1800% to above 10 million users during the past year
- The userbase of OpenSea which is Non-Fungible Token Platform (NFT) has grown more than 4500% over the past year
- The Total Value Locked (TVL) in Decentralized Finance (DeFi) protocols have grown by 1500% to around 85 billion over the past year according to DefiPulse
- The TVL on one of the fastest-growing platforms, Solana, is now above $11.3 Billion dollars which is a growth of over 7,000%
Some of the most interesting projects on/for web3 today:
- OpenSea (NFT Marketplace)
- Rarible (NFT Marketplace)
- Solana (Blockchain with very high scalability and cheap transactions)
- Polygon (Scalability solution on Ethereum)
- Arbitrum (Scalability solution on Ethereum)
- AxieInfinity (an NFT-based play-to-earn online video game)
- Sorare (NFT-based Fantasy Football online game)
- Polkadot, Cardano, Binance Smartchain (Ethereum competitors, in other words, blockchain)
- USDCoin, Tether, (Stablecoins)
... And there are of course many more projects, to name a few of them: Avalanche, Uniswap, Chainlink, Algorand, Internet Computer.
The crypto market is now a two trillion dollar big market and bitcoin, which is until today the most "decentralized" protocol has a market cap of 0.9 trillion dollars. There are extraordinary many talented people jumping in to start working in companies or open-source projects building things for and on Web3. Will the growth of web3 continue? Will web3 take over web2 one day? What effects will the decentralized governance structure have on the world? How will money change when/if the government printed (controlled/inflated) (fiat money) become less valuable and attractable to people than decentralized money/value on blockchains? As you can see, there are many questions left to be answered, but a couple of things are for sure; The development is real, the value being created is real, the talented people joining to build Web3 are enormous. And there is no doubt that we at greater finance will follow this development closely over the coming years.