If you’ve been online recently, you probably heard about Web 3.0. This relatively new concept is still being defined, but we at eToro have taken it upon ourselves to explain some of the elements that make Web 3.0.
What is Web 3.0?
The third generation of web technology is known as Web 3.0. While Web 1.0 focused mostly on reading and obtaining information, and Web 2.0 was all about reading, writing, and creating — users joined social media platforms, which grew popular thanks to content created by these users — Web 3.0 marks the next step in the evolution of the World Wide Web.
The phrase “Web 3.0” was first used in 2014 by Gavin Wood, the creator of the blockchain infrastructure firm Parity Technologies, to describe his predictions for the development of the internet.
Web 3.0 is continually changing and being defined, and there still isn’t one single definition to it that’s accepted worldwide. However, it does have some defining characteristics.
Web 3.0’s defining characteristics
Decentralization
Web 3.0 will be decentralized in contrast to the past two generations of the web, which had heavily centralized governance and applications. A distributed method without a centralized authority will enable applications and services.
Artificial intelligence (AI) and machine learning
Web 3.0 should have more automation overall, and AI will be the primary source of such automation.
Blockchain-based
Blockchain enables the creation of decentralized apps and services. It uses a distributed method to disseminate data and connections across services as opposed to centralized database architecture. Blockchain can also provide an immutable database of transactions and activities in a decentralized setting, assisting in the provision of verified authenticity.
Cryptocurrency-enabled
Use of cryptocurrencies, which primarily replaces the use of fiat money, is a key component of Web 3.0 services.
How does Web 3.0 work?
The Hypertext Markup Language (HTML) standard governs the design and delivery of webpages with Web 1.0 and Web 2.0 technologies. With Web 3.0, HTML will still be a core layer, but how it relates to data sources and where those data sources are located may differ from past web generations.
In the Web 2.0 age, the majority of websites and almost all applications rely on some kind of centralized database to deliver data and support functionality. With Web 3.0, applications and services employ a decentralized blockchain in place of a centralized database. The fundamental notion behind blockchain is that there is a type of distributed consensus rather than an arbitrary central authority.
In the blockchain and Web 3.0 communities, the idea of a decentralized autonomous organization is an emerging form of governance (DAO). With a DAO, Web 3.0 technologies and communities offer a type of self-governance in an effort to move away from centralized control over platform operations.
More so than with fiat money, Web 3.0 also functions fundamentally with cryptocurrencies. The use of cryptocurrencies, which are all constructed and enabled on top of blockchain technology, enables finance and the use of a decentralized form of payment throughout Web 3.0.
Web 3.0 cryptos
Web 3.0 cryptocurrencies are decentralized ventures that automate online transactions through the use of smart contracts. Some of these cryptos include Chainlink, Filecoin and Theta.
Investing in Web 3.0
The most direct way to invest in Web 3.0 technology is to obtain Web 3.0 project tokens. Each blockchain project’s tokens operate in a unique way; these features are commonly referred to as its “tokenomics.” On exchanges, tokens can be bought, sold, or swapped. They could also be used to become eligible to vote on proposals or to grant access to application services. Some Web 3.0 coins can be used to generate passive income through staking or other network-supporting activities. You must learn about a Web3 project in order to comprehend its tokens. Almost all initiatives provide a white paper outlining their goals and the operation of their tokens.