Posted on by Jeremy Barnett
What exactly is Web 3.0? – open protocols developed the internet and undoubtedly its evolution has been remarkable. Web 1.0 paved the way for many of the internet’s essential assets and platforms, the second generation of the web, branded Web 2.0, witnessed the growth of centralised systems allowed by closed protocols and the decentralised web, or Web 3.0, is a hot topic. One of the most significant components of Web 3.0 is the importance of the best use cases.
What exactly is Web3?
Web3 (or Web 3.0) is the next generation of the World Wide Web, enabling a faster, more personalised and interactive immersive user-experience via decentralised networks. Web3 was first used by Gavin Wood, who helped develop the Ethereum blockchain. Artificial intelligence, the semantic web and machine learning are just a few of the technologies fuelling Web3’s evolution. Furthermore, the blockchain Web3 use cases show how cryptographic security is built into Web3 to ensure user data is safe. Of no surprise is that the types of institutions which dominated Web1 and Web2 are likely to be different from those institutions that drive Web3. However, despite this is, given the money that Meta (renamed Facebook) and Microsoft are spending on Web3 ($100billion and $69billion respectively), it appears that some of today’s tech giants can also see the opportunities that Web3 offers.
Evolution of the web
Source: Fabric ventures
Features exclusive to Web3 are included in the list below:
- Web3 is accessible because it incorporates readily available open-source software
- Users and service providers do not require authorisation from centralised regulating entities to use Web3 networks
- Engaging in private and public settings without needing trusted third parties is another powerful feature of Web3 applications
- Importantly, Web3 also provides ubiquity which guarantees internet accessibility regardless of place, time or device. For instance, IoT technology can facilitate access to internet services via various intelligent devices besides voice assistants.
Top use cases of Web3
Web3’s defining characteristics demonstrate its capacity to alter the online user experience. Is Web3 limited to revising UX components in web applications and services? In contrast, the top Web3 use cases illustrate a distinct narrative:
- Decentralised autonomous organisations (DAOs)
DAOs are decentralised systems where a central authority cannot alter the rules. Furthermore, DAOs ensure they are independent by using smart contracts to count votes and make decisions automatically.
The decentralised autonomous organisation is a prime illustration of Web3’s ‘on-chain’ governance. DAOs grant the idea of joint governance to the digital world by putting specific rules into smart contracts. DAOs should be considered one of the most promising uses of Web3 because they have the ability to be used as a model for how organisations are managed. Vitalik Buterin, founder of Ethereum, gives his thoughts on DAOs: “When decisions are concave, relying on the wisdom of the crowds can give better answers,” adding, “In these cases, DAO-like structures with large amounts of diverse input going into decision-making can make a lot of sense.”
The metaverse is unavoidable amongst the numerous entries for significant Web3 use cases. The metaverse offers an infinite virtual universe, a three-dimensional internet with embodied content that users may navigate as digital avatars. Essentially, you will be on the internet instead of seeing it on your computer. The metaverse employs several Web3 concepts to provide immersive and compelling user experiences. The metaverse advocates open access for all users and places total control of user experiences in their own hands. An open, shared and decentralised virtual environment is crucial to accepting the metaverse as one of the leading Web3 use cases. However, the metaverse is not yet a reality, and traces of the technology may be seen on other platforms. Facebook, Microsoft, Epic Games and many other tech and commercial giants have recognised the importance of Web3 concepts in various metaverse applications.
- Digital infrastructure and privacy
Complete transparency is the most prevalent concern in present blockchain networks. There are blockchain Web3 application cases suited to privacy and digital infrastructure improvement. There are already a wide variety of cryptographic tools that enable data to be kept private, such as zero-knowledge proofs, homomorphic encryption and cryptographic blinding. As one of the most excellent Web3 use cases, digital infrastructure enhancements depend on the security of user information. In addition, Web3 has increased the design freedom for apps with enhanced privacy. Given the numerous data breaches in Web2, data safety is undoubtedly one of the most significant features of numerous Web3 use cases. Now Web3 can provide the right platform for gaining access to various data-protection apps. Furthermore, regulatory compliance might be enhanced by the Web3 use cases for privacy and advancements in digital infrastructure. Privacy layers can assist consumers in overcoming their reluctance to provide personal information to a blockchain application or service. So, Web3 will play a major part in making it easier for blockchain networks to comply with regulations, potentially without a lower risk manner. However, Web3’s security is not fool proof and protecting data must be paramount for those who incorporate Web3 technology – or they risk clients’ assets being hacked.
- Blockchain games
Blockchain-based games are a real-world Web3 example, enabling users to own and trade in-game objects. Blockchain games are one of the most significant responses to, “what is Web3 used for?”, since they were the first Web3 apps. Blockchain-based games are a promise for the future of gaming and have the ability to create new virtual worlds and economies with Web3 concepts. NFTs distribute avatars, tools, experience points and upgrades in blockchain-based games. On secondary markets, players can sell NFTs for real money and move assets from one game to another. Play-to-earn models emphasise blockchain-based games in real world Web3 application cases. Axie Infinity is an excellent illustration of Web3 ideas in real-world gaming since, at one stage, it was had over 2.7 million different users per month playing its on-line game.
- Decentralised finance
Utilising decentralised apps for financial services is a novel notion. Decentralised apps are software programs that have a series of smart contracts attached to them. Protocols, also known as smart contracts, assist in specifying the unique features of decentralised apps. DeFi now offers alternatives to conventional financial services such as crypto lending and borrowing, whereby crypto owners may acquire loans using their cryptocurrency as collateral. Payment blockchains are an additional important feature of Web3 use cases in DeFi. The use of payment blockchains could significantly enhance existing payment systems. For instance, cryptocurrencies can distribute aid to individuals without bank accounts. An example of a blockchain-powered payment is BitPesa, used in countries such as Kenya, Nigeria and Uganda, and is reportedly growing 20% month-over-month.
- Creator economy
Creator economy is a prominent Web3 use case. Developers, artists and musicians connect directly with fans in the creator economy. Web3 allows creators to collaborate without intermediaries. Token Traxx is a good example of how Web3 is being used in the music industry. NFTs are a significant feature of the creator economy in real-world Web3 use cases. Additionally, high-profile NFT sales have empowered creative economies. Web3’s creator economy use case can let creators sell directly. Followers can also own the creator’s work exclusively, increasing their investment. Royalties are another benefit of NFTs in creator economy use cases. Smart contracts track secondary sales and royalties for NFT owners. Most importantly, NFTs are verifiable digital assets, enabling various applications outside creator economies.
So, Web3 is helping to create DAOs, the metaverse and DeFi, whereby transforming existing on-line experiences. Some Web3 use cases have had an impact, but others are still being developed. DAOs and DeFi are certainly active Web3 use cases and the metaverse is still growing. Web3 uses examples to demonstrate how Web3 concepts may improve data interchange, asset ownership and financial transactions. It may well prove prudent to study Web3 since its impact could have far reaching implications for business and society as a whole.
Digital Bytes has been written carefully to bring attention to developments in the Blockchain and Digital Asset sectors, but readers are recommended to take professional advice before taking any action based on any of the links and information above. TeamBlockchain Ltd does not take any responsibility for any action that may or may not be taken, loss or gain on receiving this edition of Digital Bytes.
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