Web3 Explained — What, Who, When and Why?

Peace Be Upon You All. Welcome to the Fourth Edition of "Decoded with Khalifa MBA", a newsletter focused on discussing and decoding technical concepts and topics down to the principles. My name is Khalifa MBA, and I will be your guide through the fascinating world of blockchain, Web3, cloud, AI, tech, and more.

In this newsletter, we will explore and break down complex technical concepts into simple, digestible terms, so everyone can understand and appreciate the world of technology. Our goal is to bridge the gap between technical jargon and everyday language, making it easier for everyone to understand the fundamental principles of these technologies.

Enjoy this piece, this one is about?Web3.

The Web — A Brief History Of The?Internet

First of all, let's start with the history of the Web itself before we dive into Web3. The way we communicate and access information has been completely transformed by the internet. The internet’s history is sometimes forgotten, despite the fact that it has become an essential part of our daily lives.

The United States Department of Defense created a system named ARPANET in the 1960s to facilitate information exchange between academic institutions, and this is where the internet had its start.

?Researchers could share data and work together on projects thanks to this network, which was made up of a number of interconnected computers.

In the decades that followed, the internet quickly developed. The first emails were sent and the first online message boards were set up in the 1970s. Domain Name Ssystems were created in the 1980s, enabling people to visit websites with the help of user-friendly URLs.

While employed at CERN in 1989, British scientist Tim Berners-Lee created the World Wide Web (WWW). To satisfy the need for automated information-sharing amongst scientists in universities and institutes around the world, the Web was initially designed and developed. It eventually developed into a massive network of interconnected computers and gadgets that allowed users to communicate, work together, and access information from anywhere in the world.

The dissemination of information was the main objective of the Web1 generation of the internet. Users were passive consumers of content who did not actively contribute to its development or distribution in this static, one-way communication system.

We now utilise the internet very differently as a result of Web2, the second generation of the internet. It brought social media, online markets, and other interactive platforms that let people connect with one another, produce and share content, and conduct online business. Users can now navigate the internet using a graphical user interface instead of difficult command lines thanks to the development of web browsers.

The internet has expanded and changed ever since. E-commerce platforms have revolutionised the way we shop and do business, while social media platforms have made it simpler than ever to interact with others and exchange information. The internet has altered the world in innumerable ways and has become a necessary instrument for communication, education, and business. The internet will continue to develop and change our lives in ways we can’t even begin to anticipate as time goes on.

What Is?Web3?

Web3 is a decentralised architecture that utilises a range of technologies to create a more user-centric and open internet. While blockchain technology is a critical component of Web3, it also incorporates other decentralised technologies such as peer-to-peer networks, decentralised storage systems, and cryptographic protocols. By offering a framework for the development of decentralised applications (DApps) and smart contracts, Web3 intends to give people more control over their data and digital identities. Web3 has the potential to revolutionise the way we communicate with digital services and one another by getting rid of middlemen and building a more open and democratic internet.

Types Of Web3?Systems

Web3 systems come in a variety of forms, each with unique characteristics and features. Some of the most popular ones include:

• Decentralised Finance (DeFi): A form of financial system based on blockchain technology that enables users to carry out a variety of financial activities — including lending, borrowing, and trading — without the aid of middlemen like banks or other financial organisations.
• NFTs (Non-Fungible Tokens): A class of digital asset that signify ownership of a special good or asset, like a work of art, a piece of music, or a collectible. NFTs are built on blockchain technology, which makes them verifiable and immutable.
• Social Media Platforms: Web3 social media platforms want to give users more privacy and data control. Instead of having their data owned and controlled by centralised social media firms, they are based on decentralised networks that enable consumers to own and control their data.
• Decentralised Autonomous Organisations (DAOs): A DAO is a form of organisation that runs on a decentralised network and is controlled by smart contracts. It makes it possible for decision-making to be transparent and decentralised, providing stakeholders more influence than a centralised authority.
• Web3 Marketplaces: Web3 marketplaces are decentralised systems that let buyers and sellers conduct business directly with one another. Blockchain technology is utilised by these marketplaces to offer transaction security, transparency, and trust.

These are only a few of the several varieties of Web3 systems that are being created. We expect to see more ground-breaking and disruptive uses for Web3 as it develops.

Benefits Of?Web3

Web3 has several benefits that make it a promising technology for the future of the internet. Some of these benefits include:

1. Enhanced Security: Web3 technologies are based on decentralised networks that employ cryptography and disperse data among a number of nodes, resulting in enhanced security. Because of this, it is very challenging for hackers to infiltrate the network and steal or corrupt data.
2. Improved Transparency And Accountability: With Web3, all transactions are recorded on a public blockchain that anyone can access. This implies that all parties to a transaction may confirm its authenticity and guarantee that it was correctly carried out. Users may trace and confirm transactions, which promotes accountability and transparency.
3. Reduced Middlemen: Peer-to-peer transactions are made possible on Web3, which eliminates the need for intermediaries like banks and payment processors. This leads to faster and cheaper transactions.
4. Decentralisation: It is built on decentralised technologies such as blockchain, which means that no single entity controls the network. This makes it more resilient and less prone to censorship.
5. Ease of Monetisation: It allows creators to monetise their content directly, without the need for intermediaries. This means that artists, writers, musicians and other content creators can earn a fairer share of the revenue generated by their work.
6. Content and Data Ownership: It lets users own and control their data, content and digital identities, which promotes greater privacy and security. This means that they can decide who has access to their data and how it is used. This is in contrast to the current centralised internet, where data is often collected and used without users’ consent.

Web3 offers a range of benefits over the current centralised internet. Its decentralised systems, enhanced security, improved transparency, and reduced reliance on intermediaries make it a promising technology for the future. Additionally, its ease of monetisation and content and data ownership features provide greater control and autonomy for users.

Challenges Of?Web3

While Web3 has many benefits, it also faces several challenges that must be addressed. Some of these challenges include:

• Technical Complexity: Because Web3 technologies are still in their infancy, they might be challenging to utilise for both users and developers.
• Lack Of Scalability: Web3 systems are currently not capable of handling high numbers of transactions due to their limited level scalability.
• Regulatory Uncertainty: For some sectors of Web3’, the regulatory environment is still unclear, which could be concerning to users and developers.

Criticisms Regarding Web3:

Web3 offers an intriguing vision of a decentralised internet, but it is not without its criticisms. The following are some of the criticisms of Web3, along with my counterarguments:

• Lack Of User-Friendliness: The fact that Web3 can be challenging for the average person to use is one of its critiques. Decentralised applications (DApps)’ user interfaces might be challenging because the technology is still in its infancy.

Although Web3 is still in its infancy and can be difficult to use, efforts are being made to make it more usable for the average person. For instance, many Web3 initiatives are spending money to make their user interfaces easier to use. Additionally, it’s likely that user-friendliness will receive more attention as Web3 gains popularity.

• Scalability Issues: Web3 is also criticised for its present scalability issues. The low transaction throughput of many blockchain-based systems can cause lengthy transaction delays and expensive transaction fees.

Scalability is a legitimate concern, however there are a number of ways being developed to deal with it. For instance, layer-two scaling techniques like sidechains and state channels can speed up transactions without compromising security. Additionally, the development of consensus algorithms that use less energy can lessen the environmental impact of Web3 technologies.s

• Lack Of Interoperability: Some critics argue that it is challenging to develop truly decentralised applications due to the lack of interoperability between various Web3 systems.

To solve this issue, though, there are currently initiatives in place. For instance, the creation of universal smart contract languages like Solidity and Move can aid in standardising the creation of smart contracts on many platforms. To facilitate smooth communication between various blockchains, cross-chain interoperability solutions like Setheum, Polkadot and Cosmos are also being created.

• Increased Inequality: Web3 has been heavily criticised for its potential to increase inequality, as early adopters may benefit more than others who join the game later. Early adopters, according to critics, are likely to have greater access to resources and technological knowledge, giving them an advantage in the emerging decentralised economy.

It’s crucial to keep in mind that while this might be the case in the near future, Web3 could eventually level the playing field. Decentralised networks enable more democratic engagement, enabling everyone to take part in the new economy and support its expansion.

• Risk Of Centralisation: Web3 is also criticised for not being genuinely decentralised because many projects are still in charge of a small number of developers or organisations with substantial control over the network. The present centralised internet may have similar problems as a result of this.

Decentralisation, according to Web3 proponents, is a spectrum, and even a partially decentralised system can provide significant advantages over a fully centralised one. In addition, the open-source nature of many Web3 initiatives enables increased community participation and monitoring, aiding in the reduction of power concentration.

Although Web3 has its difficulties, there are a lot of reasons to be optimistic about its future. Many of the current Web3 criticisms are likely to be addressed in the future with continued development and investment.

Some Popular Web3 Projects:

Despite these concerns, there are already several popular Web3 projects that are gaining traction. Here are a few examples:

• Ethereum: A blockchain platform that allows developers to create and deploy decentralised applications (dApps) and smart contracts.
• Filecoin: A decentralised storage network that enables users to securely and effectively store, retrieve, and exchange files.
• Setheum: A Secure Confidential And Interoperable Decentralised Cloud Compute And Storage Network With A Layer-2 Infrastructure for Subchains and Smart Contracts. It aims to improve upon Web3 and solve the blockchain trilemma by using a mixture of approaches to improve scalability, security, mass adoption, diversity, and ethics while preserving decentralisation and democratisation.
• Polkadot: A platform that enables data sharing and communication between several blockchain networks.
• Brave: A web browser that prioritises privacy and lets users receive cryptocurrency rewards for watching adverts.
• IPFS: A protocol for decentralised file storage and sharing.
• Uniswap: A decentralised exchange for trading cryptocurrencies and providing liquidity.
• OpenSea: A web3 marketplace for finding, buying, and trading NFTs.

Conclusion:

Web3 is a quickly developing technology that has the ability to completely change how we communicate online and with one another. Web3, which is still in its early phases, has the potential to alleviate many of the problems that the present centralised internet is experiencing, including worries about data privacy and security and an uneven distribution of power and resources.

But there are also issues and criticisms that need to be addressed, just like with any new technology. For Web3 to be created in a way that maximises its advantages and minimises its possible downsides, developers, entrepreneurs, and policymakers must collaborate. Web3 has the potential to bring in a new era of a decentralised, democratic, and equitable internet with the correct strategy.

Recognising the technology’s potential to revolutionise the internet as we know it is crucial, as is approaching it with an open mind. Web3 has the ability to develop more democratic and transparent government structures, as well as more egalitarian and transparent economic systems, while simultaneously giving users more privacy and security.

Remember, knowledge is power when shared. So if you find these insights valuable, I encourage you to share this newsletter with your colleagues, friends, family, and anyone else who might be interested in these topics. Let's work together to decode the most complex technical concepts and unlock their potential for real-world applications, and see you next time.

Best and Peace Be Upon You All,

Khalifa MBA (Muhammad-Jibril B.A.)