Web3: Why It Matters

Hi, I’m Bette Hochberger, CPA, CGMA. Today is Web3 Wednesday, so we are discussing the importance of Web3. But before we get into that, let me start off by explaining what it is.

What is Web3?

Web3 (also known as Web 3.0) is a term used to describe the vision of a new and improved internet, which is decentralized and empowers its users. This is achieved through the use of blockchain technology, cryptocurrencies, and non-fungible tokens (NFTs), which provide ownership and control to the users.?

The goal of Web3 is to shift the power dynamics of the Internet from centralized authorities to the people who use it. In other words, Web3 is a movement to create a more democratic and user-centric Internet.

Core Ideas?

• It’s decentralized: Rather than being dominated and owned by centralized systems, the internet’s ownership, and control are distributed among its builders and users in the Web3 model.
• It’s permissionless: Everyone has equal access to join?
• It has native payments: Web3 utilizes cryptocurrency as a means of running online transactions, eliminating the need for relying on the outdated infrastructure of banks and payment processors.
• It’s trustless: Web3 functions through the use of incentives and economic systems rather than relying on trusted third parties to ensure its security and efficiency.

Importance of Web3

Ownership

It lets you own digital assets, like in-game items, in a way that no one can take away from you. Unlike in web2, where the game creators can delete your account and lose your items, in Web3, you have direct ownership through NFTs.?

You can keep your items forever, and even if you stop playing the game, you can sell them to someone else and get your money back. This means you have more control and can get more value out of the things you own online.

Decentralized autonomous organizations (DAOs)

Web3 allows you to collectively own a platform through tokens that work like shares in a company.?DAOs?make decisions about the platform's future through decentralized decision-making.?Users with tokens vote on how resources get used, and the code automatically performs the result. Although there are technical definitions of DAOs, many Web3 communities are considered DAOs.?

Identity

In the current system, you have to create different accounts for different platforms. If you want to update your information, you have to do it separately on each account. Social sign-ins can be convenient, but it comes with a risk of censorship.

In Web3, you can use your Ethereum address and ENS (Ethereum Name Service) profile to control your digital identity across platforms. This way, you can have a single login that is secure, anonymous, and resistant to censorship.

Native Payments

In Web2, you need a bank account or have to rely on payment processors to make payments online. This system excludes those who don't have a bank account or live in certain countries.?Web3 allows you to send money directly using tokens like ETH in your browser without needing a third-party intermediary.

It’s important because it offers a new way of using the internet that is fairer and gives more control. Big companies do not control Web3; rather, their users own and operate it, which enhances its security and privacy.?This creates new opportunities for businesses and individuals and makes the Internet more inclusive and accessible.

I hope you learned something new today. As always, stay safe, and I will see you next time.