What does Web 3 promise?

Web 3 offers a wide range of services, and the well-known ones are Payments, NFTs, and trading on centralized exchanges. Advanced services like staking, borrowing and lending, and trading on decentralized exchanges are still yet to be well-known worldwide. (Coinbase, 2023.)

These services have an underlying promise that guides their utilization. With blockchain as the underlying technology in the Web 3 space, the following offerings are made:

Efficiency, transparency, and Equity: Most blockchains operate on open-source software, meaning anyone can access and inspect the underlying code. This openness facilitates security audits of cryptocurrencies such as Bitcoin on the blockchain network. This also means that there is no central authority that control Bitcoin’s code or how it is edited. As a result of this, anyone can propose changes or enhancements to the system. If a consensus is reached among most network users that the proposed code version with the upgrade needs to be more reliable and valuable, then Bitcoin can be upgraded accordingly.

Scalability: In Web 3, mechanisms are being put in place to handle a growing number of users and transactions without compromising efficiency. Ethereum, exemplifying this, integrated a proof-of-stake consensus mechanism rather than the proof-of-work model.

Real Assets Tokenization: With real asset tokenization, users represent physical assets (like real estate or artwork) as digital tokens on the blockchain. This enables fractional ownership and a more effortless transfer of ownership. Platforms like ‘RealT’ tokenize real estate properties, allowing investors to buy and trade property-backed tokens.

Decentralized Identity: Decentralized Identity (DID) allows users to control their data identity without relying on central authorities. This enhances security and privacy in the system. The ‘DID’ specification by the W3C outlines a framework for DID management, enabling users to prove their identity without sharing more information than necessary.

Consumer Protection: Users’ rights and security are emphasized on the Web 3 space. Smart Contracts and escrow mechanisms provide safeguards in ensuring the possibility of this decentralized system. Platforms like OpenSea provide a marketplace for NFTs (non-fungible tokens) with features to prevent fraud and counterfeit art.

These features collectively contribute to shaping the foundations of the Web 3.

Is Web 3 Worth Adopting?

Despite the innovation of Web 3, it has yet to gain widespread traction. The majority of the traction so far is within the crypto community. According to a survey by Coinbase in 2023, 82% of the surveyed population are somehow aware of cryptocurrency, and 66% have heard of at least a specific Web 3 use case. However, basic familiarity with Web 3 does not necessarily indicate subsequent usage. Despite social media being the primary medium for increasing awareness around Web 3, many people still lack substantial knowledge of it.

Image credit: TechFi

However, Coinbase predicted that Web 3 adoption will increase by 50% over the next three years. Although, as of now, trading on a centralized exchange and playing crypto games are the two most used Web 3 products, in the future, more people will be open to the idea of using cryptocurrency as a means of payment, especially in developing economies where access to financial product is limited.

Individual interpretations shape the extent of Web 3 adoption. While blockchain technology remains a prominent aspect of Web 3, it is essential to note that Web 3 is not solely focused on migrating the entire Internet to blockchain and cryptocurrencies. Instead, its core essence lies in transforming how identities and data are managed within the context of the World Wide Web.

Measuring the adoption of Web 3 is challenging due to the lack of a clear definition for its services. An assessment could be made using metrics such as active users on pure Web 3 platforms and applications like MetaMask. As of March 2023, the most recent report indicates that MetaMask has reached an active user count of 15 million, which might indicate the increasing interest and utilization of Web 3 technologies.

NFTs (Non-Fungible Tokens) have also gained significant popularity as a means for people to engage with the Web 3 environment. NFTs are digital assets built on blockchain technology, each possessing a distinct and singular identity. Unlike conventional cryptocurrencies like Bitcoin and Ethereum, which are fungible i.e. (each unit is equivalent and exchangeable with another unit of the same value), NFTs are non-fungible. This signifies that each NFT is exceptional and cannot be directly swapped on a one-to-one basis with other tokens due to their unique attributes and characteristics.

Image Credit: CoinDesk

The registered user base on OpenSea, an NFT marketplace platform, currently exceeds 1 million. This statistic underscores the substantial attention that NFTs have garnered within Web 3. NFTs have attracted significant interest, from the widespread popularity of crypto punks and bored apes to their usage in representing in-game assets. This surge in interest has turned NFTs into a symbol of both potential financial gain and technological advancement.

The growing recognition of the Web 3 landscape and its gradual integration demonstrates that the world is steadily embracing the reality of this new era. Blockchain is emerging as a technology that people interact with daily. This transformation is an ongoing journey, and it is foreseeable that we will soon collectively embrace the full potential of this technology in various aspects of our lives.

The world is inexorably moving towards Web 3. And blockchain, its underlying technology, is poised to become pervasive in our daily interactions. This evolution is inevitable; before long, it will become our norm.

The significance of the security within the system cannot be emphasized enough. Web 3 systems are built on a decentralized network, reducing the reliance on central authorities. Its secure nature ensures that data and transactions are tamper-proof and resistant to attacks, maintaining trust in a trustless environment.

The use of smart contracts, which are self-executing, automates processes without the need for intermediaries. The nature of the ledger, which is immutable, makes it a much more secure space. For a hacker to succeed in the system, such an individual would have 51% control of most of the networks’ mining power. And this is practically impossible.

Undeniably, the spectrum of Web 3 platforms and blockchain applications is rapidly expanding. While the adoption of Web 3 varies based on individual perspectives and the level of scrutiny, the enduring presence and influence of the Web are indisputable facts.

Would Web 3 adoption Gradually Scrap Out Web 2?

Web 3 is an evolution of the current Web 2, and not a replacement. While some aspects of Web 2 might evolve or adapt to the new technologies and concepts of Web 3, it is more probable that both webs will find ways to coexist. The shift might not come as a sudden replacement but rather as a gradual integration of decentralized technologies, blockchain, and other advancements into the existing framework.

How Are the Current Power Players Reacting to Web 3?

It is evident that the concept of Web 3 entails a shift of authority from centralized entities to the users themselves. This shift is met with resistance from the established power players of Web 2, as it challenges their positions. Many of these entities might experience disadvantages in the Web 3 landscape. Thus, it is expected to witness reactions from governments and major corporations, which may involve blocking or hijacking the Web 3 movement.

This resistance is a response to their interests being challenged. It is accurate to acknowledge that not everyone will benefit equally from Web 3, as it centers around empowering users. Larger corporations view it unfavourable due to potential profit losses, while governments oppose it because they believe that they may find it harder to govern.

Of course, there would be losses and there would be gains. However, there might come a time when those who initially opposed Web 3 will recognize its potential and opportunities, prompting them to shift their stance and embrace it.

Or maybe not; maybe there would be permanent losers, and they would continue to aggressively resist change.

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