Web 3.0. also known as the Decentralized Web is the next generation of internet applications and services powered by distributed ledger technology.
The third generation of the internet mainly focuses on connecting and accessing data in a decentralized way, rather than having it stored in centralized repositories, with computers able to process information as intelligently as humans through technologies like Machine Learning, AI, BigData.
Web 3.0’s decentralized architecture seeks to address the shortcoming of the current phase of Web 2.0: the accumulation of power and control within centralized entities, user trust, privacy, and transparency. In simple words, we can say that the next generation of the internet is all about a more transparent and fairer network where anyone can take part without fearing a loss of privacy and security.
Since Web 3.0 networks run through decentralized protocols, which are also the founding blocks of blockchain and cryptocurrency technology, it's certain that we will see a strong convergence between these three technologies. This next generation of the Web reintroduces real ownership and verifiability. It also opens the Web back up to secure peer-to-peer interactions.
Unlike Web2, Web3 programmers/developers do not build and deploy applications that run on a single server or that store their data in a single database, rather web3 applications either run on blockchains, decentralized networks of many peers to peer nodes (servers), or a combination of the two. These decentralized apps are often referred to as dapps.
To bring off a stable and secure decentralized network, network participants are incentivized, and they also compete to deliver the highest quality services to users. Interestingly, cryptocurrency comes along with any conversation about Web 3.0, and this is because cryptocurrency plays a big role in many of these protocols. It provides a financial incentive in the form of tokens/coins for people who wants to participate in creating, governing, or contributing to one of the projects themselves.
Many web infrastructure protocols like Livepeer, Filecoin, The Grap, and Arweave have issued utility tokens that govern how the protocol functions. These tokens also reward participants at many levels of the network.
While Web 3.0 is in its initial stage. We already see some early-stage applications on the blockchain, and these applications have been doing great. Coins based on Web 3.0 applications on the blockchain have been performing well above expectations. In 2021, Web 3.0 tokens witnessed an approx 244% increase in value on average, outperforming Bitcoin's 37% growth within the same period. Some of the Web 3.0 coins like BitTorrent (BTT), Helium (HNT), and Livepeer (LPT) have shown annual growth of even up to 800%. The Web 3.0 tokens sector now has about 50 coins with more than $25 billion market value.
A number of Web 3.0 applications are already establishing themselves on various blockchains. For example, Livepeer protocol is on Ethereum and offers a marketplace for streaming applications. Livepeer marketplace offers cost-effective broadcast and streaming services directly at the Web 3.0 video stack layer. Other projects like Filecoin and Graph provide decentralized data management and storage networks.
Online payment processors like Stripe and Paypal have created billions of dollars of value in enabling electronic payments but still do not offer true international interoperability between participants. Users are also required to hand over their sensitive information and personal data in order to use them. While Web 3 Crypto wallets such as MetaMask and Torus offer you to integrate easy, anonymous, and secure international payments and transactions into web3 applications. Solana blockchain, one of the fastest-growing ecosystems in crypto provides several hundred digit millisecond latency and transaction costs of a small fraction of a penny.
Even though Web 3.0 tokens are not mainstream yet, the significant increase in value in past one year and their use cases are going to drive demand. Soon this sub-sector is going to be as prominent as DeFi.
Since Web 3.0 internet infrastructure enables trust when dealing with our data and money, it is inherently very valuable for humanity and significant innovations. The next internet, just like the current Web 2.0, is getting ready to accelerate the pace of change once again, with even larger game-changing innovations.