Web3 and Web2 are both different versions of the internet. Web2 is the current version of the internet that is characterized by centralized systems controlled by large corporations such as Facebook, Amazon, Google etc. Web3 however, is a decentralized version of the internet that is built on decentralized technologies. In this context, Web3 offers many benefits that Web2 cannot provide, and we will explore what Web3 offers that Web2 cannot.
1. Decentralization
Web3, the next iteration of the internet after Web2, is built on decentralized technologies like blockchain and distributed ledgers. Decentralization eliminates the need for intermediaries by creating a trustless system that allows for secure peer-to-peer exchange of value between parties without relying on third-party or central authorities.
By removing centralization, it brings greater transparency to systems as all participants have access to an open ledger where every transaction is recorded and immutable. This ensures accountability at each step of a given process and the authenticity of data contained therein. In terms of control, unlike in Web2 where users do not have full control over their virtual destiny, Web3 offers users more control over their data privacy since they can choose which information they want to share and how it’s shared rather than being forced into strict agreements with companies who collect user data en masse.
2. Interoperability in Web3
Interoperability is one of the cornerstones of Web3 technology. Web2 applications, like social media platforms that offer login functionality using email or phone numbers from different providers, have some form of interoperable features but are limited to these certain functions only. For example, the Google social login feature allows anyone to log in to any website that has the features integrated without having to create an account. In contrast, in Web3, with the aid of smart contracts, various applications, and services can communicate seamlessly without any central authority controlling any aspects involved.
This implies users can easily move their data, and digital assets (FTs or NFTs) between different dApps, wallets, exchanges, etc., securely while being able to retain full control over them at every stage which makes it truly an innovative technological leap forward compared to traditional or web2 centralized systems where users usually lack ownership rights on what’s theirs.
3. Tokenization
Tokenization is transforming the way businesses operate by enabling digital representation (tokens) of real-world assets or virtual assets to be traded in decentralized marketplaces. With its potential to digitize assets like real estate, art, and intellectual property rights, tokenization is introducing new and efficient value exchange models that reduce the need for intermediaries in decentralized platforms.
Tokenization is creating more transparent markets by automating governance mechanisms through smart contract programming functions. By doing so, decentralized platforms are eliminating the need for middlemen intervention and significantly reducing transaction costs while allowing easy and instant transfer of assets between parties to become liquid in nature irrespective of geographical location. This innovation allows businesses not only to access cheaper capital but also to create innovative modes around their existing economic systems.
4. Smart Contracts
Smart contracts are a key feature of Web3 platforms. They’re essentially self-executing digital contracts that use lines of code to enforce the terms agreed upon by all parties involved without requiring intermediaries. By automating tasks, smart contracts can greatly reduce transaction costs and facilitate faster and more secure value exchange in various industries including real estate transfer, supply chain management, banking services, etc., while ensuring transparency and accountability for all parties involved. This eliminates the need for intermediaries and enables trustless transactions.
Closing thoughts
Web3 offers a promising future for the internet with decentralized architecture and interoperable protocols. It enables new forms of value creation and exchange, as well as trustless economies through blockchain technology. Smart contracts on platforms like Ethereum, Solana, BNB chain, and Polkadot allow for the automatic execution of complex agreements which previously required huge overhead based on manpower and time. Although there are still a lot of things to do to make the innovation better, Web 3 is an exciting step towards a more open-source digital economy with global access.
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