Considering the number of investments and the accompanying buzz, Web3 or Web 3.0 is clearly the future of the Internet.
According Emerging researchthe global Web 3.0 market size reached $3.2 billion in 2021 and is expected to register a compound annual growth rate (CAGR) of 43.7% to reach $81.5 billion by 2030.
Web 3.0 is considered the third version of the Internet. A Twitter post from 2020 described the three iterations of the Web in these terms:
Web 1: Read
Web 2: read-write
Web 3: clean-read-write
— him.eth (@himgajria) May 29, 2020
Web 1.0 was “read-only”, with a static website having virtually no user interaction. Today’s Web 2.0 is read-write, embodied by the rise of social media and user-generated content. Web 3.0 will be read-write-clean because it will help secure data.
Raj A Kapoor, Founder and CEO of India Blockchain Alliance, explains how data is secured in Web 3.0: “When we use a platform like Facebook, our data is collected, held and monetized by them. In Web 3.0 , our data is stored on a crypto wallet. We interact with web 3.0 applications and communities through our wallet. We may also take our data with us when we log out.
Data security on Web 3.0 will be possible thanks to blockchain technology. Blockchain will help keep Web 3.0 information organized into blocks. These blocks are immutable and validated by consensus through asymmetric cryptography such as keys or digital signatures. Thus, users can access resources, applications, agreements and content with greater security.
Kapoor adds that Web 3.0 will enable data privacy because a crypto wallet is not easily tied to someone’s true identity. “While someone can see someone’s wallet activity, they won’t know it’s your wallet.”
While Web 3.0 is expected to streamline ever-growing crypto transactions, new use cases are likely to emerge.
Web3 can help people buy assets like virtual real estate through partial ownership, cut out middlemen in media and entertainment transactions, and decentralize businesses by enabling community ownership of businesses like than decentralized autonomous organizations, notes a On-chain analysis report.
While Web 2.0 is currently about the virtual world, Web 3.0 is about bridging the gap between the virtual and physical worlds. The “bridges” between the two worlds are several 21st century technologies like artificial intelligence, augmented reality, virtual reality (all three are the cornerstone of the metaverse), etc., which Web 3.0 can host.
“Brands across all industries are embracing Web 3.0 to deliver personalized and superior customer experiences in the immersive world. Gamification and marketing are the two primary Web 3.0 use cases that cut across domains,” adds Sharat Chandra, VP, Research and Strategy, EarthID.
If the recent On-chain analysis report is to be believed, the metaverse powered by blockchain, VR and NFTs (non-fungible tokens) will rule Web 3.0. In particular, as the report notes, games are set to grow exponentially in the Web 3.0 ecosystem.
Powered by blockchain, web 3.0 gambling is also referred to as gambling to win or gambling to own. In Web3 games, NFT assets belong to the players. They can also be sold – something impossible in Web 2.0 On-chain analysisciting a DappRadar report, says blockchain-based gaming activity has grown 2,000% since 2021.
In another significant development that will change the way people play games and operate on Web 3.0, several Web 3.0 companies have joined together to create the Open Metaverse Alliance of Web3 or OMA3. This alliance aims for a “metaverse without retaining walls, where individual platforms are interconnected and fully interoperable”.
The launch of OMA3 – a DAO with “inclusive, transparent and decentralized governance” – also signals the role of Web 3.0 in converging different elements of metaverse and blockchain technology.
As Web 3.0 positions itself as the future of the internet, there are also some red flags. Chief among them is “decentralization” – the main premise of Web3 itself.
“True decentralization remains elusive as all major blockchain protocols are controlled by a few select wallets,” Chandra says.
Decentralized finance (DeFi), a byproduct of blockchain technology, is also a cause for concern. The On-chain analysis report indicates that DeFi protocols have become the prime target for hackers looking to steal crypto in 2021.
Another problem is money laundering through DeFi. “So far in 2022, DeFi protocols have become the largest recipient of illicit funds, absorbing 69% of all funds sent from addresses associated with criminal activity,” the report said.