What is Web3? Definition, Characteristics & Examples

Web3 or Web 3.0 is a new internet ecosystem that prioritizes decentralization and does not rely on central authorities for ownership of assets and user data.

As the latest generation, Web 3.0 is developed with blockchain technology, enabling secure and transparent peer-to-peer interactions without requiring intermediation from third parties.

Learn more about what is Web3, its characteristics, advantages, and some examples in the following article.

What is Web3? 

Web3 is the third generation in the evolution of web technology that emphasizes decentralized blockchain systems.

In this era, the ability of websites to process information is believed to increase rapidly, accompanied by a smarter approach through the implementation of big data, machine learning, and DLT (Distributed Ledger Technology).

History of Web3

According to the Harvard Business Review, the Web3 era began when two scientists named Scott Stornetta and Stuart Haber released blockchain for the first time.

Looking back at its history, the first-generation web (Web 1.0) era began in the early 1990s. Back then, Web 1.0 was still not optimal in filtering the abundance of information on the internet. However, this problem began to be addressed as the internet evolution entered the second-generation era, Web2, in the 2000s.

Web2 is the second-generation web that is still highly used to this day. In terms of capabilities, Web2 has indeed proven to make the internet much more interactive thanks to HTML5, JavaScript, and CSS3 which support platforms like social media, blogs, and cloud-based services.

However, over time, Web2 has been largely dominated by giant companies such as Meta, Google, Amazon, and many others.

Therefore, concerns about privacy, data security, and the dominance of large corporations have prompted initiatives for change towards a more decentralized direction, namely Web 3.0 or Web3 era.

Technologies Supporting Web3

The technologies supporting the development of Web 3.0 are as follows:

1. Blockchain

Blockchain is a decentralized system consisting of a series of interconnected blocks, each storing several transactions.

One of the benefits of blockchain technology in the Web3 era is enabling users to conduct and record all transactions more transparently.

Whenever a transaction is recorded, a new block will be added. This way, there is no single authority capable of controlling the blockchain, making the system more resistant to manipulation.

2. Smart Contracts

Smart contracts are automated programs designed to execute agreement negotiations automatically according to specific conditions.

These contracts function within the blockchain framework and can streamline transactions by ensuring automatic payment fulfillment once all predetermined conditions are satisfied.

3. Digital Assets & Tokens

This technology refers to digital assets recorded on the blockchain, including cryptocurrency, stablecoins, non-fungible tokens (NFTs), and other digital currencies issued by central banks.

Essentially, these tokens are a cryptographic representation of ownership rights to physical and digital assets, such as real estate, stocks, art, or certain commodities.

One advantage of empowering digital assets is enabling clear and verified asset ownership with faster and safer transfer activities.

4. WebAssembly (Wasm)

WebAssembly, or Wasm for short, is a binary instruction format used to create a virtual machine on the web.

This means that code in the WebAssembly format can be executed in a web browser quickly and securely. However, WebAssembly code runs in a special sandbox within the browser, limiting its access to the user's local files.

With WebAssembly, development teams can create web apps faster and more efficiently. Additionally, its performance is considered much more efficient than using traditional web technologies like JavaScript.

Web3 Characteristics

After understanding what is Web3 and its brief history, it's important to grasp its characteristics. Let's delve into the explanations below.

1. Decentralization

Web 3.0 embodies the concept of a Decentralized Autonomous Organization (DAO). This implies that the web network in this generation cannot be controlled by any authority.

The reason is simple. Web 3.0 is specifically built using a blockchain network distributed worldwide.

Blockchain can store transaction records across various nodes or computers connected to the network. Moreover, each node holds a complete copy of the blockchain.

Due to this structure, no single entity can control or wield full authority over the Web3 network.

2. Trustless

All transactions within Web 3.0 can be validated directly without requiring third-party intermediaries, as they were executed using cryptography and consensus algorithms.

Therefore, this web generation can validate transactions while maintaining the integrity and security of the network.

3. Permissionless

This latest generation of the Internet doesn't require approval from specific entities, allowing anyone to participate within the network.

With Web 3.0, you won't be asked to register as is often the case in Web2, which typically mandates users to agree to terms and conditions from specific authorities.

4. Native Payment 

Some transaction activities within the Web 3.0 network can be paid using cryptocurrency or digital tokens.

It is a new era where you don't need third-party institutions like banks or PayPal to make payments, which consequently makes the process much more efficient.

Advantages and Disadvantages of Web3

Here are some of the advantages and disadvantages of Web 3.0:

Advantages of Web 3.0

• In Web 3.0, every user has greater control over their online data and identity.
• The network does not rely on central authorities which application resilience.
• Emphasizes transparency throughout transaction processes.
• Much more responsive with the integration of Artificial Intelligence and machine learning.
• Provides higher privacy security.
• Enhances user experience (UX) through semantic web-based platforms.
• Decentralized financial systems make it easier for users to transact, sell products or services, and obtain loans without permission from central authorities.

Disadvantages of Web 3.0

• Blockchain technology often faces challenges in scalability.
• Its usage is not widespread and may not be accessible without sophisticated gadgets with cutting-edge technology.
• There is potential for cybercrime such as 51% attacks, consensus vector attacks, and attacks on application layers built on top of the blockchain.
• Due to its decentralized nature and lack of requiring permission from specific authorities, it often poses challenges in terms of regulation and legal compliance. 

Web3 Examples

If you're curious about some examples of services accessible in this era, cmlabs has summarized them for you.

• Bitcoin: A decentralized digital currency enabling peer-to-peer transactions.
• NFT (Non-Fungible Token): Tokens are stored with a cryptographic hash, making each unique and non-duplicable.
• Steemit: A social media platform built on blockchain rewarding users for creating content.
• DeFi (Decentralized Finance): Technology transforming conventional central bank money into digital assets.
• Sapien: A social network designed to be decentralized using Ethereum.
• dApp: Applications built on blockchain and designed using smart contracts.
• OpenSea: A decentralized marketplace for selling, buying, and trading NFTs.
• Diaspora: A social networking platform giving users control over managing their data and privacy.
• Augur: A decentralized stock market platform.

That was the explanation of what is Web3, its history, the technologies within it, the drawbacks and advantages, as well as some examples of services accessible within Web3.

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