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Web2 versus Web3

What is Web2? #

Web2 is the name for the internet as it is known today. Technology giants like Google, Facebook and Microsoft are in control and users can interact with it and their products.

To better understand what Web2 is, it is important to go back to the first version; Web1. Web1 is the first form of the web. It was “founded” in the early 90s and was a form of the Internet where users could only view information – It was like an encyclopedia, but on a computer. Users could only navigate from page to page and read the information on it. Web1 was not interactive and very superficial. That does not change the fact that it was a very impressive development back then.

At the time, it was not called Web1 yet. That only happened when the shift towards Web2 took place, which started around 2001. During the Web2 era, the Internet became increasingly interactive. In addition to clicking around on the web, users were also able to add or upload things, for example, in the form of social media. The internet became a way for us to keep in touch with friends and family.

In addition to this, Web2 also has a number of other features, which some are not be a big fan of. This refers to the popular saying: “If something is free, you are the product”. Websites that are built on Web2 collect data about their users, which are then sold to the advertising space. Hence, there’s a lot less privacy since the arrival of Web2. It also ensures that power is much more in the hands of a number of large parties, such as Google and Facebook.

Fortunately, there is a new type of web in which our data is no longer sold and the power is no longer in the hands of large parties, but rather of the user. This is Web3. According to Web3 enthusiasts, this form of the web will completely change our lives.

What is Web3? #

With the development of Web3 everyone would, as it were, become the masters of the web. ‘All together’ means the users in this case. Power over the internet would no longer be in the hands of a few large parties, but in the hands of the user.

Users could, for example, see this reflected in what can be seen on platforms such as Instagram or Facebook. On these platforms, Meta mainly determines what users will see, in particular by means of algorithms, but also by selling to the advertising space. When no one has power over what users see, the users really decide themselves what they want to see.

There is a pretty good chance that cryptocurrency and blockchain will make a huge contribution to Web3. Instead of being centrally regulated, as in Web2 (centrally as in: with the large parties that hold power), Web3 will be a lot more decentralized. Crypto and blockchain naturally fit this image perfectly. The blockchain is also decentralized and it is also a ledger in which data can be stored.

In addition, the applications of smart contracts can be of great value for the development of Web3. Smart contracts are fully digital contracts, which consist of computer code. By means of smart contracts, certain processes can be performed fully automatically, without anyone actually having to do anything.

With Web3, the internet would therefore deal much smarter and efficient with the data it has at its disposal. This data could also be processed automatically and decentralized for the most part. Everyone can contribute to web3, instead of everything being determined by major parties.

The differences between Web2 and Web3 #

Web2 and Web3 could theoretically coexist, yet experts believe that we will see more and more transition to Web3 in the coming years. This may all sound very unclear, because what exactly are the main differences between Web2 and Web3?

The two main differences between Web2 and Web3 is the way that data is distributed and how ownership works.

The distribution of data #

As has discussed in the previous section, in Web2 all data is in the hands of a number of large platforms. These are, for example, Google, Facebook and Amazon.

Because users use their platforms, these parties know a lot about their users. For example, they know their users’ names and ages, but they also know what their users are interested in. With this (private) data big parties can do lots of different things, which gives them a lot of power. With Web3 this is completely different – Users do not really use a platform, but a blockchain in which no one controls all the data.

Web Ownership #

In addition to the fact that users have more ownership over how their web experience will look like, they can actually help with making decisions for platforms in terms of growth.

This can be done in the form of a DAO. DAO stands for decentralized autonomous organization and is basically a business form in which a company can act on its own, and the future of the company is determined by its users. Typically, this is done by using governance tokens. When a user holds 1 governance token, it is worth 1 vote. Users can then vote for specific proposals via a panel and in this way directly participate in decisions about the company, which is in this case the platform.

After Instagram was taken over by Facebook, the data was used to sell ads. This has not happened before. If Instagram had been a DAO, Instagram users could have voted against this development.

You might be thinking, how can a business ever be built successfully if the users vote on everything? Without these ads, Instagram probably would never have become profitable. However, governance token holders obviously have an interest in the growth of the company – Mainly because governance tokens are tradable. As the company grows, the value of their governance token is likely to increase. By trading or selling these governance tokens, users can earn money from the growth of the company.

Updated on May 31, 2022
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*Paid Advertisement. Not financial advice. RugDoc is not responsible for the projects showcased here. DYOR and ape safu.