What Is Web3?
Web3 refers to the vision of a new phase of the internet built on blockchain technology — one characterized by decentralization, user ownership of data and digital assets, and reduced dependence on large platform intermediaries. It represents a proposed alternative to the current “Web2” internet dominated by companies like Google, Meta, Apple, and Amazon.
The term gained significant cultural currency during the 2020–2021 crypto bull market, when NFTs, DeFi, and metaverse applications captured mainstream attention. Its proponents see Web3 as a fundamental reimagining of internet ownership and governance; its critics see it largely as hype.
Web1, Web2, and Web3: The Evolution
- Web1 (1990s–2000s) — Static, read-only web. Users consumed content created by a small number of publishers. Websites were informational; interaction was limited.
- Web2 (2004–present) — Read-write web. Social media, user-generated content, and platform economies emerged. Anyone could create and share content. But power concentrated in platforms that monetize user data and control access.
- Web3 (emerging) — Read-write-own web. Blockchain enables digital ownership, enabling users to hold verifiable assets (tokens, NFTs) that platforms cannot unilaterally remove, and to participate in governance of the protocols they use.
Core Technologies Behind Web3
- Blockchains — Decentralized ledgers that record transactions and state changes without a central controller. Ethereum is the primary platform for Web3 applications.
- Smart contracts — Self-executing code on blockchains that automatically enforce agreements without intermediaries
- Tokens and NFTs — Blockchain-based digital assets representing currency, governance rights, or unique items
- Decentralized autonomous organizations (DAOs) — Organizations governed by token holders through on-chain voting rather than traditional management structures
- Decentralized storage — Protocols like IPFS and Filecoin store data across distributed networks rather than centralized servers
- Wallets — User-controlled cryptographic keys that serve as identity and asset management across Web3 applications
The Promise of Web3
Web3 advocates argue it could resolve fundamental problems with the current internet:
- Users would own their data and digital identities, not surrender them to platforms
- Creators would receive direct compensation without platform intermediaries taking large cuts
- Financial services could be accessed without banks or payment processors
- Censorship-resistant applications could operate beyond the reach of any single government or company
- Open protocols would enable greater interoperability and user choice
The Criticisms of Web3
Web3 has attracted substantial and substantive criticism:
- Scalability — Most blockchains process far fewer transactions per second than traditional systems, at much higher cost
- User experience — Managing cryptographic keys, wallets, and gas fees is genuinely difficult and error-prone for ordinary users
- Decentralization in practice — Much of “Web3” runs on centralized infrastructure (AWS, Cloudflare) and is controlled by small numbers of large token holders
- Speculation vs. utility — Most Web3 activity has been speculative rather than genuinely useful to ordinary people
- Environmental impact — Proof-of-work blockchains consumed vast energy; Ethereum’s 2022 shift to proof-of-stake reduced its energy use by ~99%
Where Web3 Is Heading
The most credible near-term applications of Web3 technologies include cross-border payments, decentralized identity, programmable finance, and tokenization of real-world assets. Whether the broader Web3 vision of a decentralized internet becomes mainstream depends on whether the technology can overcome its scalability and usability limitations and offer compelling advantages over existing alternatives.
