The internet is undergoing a monumental shift towards a more open, decentralized, and user-controlled web, commonly referred to as Web3. But what exactly does Web3 mean and what is the Web3 protocol that is powering this next generation of the internet?
Table of contents
- Defining the Web3 Protocol
- Can Web3 Exist Without Blockchain?
- Understanding the Difference Between Web3 and Crypto
- Is Bitcoin a Web3?
- How to Access and Use the Web3 Protocol
- Owning Your Digital Life on Web3 Protocols
Defining the Web3 Protocol
A Web3 protocol refers to the various open-source software protocols and cryptographic standards that facilitate decentralized apps (dApps) to run on blockchain networks. It enables the development of applications and ecosystems without centralized intermediaries.
The Web3 protocol allows the creation of tamper-proof decentralized digital records and seamless exchange of value on peer-to-peer networks. This eliminates single points of control or failure while increasing transparency, efficiency, and interoperability between systems.
Some of the defining capabilities enabled by Web3 protocols include:
- Decentralized infrastructure – Based on decentralized node infrastructure like peer-to-peer networks rather than centralized servers. This avoids censorship by single entities.
- Trustless exchange – Allows trustless transactions between participants without requiring centralized intermediaries through features like smart contracts.
- Transparent processes – Provides radically transparent processes through public blockchains allowing anyone to audit and verify transactions.
- Ownership and control – Gives users ownership of digital assets, data, and identities while controlling how value and information flow.
- Interconnected systems – Allows connection between various systems and applications to enable unified ecosystems and economies.
In summary, the Web3 protocol facilitates an internet owned by builders, creators, and communities rather than corporations. It is the technological foundation supporting decentralized and distributed applications.
Can Web3 Exist Without Blockchain?
Blockchain technology and Web3 are deeply intertwined – Web3 leverages several important technical innovations pioneered by blockchain networks. However, Web3 represents a broader cultural and technological movement beyond any single solution.
The core values that Web3 embodies around decentralization, openness, and user empowerment can theoretically be implemented without blockchain if alternative distributed data models, networking protocols, consensus mechanisms, and incentive structures are used.
Blockchains handle critical functions like:
- Establishing Decentralized Consensus – Blockchains allow parties to reach an agreement on the state of a database/ledger without central coordinators. This is done through consensus models like proof-of-work and proof-of-stake.
- Enabling Transparent Processes – Data integrity and transparency are enabled through cryptographic auditing of changes to decentralized and distributed blockchains visible to all parties.
- Facilitating Trustless Transactions – Smart contracts allow autonomous programmable transactions between peers without intermediaries through business logic encoded on blockchains.
- Coordinating Compute and Economic Activity – Blockchains coordinate decentralized computing, information transfer, and economic activity between entities through shared incentivization and security models.
While blockchain provides the currently most viable data model for Web3, the continued evolution of distributed systems may yield alternatives for decentralized coordination and information sharing without blockchains in the long term. Cryptographic access controls, peer-to-peer networking/computing, and consensus algorithms will continue advancing to widen technology options for Web3.
However, in the world today, it is blockchain forming the foundation for Web3 – powering vital functions in a trustless, serverless environment while aligning network incentives and economics.
Understanding the Difference Between Web3 and Crypto
There is often confusion between Web3 and cryptocurrency/crypto as many people use these terms interchangeably. While Web3 builds on innovations like cryptography, tokens, and consensus popularized by cryptocurrencies to power decentralized apps and ecosystems, there are several key differences:
- Focuses on rebuilding internet infrastructure and applications that run in a decentralized environment powered by blockchains and blockchain-like networks.
- Driven by usability – Web3 applications aim for seamless user experiences hiding complex decentralization from average end users.
- The scope goes beyond finance – Web3 looks to build open ecosystems and recreate traditional web services like social media, video sharing, cloud storage, etc in a decentralized way.
- Created as peer-to-peer electronic cash and payment networks without centralized intermediaries.
- Primarily focused on transferring value – enabling digital payments and transactions.
- Leverage complex cryptography and emergent consensus mechanisms like blockchain to enable trustless value transfer without third parties.
So while Web3 builds on the technology foundations laid by cryptocurrencies and decentralized networks like Bitcoin and Ethereum, its scope is far broader encompassing all kinds of internet applications, data, and ecosystems.
Cryptocurrencies focus mainly on payment use cases. Web3 uses similar technical underpinnings to reinvent how all traditional online services – from messaging to social media to cloud storage – can work without centralized platforms and providers.
Is Bitcoin a Web3?
Bitcoin is considered one of the precursors to Web3 as it pioneered decentralized digital money and payments powered by a blockchain-based infrastructure. However, there are a few reasons why Bitcoin alone does not constitute a full Web3 stack:
- Bitcoin was created as decentralized electronic cash – a peer-to-peer payment network. It does not natively support complex smart contract-powered decentralized applications like Web3.
- The Bitcoin network has limited programmability and scripting capability making building scalable Web3 apps difficult compared to platforms like Ethereum.
- Bitcoin focuses mainly on payment use cases. Web3 requires platforms that can support entire ecosystems of interconnected dApps across domains.
However, through innovations like sidechains, layer 2 protocols, and pegged assets, Bitcoin is increasing its interoperability with the emerging Web3 ecosystem. And sharing the ethos of decentralization, security, and transparency with Web3 philosophies.
Projects like Rootstock allow smart contracts and sophisticated dApps to be built on Bitcoin taking advantage of its robust blockchain infrastructure. Through atomic swaps and crypto bridges, Bitcoin can interconnect with other Web3 protocols.
So while Bitcoin does not naturally constitute a Web3 fabric, it is an integral precursor, can increasingly integrate into broad Web3 ecosystems as they develop, and shares much of the same foundational principles as the decentralized web.
How to Access and Use the Web3 Protocol
If you want to start exploring and using the emerging set of services in the Web3 landscape, here is a quick guide:
Step 1 – Get a Crypto Wallet
To interact with Web3 services, you need a crypto wallet – an app that lets you securely store, receive, and send cryptocurrencies and tokens as well as connect with decentralized applications.
Popular Web3 crypto wallet options include MetaMask, Coinbase Wallet, TrustWallet, etc. These wallets give you crypto addresses, private keys, secure access to decentralized networks, and more.
Step 2 – Acquire Crypto to Use on Web3 Platforms
You can then buy cryptocurrencies like ETH to power transactions and activities over Web3 protocols and pay for services if needed. Many crypto exchanges like Coinbase allow this. You can transfer the acquired crypto into your wallet.
Ethereum is currently the go-to currency for most Web3 platforms though there are others also like Bitcoin and stablecoins.
Step 3 – Explore Exciting Web3 Offerings
There’s a rapidly expanding universe of Web3 DAPPs and services you can experience with just a crypto wallet and some tokens. These span domains like:
- Social Media – Platforms like Lens Protocol allowing decentralized social media free from censorship
- Cloud Storage – Services like Storj, Filecoin, and Sia facilitate serverless data storage
- Gaming – Sandbox, Axie Infinity built on Web3 allowing true ownership of in-game assets
- Virtual Worlds – Decentraland making user-owned virtual worlds running on blockchains
- Identity & Credentials – Self-sovereign IDs managed by individuals, not governments or corporations
Take your pick from this expanding buffet of blockchain-based applications!
Owning Your Digital Life on Web3 Protocols
Web3 fueled by open blockchain protocols allows regular internet users like us to take true ownership over our data, identity, assets, and creations in a way not possible before on the permissionless innovation ground these technologies provide.
Through disintermediating giants and gatekeepers, the Web3 paradigm brings back the original vision of an internet owned by communities, not corporations while unlocking new business models and economic opportunity.
So strap in for the ride as we advance steadily towards a user-controlled internet owned by the builders and creators driving it! Exciting times are ahead as the Web3 revolution kicks into high gear giving individuals true freedom, control, and opportunity.