What is Web 3.0?

It’s been more than 30 years since the internet was invented, and so much has changed in the digital world since then. But there’s one phrase in particular that’s cropping up in current discussions about the future of the internet: Web 3.0.

This term refers to an entirely new digital, experiential world. And over the next few years, Web 3.0 may significantly change how we interact with the internet. This article explains exactly what Web 3.0 means, how it’s different from other versions of the internet, and where you can already find Web 3.0 in action today. Ready? Let’s jump in!

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The internet grows at breakneck speed, with exciting new developments coming almost every single day. Since it was first created, the internet has undergone some kind of major evolution every decade or so. But Web 3.0 isn’t just a minor update—it’s a glimpse of what the internet of the future can bring. This all sounds great, but what does Web 3.0 even mean?

The idea and vision behind Web 3.0 is a digital, decentralized ecosystem. In other words, the internet will no longer be dominated by a few major corporations, but will become a democratic environment that is designed and managed by its users. Data will be stored and shared in a decentralized fashion, meaning that users will have absolute control over their own data.

Blockchain technology provides the foundation for Web 3.0 and enables core aspects of this version of the internet. Instead of having to connect to large, centralized platforms for storing data, Web 3.0 relies on public blockchains, or peer-to-peer organizations.

As with all innovations, there are pros and cons to Web 3.0. One of the greatest advantages is greater data protection. Users will no longer have to entrust their personal data to individual companies. Instead, the blockchain lets them publish their data via apps or services while still controlling the data itself.

The democratic nature of Web 3.0 also means that the powers of large internet platforms—like social media—will be significantly restricted, since users will also control the content on the platform. The idea is that this will reduce censorship on the internet.

Although the technology is there, Web 3.0 is still in its infancy—it’s more of a vision than a concrete application. And a potential transition from Web 2.0 to Web 3.0 won’t be easy, as they’re fundamentally different in a number of ways. What’s more, blockchain technology would need to be “installed” across all internet-based interfaces in order to make a decentralized  possible. This brings us to another disadvantage: the increased energy consumption needed to power large blockchain servers.

Although Web 3.0 does promise reduced censorship and greater autonomy over personal data, this could also pose some dangers—for example, the spread of misinformation.

As the name suggests, Web 3.0 is a more evolved version of the internet. While it maintains some of the ways of using Web 2.0 and Web 1.0, there are clear differences between the three versions.

Web 1.0 represents the beginnings of the internet, from 1991 to 2004, and was used for one thing in particular: consuming content. Providers made information available and users consumed it. There wasn’t intended to be any direct interaction between the two sides. In the early days, even websites were mostly static.  

Starting in 2004, the digital ecosystem changed, slowly but surely. More and more large-scale online platforms were launched and developed. These enabled dynamic content to be published and shared with other users, and Web 2.0 was “born.” It is also referred to as the “social web” because it allowed the social possibilities of the internet to come into focus. Platforms such as Facebook, MySpace, and Twitter gained global popularity.

Although the main differences between Web 1.0 and Web 3.0 are clear, Web 2.0 and Web 3.0 are not actually that dissimilar. The biggest difference between the two versions is how data is used and shared. In addition to using blockchain technology, which isn’t used with Web 2.0, Web 3.0 promises to be more interactive and autonomous. Plus, it could enable other innovations, such as the metaverse, and support the unrestricted use of cryptocurrencies.

When we talk about Web 3.0, the term “Semantic Web” often comes up as well. This term was coined by Tim Berners-Lee, the inventor of the World Wide Web. Although Web 3.0 and the concept of the Semantic Web do overlap in some areas, there are distinctions between the two.

Web 3.0 represents a completely new, digital ecosystem, whereas the Semantic Web is “just” another evolution of Web 2.0. On the Semantic Web, information can be read by machines as well as by humans. Therefore, information can be interconnected and automatically assigned certain levels of meaning. This will make the vast majority of information more accessible for users and make it easier to identify relevant content. 

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Since Web 3.0 and cryptocurrency are both based on blockchain technology, it’s hardly surprising that the two will be closely linked in the future. It would be safe to assume that cryptocurrencies will be almost as indispensable for Web 3.0 as blockchain is. Why? Because they both have the three key factors needed for this new online ecosystem: decentralization, unlimited potential, and trustworthiness. In particular, trustworthiness is a key promise of Web 3.0, thanks to its data storage and preservation methods and through the use of smart contracts.

It isn’t just older, better-known cryptocurrency coins such as Ethereum (ETH), Cardano (ADA), and Polkadot (DOT) that Web 3.0 users will find interesting—they’ll also be able to explore lesser-known coins such as Helium (HNT), The Graph (GNT), and Theta (THETA). Helium, for example, aims to create a decentralized blockchain network that can be used on internet-enabled devices. All users will be able to access this part of the internet, which will be strong competition for classic internet providers.

Many companies and investors also see great potential in Web 3.0 and have already started to invest large amounts of capital in the internet of the future. Approximately €25 billion has been invested in crypto-startups and scaleups that want to be at the forefront of developing and preparing the infrastructure of Web 3.0. This could have a downside, of course—these large investments show that Web 3.0 is unlikely to be quite as decentralized and user-controlled as its advocates might hope.

If you want to get involved in the world of Web 3.0, it’s possible to buy shares in companies that are already experimenting with it. Tesla, Google, and Facebook are already using dynamic internet functions to a limited extent, so their securities can be seen as shares in Web 3.0. In the future, you may also be interested in other Web 3.0 companies, such as Paxos, a blockchain infrastructure startup, and BlockFi, a crypto “unicorn” (a tech company valued over $1B that’s privately held) specializing in loans backed by crypto assets. 

Another popular trend in the years ahead will be the metaverse. Although it’s often incorrectly grouped together with Web 3.0—which is understandable, since the technologies are similar—there are actually significant differences between Web 3.0 and the metaverse. Web 3.0 defines who “owns” and controls the internet, whereas the metaverse is more about how we use and experience the internet. So, we could say that Web 3.0 and its features provide the foundation for a potential metaverse.

You can find out more about the metaverse here.

The future of the internet is fast approaching, and sometimes it isn’t easy to keep up with all the developments. To give you a helping hand, the N26 blog is packed with posts that explain important topics from the world of (crypto-)finance—all in a quick and comprehensible way. Stay up to date with the latest topics, like how you pay tax on crypto assets, what a token is and what the different types of NFTs are.