Without the Jargon: What is Web3?

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Without the Jargon: What is Web3?

Without the jargon” is a content series by Accredify that aims to explain complex, difficult, and challenging concepts in Web3, DLT, Blockchain, Verifiable Data (the works…), in a way that is easy to understand, and quick to digest. Basically, our version of ELI5! If there is something you’re curious about, and would like us to cover in “Without the jargon”, please let us know in the comments or email us at contact@accredify.io!

“Web3” is the new buzzword ringing in our ears – from news articles, social posts, to daily conversations with people, “Web3” seems to be the only thing that people are talking about today. A quick search of “Web3” on Google Trends illustrates this mounting interest, where we see a chart, representing search interest, climbing upwards over the past year.

A search of “Web3” on Google Trends shows increasing “Web3” searches per day over the past year, indicating mounting interest in the concept.

Even tech giants have started exploring “Web3”, such as Facebook renaming itself to Meta to signify its new focus on the next digital frontier, called the Metaverse – which, incidentally, is a Web3 concept. Or take Binance, as another example, who recently raised $500 million to fund Web3 start-ups. So, what exactly is “Web3”, and what does it mean for you?

Here’s everything you need to know – in simple, jargon-free language.

Let’s begin by understanding what the numbers mean. Web3 refers to the third iteration of the internet, therefore “3”. This means before Web3, there was Web1 and Web2 – but what are the differences between these iterations?

Key issues with Web2 that Web3 hopes to address

The implication of users giving Web2 service providers, such as social platforms and search engines, permission to record and store their personal data is that personal data privacy and security was now compromised.

  1. If a Web2 service provider, or any entity that collects personal data, was hacked by a malicious actor, then all this sensitive information would be made available to dishonest actors. Recently, Pharmacy retailer, Dis-Chem, was hit by a data breach which affected 3.6 million customers.
  2. Individuals would also not know, or be able to control, whether a Web2 service provider/data collector is truly managing their data properly. For example, Facebook was punished with a $5 billion USD fine in 2019 for violating its users’ data privacy.

*Quick Explainer: why do Web2 service providers want to collect personal data?

By collecting your personal data (e.g. your age, gender, location, what you’re searching for online, what websites you’ve clicked into, what purchases you’ve made), Web2 service providers can create highly targeted advertising and marketing campaigns.

This would allow Web2 service providers to profit off an advertising-driven revenue model, where they could monetise and sell user data to businesses, so that these businesses can conduct tailored advertising campaigns targeted at specific users.

Ever searched for an electric toothbrush, only to be fed a bunch of ads from electric toothbrush brands after on social media? That’s the advertising-driven revenue model in action.

The implications of users not owning their content and data:

  1. Users may not necessarily benefit from the monetization of their content
    • E.g. a social platform may earn advertising revenue off a video you’ve uploaded without giving you a cut
  2. Users may lose all their data if the platform shuts down, removes their access, or was compromised by malicious actors
    • E.g. if you’re a YouTuber, and YouTube shuts down, all of your uploaded videos on YouTube, and their associated views, comments, and statistics, will also cease to exist
  3. Users are not able to port their data across platforms
    • E.g. if you’re a YouTuber, and YouTube shuts down, you are not able to bring across your content, followers, viewership, reputation, and the community you’ve built on YouTube to a different platform like Twitch. You will have to start from scratch.
    • Here’s a more relatable example: did you have to create different accounts for Facebook, Twitter, Instagram, and TikTok? Even if you used Facebook to log into all these different platforms, your new accounts still started with nearly no information about you. You had had to re-populate various fields all over again.

These issues created a need for a new iteration of the internet – one where:

  1. Web services are permissionless
    i.e. you can use a service without needing the permission of anybody. In Web2, you can’t get the permission to use a service unless you give the service provider access to your personal data.
  2. Users, such as yourself, are in charge of their own data and content

Here are the main principles of Web3:

  • Everyone owns their data and digital assets. (including their content!)
    This is what the Web3 community means by “decentralised ownership”, where ownership no longer belongs to a single entity, such as Web2 service providers.
  • All Web3 services are accessible to everyone by default.
    Regardless of who you are, you cannot be denied of access to any Web3 service. This is what the Web3 community means by “permissionless”, where you do not need anyone’s permission to use a particular service.
  • Web3 services are paid for with their own currency.
    Users and service providers can perform transactions directly with each other without relying on payment intermediaries (such as banks or payment processors).

    This is because Web3 services are built on specific networks, like a blockchain network, and these networks have their own currencies – or coins. To use a particular Web3 service, one must pay using the coin of the network the service is built on. Such currencies, or coins, are also known as “cryptocurrencies“. With Web3, you have full ownership of your own digital assets, including cryptocurrencies, so your finances are not managed by any financial institution. And lastly, Web3 transactions, including the purchase or trade of cryptocurrencies, are built in a way that allows individuals to conduct their own transactions without the need for an entity to manage the process. Hence, no intermediary is required to facilitate Web3 exchanges at any point at all.

    Having ownership over your own currency and the ability to trade directly between parties, without needing any third-party interference, gives rise to what the Web3 community calls “native payments”. This is where direct payments are made using the currencies of the network a particular Web3 service is built on, without having to go through intermediaries.

  •  Web3 is run by its participants.
    Participants can interact with each other without needing to trust that a third party will discharge their duties properly.

    For example, in Web2 services, participants must trust that the third party mediating a transaction will not manipulate the exchange by influencing the communications between the two parties, such as changing or hiding information communicated by one party to another.

    In Web3, all transactions between parties are controlled by programmed digital contracts (i.e. smart contracts), which does not allow the interference of any third party, or any form of “cheating”. Hence, participants using a Web3 service no longer needs to trust that a third party will carry out their duties properly. This is what the Web3 community means by “trustless”, where participants no longer need to trust an overseeing party for a platform/service to function, or to trust that their transactions are authentic.

How does Web3 actually solve the issues with Web2?

The issue with Web2 How Web3 addresses the issue
Individuals are required to grant access to their personal information for permission to use Web2 services.

Web3 services are “permissionless”, where participants are free to use any Web3 service without needing to seek permission. As such, with Web3, individuals no longer need to sacrifice personal data privacy and security in exchange for permission to use web services.

If a service provider/data collector was hacked by a malicious actor, then all this sensitive information would be made available to dishonest actors. Decentralised ownership” of data means that individuals are in control of their own data. They no longer need to rely on the information security standards or policies of third-party repositories to protect their data, nor worry about whether the platform owner is a good steward of their personal information.
Individuals also needs to trust that Web2 service providers/data collectors are truly managing their data judiciously, or facilitating their exchanges honestly.

Web3 services are “trustless”, where participants do not need to trust that their transactions are carried out in good faith by third parties, as such transactions are made directly between parties and governed by digitally programmed contracts. Such direct exchanges between Web3 participants are facilitated by the use of “native payments”.

Users may not necessarily benefit from the monetization of their content

Since individuals are put in charge of their data, and the transactions they engage in on Web 3, individuals can monetise their content freely without the interference of third parties.

Users may lose all their data and content if the Web2 service/provider shuts down, removes their account, or was compromised by malicious actors

If a platform ceases to exist, an individual’s Web3 data will still continue to exist as it is owned by the individual. The are huge implications to this: for example, items you have earned and progress you have made in Web3 games will belong to you and can never be erased or deleted.

Users are not able to port their data across Web2 services and platforms

Since an individual’s data continues to exist with them, they are able to bring their full data to other platforms without needing to “start from scratch”. This is also known as a Verifiable Digital Identity, where your identity is condensed into verifiable, tamper-proof data points, and becomes portable across various Web3 platforms. Verifiable Digital Identities are an advanced Web3 concept that is necessary to navigate future metaverses (digital universes built on Web3 technology).

Learn more about navigating metaverses from Accredify’s CEO and Co-founder, Zheng Wei, here!

Verifiable Digital Identities also have the potential to replace passports entirely! Can you imagine? Learn more from our Product Manager, Prasheen, here!

Today, there already exists some applications of Web3 technology. Some examples would be:

  1. Axie Infinity, a game that allows players to collect and mint Non-Fungible Tokens in the form of digital pets
  2. Accredify’s instantly verifiable, tamper-proof digital documents, which is already being used by institutions in the Healthcare, Education, Aviation, Corporate Services, and Defence sectors!

With that being said, Web3 is still very much in its infancy today. However, we can expect to see an increasing application of Web3 technology being applied to various aspects of our lives in the coming years!

Now that you know a little more about Web3, what do you think? Are you as excited for the Web3 ecosystem as us?

What Can We Do For You Today?

Whether you are looking to transform your business, have questions about our solution, or curious to explore new use cases with verifiable information, we are always happy to chat!