Web3 is redefining relationships, power structures, and identity on the internet. Its decentralized infrastructure is giving users back control, freeing them from privacy violations and restrictions imposed by big tech platforms.
And let's face it - megacorps have so much of our data that they can practically read our minds. So the shift from web2 to web3's user-first model is a welcome change.
Web3 is an umbrella term used to describe the shift to decentralized apps which puts more power around identity and ownership into the hands of individuals and not major companies online. It’s a combination of decentralized ledger technology, machine learning, artificial intelligence, and big data so websites and applications can work in a distributed way. The technology encourages a more personalized web experience than what previous web generations have offered where individuals have more control.
Web3's core focus is on decentralization – i.e., taking away the reins of data privacy from big corporations. Where blockchain technology is concerned, web3 refers to the decentralization of apps using smart contracts on blockchains like Ethereum. You can think of a smart contract as a set of rules and instructions. It can set the rules for things like buying and selling an NFT or distributing money to different charities. Unlike web2, these decentralized apps don’t rely on monetizing personal information and data. In web3, individuals own their identity, not corporations.
How web3 compares to web2
Around 2012, the foundations of web3 started emerging as some believed there had to be a better way forward that gave more power back to individuals. There are some key differences between web2 and web3.
First off, web2 allows companies to own an individual's identity and content while web3 provides the tools for individuals to take control. In web2, if a creator builds a large audience on a social media platform like Instagram or even a membership platform like Patreon, those platforms own and control the creators’ relationships with their fans. If the creator wants to take advantage of the services offered by a new platform, they cannot easily move the fans who support them. But in web3, the creator could instantly port their audience over to any new platform that comes online.
With web2, certain payments may not be allowed by different service providers and can take days to settle. Web3, on the other hand, has the ability to transfer value from one person to another almost instantly, without relying on personal information for payment transactions.
Web2 is vulnerable to server malfunction and shutdowns, jeopardizing gigs and workers’ income. Web3 remedies it by using a shared ledger of information and a decentralized network of numerous computers called validators on a blockchain, which all maintain the same data. As a result, web3 has the power to decentralize data and information.
So, to sum it up, where web2 had given the reins of data privacy and control in the hands of corporation giants, web3 starts to take it back and make the internet more user-centric.
The 4 core tenets of web3
Web3 works on the principle of decentralization – taking away the reins from governing bodies and giving them to the users. There are 4 core tenets of web3.
- Open: The openness of web3 refers to the fact that it is accessible to all its users and is run transparently on public domains using open-source software. It takes governing bodies, like the government and big corporations, out of the equation.
- Portability: Web3 primitives don’t live on centralized servers – data is easily portable. Thus, the communities, networks, audiences, fanbases, etc., are also portable. Therefore web3 doesn’t limit users to a walled garden, and they can easily transport their audience and data anywhere.
- Trustless: Web2 often requires the involvement of a third party, like government or service providers, during transactions. Web3 renders it unnecessary and hence is called trustless. With web3, users can send Ethereum and other cryptocurrencies directly to another person.
- Permissionless: Web3 builds further on the trustless factor by not requiring the transaction participants to seek permission from a third party.
Decentralization of relationships, identity owned by individuals, not large companies
Decentralization is the most revolutionary advantage of web3 technology. Because of how web2 works, user data and relationships are stored in private servers which turns every site or app into a walled garden. In contrast, web3 ensures that you own your own data, and thus your individual identity. With web3, you can decide which information to share with third parties, and which to keep under wraps.
Payments are natively built-in
Regarding transactions, web3 takes the lead from the previous web versions by offering cheaper, faster, and built-in exchange of value through cryptocurrencies. Because of decentralization, these transactions don’t involve third parties. Individuals are in charge of their digital wallets
Practical examples of web3 in action
Even if you have not explicitly heard about web3, the chances are that you have heard about some popular applications.
NFTs
An NFT is a digital item you can own – it can be represented by music, animations, pictures, videos, etc. Creators can mint and sell their NFTs using web3 blockchains.
The most popular current application of digital ownership of NFTs is in the form of collectibles or as an analog of the traditional art market. NFTs can establish programmable rules for secondary sales and royalties, something you can’t do with physical art. NFTs are becoming popular because they provide artists with verifiable ownership and royalties on their art– something that has not been possible with web2.
We see NFTs moving beyond being pure collectibles into identity and access keys to a creator’s world that can provide the basis for long-term relationships between creators and their fans. Learn more →
Cryptocurrency
Cryptocurrencies are digital currencies used for transactions on decentralized networks. It doesn’t exist in physical form but has a fair market value as a digital asset. Bitcoin and Ethereum are famous examples of decentralized cryptocurrencies.
Cryptocurrency unlocks the ability for those without banking infrastructure, or living under a repressive government, to have security over their funds and transact with a global audience. New blockchains and Layer 2 networks like Polygon and Solana are innovating at a rapid clip to reduce the fees required to transact on a decentralized blockchain.
The “Metaverse”
Some people define the Metaverse as virtual reality on steroids – an internet you can go to and explore in virtual space. We’re still pretty far from the technology required to power those kinds of experiences.
For Tellie, the more interesting immediate application of the Metaverse is as an internet+shared state – the ability for anyone to move information, digital objects, identities, and currency between different platforms. Development on the blockchain Ethereum has pioneered many of these use cases..
At Tellie we focus on digital identity, status, and digital goods that people can reused in several contexts and services.
Web3’s current limitations
Web3’s core ideas are still in its early days - different protocols and tools are under development by multiple teams and are continuously being improved. So, as you'd expect, it currently has some limitations.
1. Complicated/new user behavior patterns
Web3 uses state-of-the-art technologies but the user interface and design systems still need improvement in many areas. Users are required to learn new patterns to do basic things like fund their wallets, buy NFTs, and maintain their personal security. There's a steeper learning curve when it comes to using this technology.
2. Scalability
Although a decentralized infrastructure has benefits for privacy and security, it can have big limitations on the number of transactions it can register per second, and a network’s overall carbon footprint.. Ethereum, for example, can only process 15 transactions per second, making each transaction expensive to process. Thankfully, as the technology improves, these concerns are being addressed with novel strategies for securing a blockchain, like proof of stake.
Tellie aims to address the scalability issues by minting Collections on Polygon - an eco-friendly blockchain that's more than 99.9% carbon-efficient than Ethereum - while maintaining interoperability with the Ethereum ecosystem.
3. Exhausting
The primary utility that web3 early adopters can take advantage of off-chain is token-gated community forums like Discord or Telegram servers. These are always on chat rooms that can get noisy and overwhelming to keep up with if you want to participate in web3. To tackle this challenge, Tellie is providing creators with a creative canvas to provide real value and utility for their communities, like exclusive content and merch. Tellie believes in building tools for creators to connect with their fans on their own terms. More information on real time and async community tools coming soon!
How web3 fundamentally changes the internet as we know it
Decentralized ownership of identity and relationships
Web3's focus on decentralization encourages individual identity and data ownership. Instead of there being a centralized network, users can form peer-to-peer networks which can be brought from place to place.
Every person truly owns their content
Unlike previous generations which consolidated power in the data centers of large companies, the third generation of the web focuses on ownership of a protocol which is collectively owned by its users. NFTs are an early example of a web3 primitive where an individual is the sole owner of their content.
Reduced reliance on 3rd-party middlemen
Thanks to blockchain technology, web3 distributes data through peer-to-peer networks. The point to note here is that there still exists a web of third parties; only now is the transition open and trustless on community-owned protocols. It thus reduces the reliance on intermediaries in transactions and network provisions using a centralized model.
Conclusion
Web3 networks and ideas open the door to a novel re-thinking of the way apps on the web are designed and operated. It lays the foundation for more direct ownership of your identity and your data, and unlocks a new kind of “metaverse” where you can bring your relationships and information into different contexts.