The term Web3 is popping up everywhere. Millions of tech enthusiasts swear that it’s the first step to a more democratic internet. One that is more rewarding to its users. But what exactly is Web3 and how is it different from the internet we are using today?

Web3 for Dummies is a short guide that explains how Web3 works, its current use cases, and how it’s different from Web2. It also delves into all sorts of career and investment opportunities that are currently available. Let’s start from the very beginning.

What is Web3?

Web3 is an acronym that describes a user-owned internet. More specifically, it is the enhancement of the World Wide Web with blockchain technology and a tokenized economy. This shift makes each internet user a partial owner of the web, instead of merely a byproduct.

Web2 vs Web3 – How will the new internet work?

Web2 is the internet we have known for the last ±20 years. In it, corporations control the flow of information, as well as the incentives to users.

Google, Youtube, Facebook, and other media channels, operate based on user-generated content. For example, a Youtuber makes a popular video, and millions of people head over to Youtube to watch it.

However, being highly-centralized entities, they add subjective limitations and leverage your personal data. Continuing on the same example, Youtube may delete the video if it does not abide by their terms and conditions. They also keep most revenue generated by potential ads on the video and only give a small percentage back to the creator (if any).

Essentially, in Web2, corporations own the channels, and users participate. Therefore, there’s an uneven power and reward structure that favors corporations.

In Web3, middlemen are completely eliminated. Instead, a more democratic system is put in place. One that incentivizes the participants, while giving them more freedom on how their data is used. The Ethereum foundation lists a few basic comparisons to better understand this:

Source: Ethereum.org

Centralized vs Decentralized consensus

Since Web3 removes centralization, the more democratic approach is known as decentralized consensus. In simple words, this means that all users who participate in a platform are part-decision makers as well.

Similar to the way Bitcoin transactions are verified by multiple independent nodes, so the decisions, rewards, and limitations of Web3 platforms are voted for by their users.

Web3 examples & use cases

  • NFTs – NFTs, or non-fungible tokens, are pieces of digital property that are verifiably scarce. An NFT could be an image, a virtual skin in a game, a plot of digital land, or your healthcare record. They can also act as digital receipts for physical items (e.g. proof of ownership for a plot of land).
  • Fan tokens – Since Web3 allows you to own a part of the internet, why not do the same for your favorite artist? Fan tokens are NFTs with member rights. These member rights can be anything from discounted tickets, backstage access, a share in royalties, or eligibility to vote on important decisions. The biggest fans become part-owners.
  • DAOs – Decentralized Autonomous Organizations are user-owned communities with shared leadership and encoded rules of conduct. Members collaborate and are rewarded based on input that is recognized by fellow members. There are many subcategories, depending on their goal of the DAO (e.g. financing DAOs, collector DAOs, exclusive social clubs, etc.).
  • Cryptocurrencies – Mostly in the form of tokens, they enable users to transact online in a private, cheaper, and borderless manner. Nowadays, crypto tokens are mainly built as a reward mechanism for dapp participants, and their value depends on supply vs demand dynamics. Hence, higher adoption of a dapp, usually leads to a growth in token price.
  • Play-2-Earn games – One of the biggest trends for 2022, blockchain-based games, promises to reward gamers from their time spent playing, as well as help them make their hobby a full-time job. Axie Infinity proved that the concept is viable, and introduced what we now call GameFi.
  • Wallet-based credentials – Instead of going through complex KYC procedures, decentralized products enable users to sign in using their personal Ethereum wallet. This concept offers increased privacy and more inclusion.

Web3 investing and speculation

Naturally, as an emerging industry directly related to the world of crypto, Web3 offers many investment opportunities. From buying virtual land and in-game NFTs in multiple Metaverses, to speculation on your favorite artist’s token, the space has it all.

But with such a broad spectrum of possibilities comes confusion. How can you best filter useful information from shady promotions? To expose yourself to the right opportunities, consider doing the following:

Track what crypto funds are currently investing in

Web3 job board

At the moment, job opportunities in the Web3 space are ample, and talent is hard to find. If you are interested in this new exciting industry and wish to be a part of it, make sure you check the following websites.

Web3 jobs

Crypto jobs

Summarizing Web3 for dummies

By now, you should have a basic idea about Web3 and its possibilities. Remember, Web2 is owned by large corporations, while Web3 is owned by its users. It is fully decentralized, and thus more democratic. It is also more private, thanks to wallet-based credentials.

Of course, both versions of the web are likely to co-exist for a while, and it will take time for Web3 to be the default choice. However, the exponential growth of crypto markets and the relentless internet censorship we see today might accelerate the shift. Hence, it might be a good idea to start exploring both career and investment opportunities in the space.

And that’s it! Remember to check out some of our other blog posts as well, to learn more about the current applications of Web3, and stay informed.