Web 3

Jeffery Ho

Web 3.0 is a decentralised internet not owned and administered by significant corporations and is based on an open blockchain network. The third generation of the internet is currently being developed through technologies like artificial intelligence (AI), big data, and machine learning. In this case, websites and apps operated within the system will be able to process information in a thoughtful, human-like manner without any administrations from humans or a centralised system.

Chain 1: Comparison to Modern Web 2.0

Web 3.0 is still vague and could take 5–10 years to develop. Tim Berners-Lee, the creator of the World Wide Web, initially referred to Web 3.0 as the Semantic Web. It aimed to create a more independent, intelligent, and open internet. He defined the semantic web system as one with no central authority and control node and hence ‘no single point of failure.’

The definition of Web 3.0 can be enlarged to mean that data would be connected in a decentralised manner. This would significantly improve over Web 2.0, where data is primarily held in centralised repositories and thus vulnerable to manipulation. Furthermore, users and machines will be able to interact with data. But for this to happen, programs need to understand information conceptually and contextually. With this in mind, the two cornerstones of Web 3.0 are the semantic web and artificial intelligence (AI) technologies.

There is broad agreement among experts that, to achieve proper decentralisation, blockchain-powered applications will be essential to its success. At the same time, AI and machine learning tools will help automate and expand it as necessary to become a semantic web. As information in Web 3.0 can be stored through multiple databases and locations simultaneously, it contrasts with internet giants such as Google and Meta since their massive databases act as a centralised system.

Chain 2: Web 3.0 in Cryptocurrencies and Decentralized Finance

The protocols of Web 3.0 are highly dependent on cryptocurrencies since it also offers “monetary incentives” to any users who govern, contribute or improve any projects that are related to decentralised systems. This is similar to the Incentive Mechanism in Bitcoin; If a Bitcoin miner can successfully add a block to the blockchain, they receive 6.25 bitcoins in reward.

Decentralised finance is a Web 3.0 feature gaining traction. Their primary goal is for financial transactions to be carried out on the blockchain without the assistance of banks or the government. Many large venture capital firms invest heavily in Web 3.0, and it isn't easy to imagine that their involvement won't lead to some centralised power.

Back to the connection with monetary incentives, Web 3.0 tokens are digital assets connected to the vision of the semantic web, which is to create a decentralised internet system. The protocols here can provide various services, such as hosting, storage, computation, and many more! These online services, however, would be leaning towards the decentralising zone, contradicting the ideologies of a Cloud Database in Google.

The Livepeer protocol is based on Ethereum, giving streaming applications and video infrastructure suppliers a marketplace. Similarly, the Helium blockchain uses other blockchains and tokens to entice individuals and small companies to provide and validate wireless coverage and send device data across the network. The protocol offers a variety of technical and non-technical alternatives for people to make a living. Eliminating unnecessary and frequently wasteful intermediates is a common feature of decentralisation.

Chain 3: NFTs and Voting Shares

Nonfungible tokens (NFTs), digital currencies, and other blockchain components will be crucial components of Web 3.0. In a decentralised system, NFTs’ blockchain characteristics can easily integrate with Web 3.0 since it allows users to provide proof of ownership with their data, digital artwork, or even their assets in a particular game. However, that isn’t the main point when corporations try to break into the Web 3.0 space.

For instance, Reddit is developing a system that uses cryptocurrency tokens to let users effectively manage portions of the online communities in which they engage. According to the idea, users would use "community points," which they would acquire by posting on a particular subreddit. The number of users that upvote or downvote a specific post determines how many points the user receives.

These points can be utilised as voting shares, giving users who have contributed significantly more influence over decisions that have a more significant impact on the community. These points can't just be taken away because they are kept on the blockchain and follow you, giving their owners more control. This is one use of a Web 3.0 concept called Decentralized Autonomous Organizations (DAOs), which employs tokens to share ownership and decision-making power more fairly.

Chain 4: Venture-Based Money Laundering

CertiK is a security-focused ranking platform that analyses and monitors blockchain protocols and projects related to decentralised finance. According to the forum, there were already criminals that started to use Web 3.0 beta platforms to launder their assets from crime and use it to avoid anti-money laundering regulations. According to the CertiK security report, criminals use these decentralised schemes “to transform their illegal funds into seemingly-legitimate Web 3.0 startups and reap high returns.”

Venture-Based Money Laundering (VBML) in Web 3.0 is where criminals manipulate “venture seed funding ecosystems” and use them to convert their illegal activity and assets into legitimate businesses with legal revenues by using seed investments. Seed investments are a security offering in which a buyer invests money in a startup in return for an equity or convertible interest.

Criminals use this scheme to launder their illegal funds and assets on Web 3.0 projects from startups and obtain “clean money” from it. Throughout the project's lifespan, the "clean money" may be extracted several times, including during further fundraising rounds, token or NFT sales, salary payments, costs, dividends, and when the criminals sell their project ownership.

A third-party security auditor can considerably improve the integrity of Web 3.0 initiatives and security in decentralised networks by performing due diligence examinations and investigations. Seasoned investigators from various security organisations monitoring blockchain protocol will detect fraud on the existing blockchains. For any users online, the best action is to form an enquiry for the Web 3.0 initiatives they interact with. These security organisations can "guarantee the integrity of their blockchain endeavours."

Chain 5: Advantages and Disadvantages of Web 3.0

When listing the advantages of a system that would change the world and the life of specific stakeholders, there’ll undoubtedly be countless of them, especially for us, the users and consumers. First, social media and tech giants in our current Web 2.0 network can manage and exploit user data, such as selling those to third parties or advertisers for revenue. However, in Web 3.0, since it offers a blockchain-powered environment, users will have full ownership of their data and the data they use, including all the digital assets they create (It sounds similar to NFT, doesn’t it!) In addition, Web 3.0 will no longer be governed by a single organisation or entity. Decentralised apps won't be censored, nor will access to them be limited.

Web 3.0 also can link businesses and customers directly. With a central authority, they will partake in the profits from electronic transactions. But in a decentralised system, when it comes to business, consumers can move away from centralised institutions and towards trustless and decentralised networks. Although there will still be a need for sufficient laws and regulations to ensure fairness, there won’t be any single constraint or risk for consumers regarding businesses and selling goods. Users can also trace their data and see the platform's source code. The parties and stakeholders involved will constantly be aware of the worth and business they are engaged in. Consumers wouldn’t need an intermediary to get access to that information.

However, there are drawbacks to Web 3.0, which are risks, and cyber crimes might increase in the first decade when Web 3.0 officially replaces 2.0. Several technologies, including blockchain, AI, and machine learning, power Web3. Therefore certain elements, such as 3D visuals and semantic data, are unavoidable. Hence, users will require a device with higher-than-average specs, which not everyone can afford. However, as Web3-based websites and applications gain popularity, established firms will feel pressure to modernise. Companies must improve their digital products to keep the market share they have already achieved. Last but not least, the remarkable example mentioned above, venture-Based Money Laundering, will be a common cybercrime that security firms must commit entirely to prevent.

Conclusion

To decide whether we will utilise Web 3.0 for good or whether it will end up controlling us even more than Web 2.0, whether we are blockchain developers or regular people. Everyone must promote the wise application of technical innovation, regardless of how these technologies advance. A genuine effort for greater openness, more decentralisation, better social and political systems, and increased privacy could usher in a new golden age, albeit that may vary from person to person and from society to civilisation. Alternatively, we could succumb to Web 3.0, which is fixated on the metaverse and get-rich-quick schemes while allowing powerful institutions to monitor every aspect of our lives. Ultimately, it is up to us to determine how Web 3.0 evolves.