The concept behind Web3 was developed with the idea of “Semantic Web” coined by Sir Tim Berners Lee back in 2001. Web1 is “World Wide Web” and Web2 consists of user generated web. To be precise, it is a peer-to-peer network with no centralised servers.
Web3 consists of applications and data produced on a decentralised technology. On a broader spectrum it includes cryptocurrency, Decentralised Autonomous Organisations (DAO) and digital assets like NFTs. The concept of virtual reality and augmented reality got modified with emergence of metaverse with more interactive options. Web3 is internet owned and built through users generated tokens.
Web3 emerged as a growing domain with the creation of metaverse by Facebook back in October 2021. It is a fusion of virtual reality and blockchain technology to mainly focus on business technology. The main of Web3 is to make internet more open source for users to mitigate hacks and overdependence on centralised repositories. It is immutable and secure in nature as it keeps all the data transparent and locked through cryptographic hashes produced on each block in the domain. Web3 could help revitalise recent cryptocurrency market slump with the help of Ethereum (ETH) support. ETH has helped developers produce decentralised apps helping tech-based business grow and generate greater revenues. It could further mitigate dependence on cloud-based services like Google, Amazon with user generated services provided directly through peer-to-peer networks. Web3 is not limited to DAOs and NFTs as it will also facilitate trade items of value within the domain.
Web3 got tremendous boost in 2022 with the introduction of NFTs and gaming industry in the system. Users are now creating NFT gaming avatars and trading on Web3 creating a $10 B industry within the first quarter of 2022. Developers are preselling gaming avatars in the domain to fund development of games and projects. Web3 could become a major monetization hub for items of value in future.
Though at nascent stage, Web3 could revolutionise the internet in future. As major servers are controlled by big tech companies, control over user data remains scarce. Open-source domain with tighter data security with help of different nodes in the blockchain could provide greater user data security. The ownership over the NFT/data will always remain with the user without any third-party infringements.
The biggest drawback to Web3 is ETH itself. ETH is the oldest blockchain with the comparatively slow processing speed and high development cost. This could prove major hindrance in developing countries like India with crippled economy and INR hitting all-time lows each week. ETH also produces the highest amount of carbon emission across all blockchains. GOI still remain cautious over digital assets and introduction of Web3 could take significant amount of time in future. Research and study are required on a larger scale to understand the pros and cons of Web3 in the country. Investing huge resources in tight economy situation could backfire and prove fatal on the longer run for growing economies. It remains to be seen whether Web3 is limited to first world countries or countries like India join the bandwagon.
This is only for informational purposes. Nothing contained herein is, purports to be, or is intended as legal advice and you should seek legal advice before you act on any information or view expressed herein. Endeavoured to accurately reflect the subject matter of this alert, without any representation or warranty, express or implied, in any manner whatsoever in connection with the contents of this. This isn’t an attempt to solicit business in any manner.
Sources: Forbes,CBS,Vox,Avixa