What is web3?

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28 Dec 2023

Web3, a new paradigm, conceptual model, and technology stack is being developed to enable a new way of working on the internet. Web3, built on blockchain technology, aims to provide decentralization, freedom, and transparency in the way the internet operates.

The key features of Web3 are:

1. Decentralization: Web3's resources are distributed, and there is no centralized management. All users contribute by sharing information and connections.

2. Cryptography: Web3's security system is based on cryptography, which enables secure and private transmission of data.

3. Smart Contracts: Web3's smart contracts are self-executing contracts written in programming languages that automatically execute when certain conditions are met.

The benefits of Web3 are:

1. Decentralization: Web3's decentralization provides lower risks and more control. Since everyone has their own computer systems, there is no centralized management.

2. Cryptography: Web3's cryptography-based security system ensures secure and private transmission of data.

3. Smart Contracts: Web3's smart contracts, written in programming languages, automatically execute when certain conditions are met, making it more efficient when needed.

The drawbacks of Web3 are:

1. Learning Curve: The learning curve for Web3 technology can be steep as users must learn specialized programming languages to create applications and smart contracts.

2. Regulation: Web3 technology may face regulatory issues as cryptocurrency exchanges and other web3 services may face regulatory issues. Further research is needed to address these issues.

Examples of web3 applications include:

1. Decentralized Finance (DeFi): DeFi applications use blockchain technology to provide financial services such as lending, borrowing, and trading cryptocurrencies. Cryptocurrency exchanges are also part of this category.

2. Non-Fungible Tokens (NFT): NFT applications use blockchain technology to create digital art pieces that have unique identities. Cryptocurrency exchanges also fall into this category.

3. Decentralized Social Media Platforms: Decentralized social media platforms use blockchain technology to provide social media services while also incorporating DeFi and NFT applications. Cryptocurrency exchanges also fall into this category.