In an industry full of buzzwords, ‘web3’ is currently among the most used. But also one of the most misunderstood, in large part because the most enthusiastic adopters of the term, and the underlying technologies, have been cryptocurrency evangelists. However, the more purist definition is of something far more idealistic than how we buy things and echoes those early hopes for the internet to be an equalising and democratising force in the world.
A brief history of the internet
The very name web3 implies that there was a web1 and web2. And although the internet has not been as consistent with self-naming schemes — there is no domain registrar for the concept of the internet — those phases are identifiable.
Web1 was, at the time, just the internet. Taking off in the late-90s and early-2000s, it was largely a read-only affair. Anyone with a connection and basic skills could code a site, often using just a text editor, for the world to see. The main difference between a hobbyist blog and a sprawling behemoth like the BBC News site was more the design budget, rather than underlying technology.
Web2 followed around the turn of the century. Dubbed Web 2.0, it was the participatory web. Instead of people creating content (mostly written) on their website, networks empowered people to publish and share easily on their platforms. Whether short updates like Twitter, or lengthy videos on YouTube, Web 2.0 brought internet publishing to the masses.
But it brought problems. Some claim Web 2.0 consolidated the internet with just a few corporate owners like Facebook and Google, moving the internet away from its idealistic beginnings.
The creation of web3
The first discussion of web3, or Web 3.0 as it was called, was by Gavin Wood in 2014. Wood, the co-founder of cryptocurrency Ethereum, noted that the internet was, in effect, merely acting as a façade for our old lives. We might have been banking or buying online, but the underlying transactions were still following old models, routed through the digital channels of traditional institutions.
Web3, therefore, is a radical alternative, not just grafting a new technology onto familiar concepts. Using blockchain, would transform the web from being user-to-service to being truly peer-to-peer. Unsurprisingly, the blockchain element, being closely linked to cryptocurrency, has meant crypto is strongly linked to web3, but the potential is much wider.
It might mean that we use crypto to pay our rocketing bills, it will also mean that our social media is collectively on a blockchain, rather than the servers of a giant, and we own our online lives through an NFT, rather than paying rent via personal data and advertising.
Like any new technology, plenty of terms can become shibboleths, identifying those in the know.
Blockchain is at the heart of web3. It is easiest understood as a decentralised, public, and unchangeable ledger. Open to audit by anyone, whether it’s transactions or tweets, the blockchain provides security because it is distributed, rather than centrally owned. Everything in web3 is, in some way, built on blockchain.
A decentralised autonomous organisation, or DAO, can be used to provide the governance of web3. It allows members to agree to rules and create organisations, and effectively it provides democracy to the blockchain.
Decentralised finance is a general term for a financial system based on blockchain. Because it uses blockchain, it is free from any central authority such as a national bank or treasury.
Decentralised apps, or DAPPS, are peer-to-peer applications built on the blockchain.
Non-fungible tokens, or NFTs, are perhaps one of the best-known elements of web3 and blockchain. It is a standard that certifies ownership of digital assets.
The hottest web3 startups
Like much blockchain innovation, web3 has its fair share of evangelists and sceptics. But whatever your view, there’s no denying that there are several innovative startups using web3 to make their mark.
Sweat Economy, sometimes known as ‘air-miles for walking’, combined the gamification of exercise with blockchain. Rewarding walking with tokens, it incentivises gentle exercise with the potential of financial reward. It’s also seen promising trials within the NHS, where participants ended the programme healthier and wealthier.
Footium brings gaming to web3. Their football-management game is based on blockchain, and uses it to its full advantage. Its transfer market is backed with NFTs, and users can even watch the best players rise in value and have lucrative post-retirement careers as managers!
A decentralised learning platform, Neol allows users to take ownership, literally, of their growth. By using blockchain, the community can own and direct the platform, while learners and creators can contribute to its, and, development. The platform promises on-demand, cohort-based learning, removing the dependence on the timetables and set curricula of traditional learning.
Follow this page to take a deeper look into some of the hottest startups making waves in the web3 world.