What is Web3? The Future of the Internet Explained

Image courtesy: Brave

The Web3 Stack

  • Protocol layer: The deepest layer of the Web3 stack, the protocol layer is formed of the blockchain platform and protocols that are used to power all Web3 services, products, and applications. This layer is primarily comprised of layer-1 and layer-2 blockchains, including Ethereum, Solana, Arbitrum, and BNB Chain. But also includes a growing range of interoperability tools and protocols, including cross-chain bridges like Multicoin and pluggable cross-chain communication systems like the InterBlockchain Communication Protocol (IBC) and Polkadot.
  • Infrastructure layer: The infrastructure layer provides the building blocks that applications can use to carry out specific functions. These include communication protocols, decentralized file storage solutions, DAO-based governance protocols, on-chain identity tools, and a wide array of novel financial primitives — such as stablecoins (e.g. USD Coin and TerraUSD), DeFi derivatives (e.g. Synthetix and dYdX), crowd-owned insurance products (e.g. Nexus Mutual and InsurAce), and on-chain identity (e.g. ENS and Unstoppable Domains).
  • Use case layer/application layer: This is the array of Web3 services that leverage blockchain-based infrastructure to carry out their operations. This includes gaming applications like Axie Infinity and Star Atlas; DeFi tools like Uniswap, Mirror Protocol, and Compound; NFT marketplaces like OpenSea and LooksRare; and Metaverse platforms like The Sandbox and Decentraland. These leverage the modules, smart contracts, and standards set out in the infrastructure layer to provide some or all of their functionality, and are analogous to the web apps of Web2.
  • Access point layer: These are the tools that provide access to the Web3 ecosystem, and generally take the form of Web3 wallets, browsers, and extensions. Some of the most prominent examples of Web3 access points include MetaMask (the most popular Web3 wallet), Brave (a privacy-oriented Web3 browser), and MoonPay (a popular fiat-to-crypto on-ramp).

What Does Web3 Offer?

  • Permissionless access: By leveraging blockchain-based protocols and related technologies, Web3 is set to be a far more permissionless place to access. With few to no identification requirements and a lack of centralized services, censorship is set to become a thing of the past, while government firewalls and internet restrictions are likely to be rendered far less effective at controlling access to information.
  • True ownership: Web3 is set to power a huge variety of new business models centered around the concept of “true ownership” — allowing users to own their data, assets, content, and more through the creation and transfer of digital tokens including utility tokens and NFTs. Unlike Web2, where user data, community creations, and content are generally owned by the platform it is uploaded to, Web3 will provide a fairer playing field that better rewards participants and balances incentives between stakeholders.
  • Improved privacy: Blockchains are pseudonymous by design since users do not generally need to link their real-world identity to their payment methods in order to use blockchain-powered services. This attribute also extends to most decentralized applications (DApps) which do not collect or require any personal information about their users — a stark contrast to the data mining standard set by most Web2 services.
  • Decentralized storage: Thanks to the advent of decentralized storage solutions like Filecoin, the InterPlanetary File System (IPFS), and Swarm, Web3 will provide users and businesses with access to truly permissionless, immutable, and resilient decentralized file storage — eventually at a fraction of the cost of existing cloud-based storage services.
  • 100% uptime: Unlike traditional web services, which are hosted on centralized servers that are susceptible to government censorship, denial of service attacks, and other outages, Web3 services are likely to benefit from 100% uptime. This is thanks to the unique resilience of decentralized systems like Ethereum and Solana, which distribute files and applications across a network of potentially thousands of nodes. This makes it extraordinarily expensive to attack the network while making most attempts futile due to the sheer redundancy.

Gaming as the First Frontier

What to Expect

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