Blockchain Technology: Prospects and Challenges

Web 3.0: A vision for the future

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Web3

Mains level : Web and Blockchain technology

The concept of Web3, also called Web 3.0, used to describe a potential next phase of the internet, created quite a buzz in 2021.

What is Web3?

  • The model, a decentralized internet to be run on blockchain technology, would be different from the versions in use, Web 1.0 and Web 2.0.
  • In web3, users will have ownership stakes in platforms and applications unlike now where tech giants control the platforms.

Previous versions of Web

To understand web3, we should start with Web 1.0 and Web 2.0.

[1] Web 1

  • Web 1.0 is the world wide web or the internet that was invented in 1989. It became popular from 1993.
  • The internet in the Web 1.0 days was mostly static web pages where users would go to a website and then read and interact with the static information.
  • Even though there were e-commerce websites in the initial days it was still a closed environment and the users themselves could not create any content or post reviews on the internet.
  • Web 1.0 lasted until 1999.

[2] Web 2

  • Web 2.0 started in some form in the late 1990s itself though 2004 was when most of its features were fully available. It is still the age of Web 2.0 now.
  • The differentiating characteristic of Web 2.0 compared to Web 1.0 is that users can create content.
  • They can interact and contribute in the form of comments, registering likes, sharing and uploading their photos or videos and perform other such activities.
  • Primarily, a social media kind of interaction is the differentiating trait of Web 2.0.

What are some of the concerns?

  • In Web 2.0, most of the data in the internet and the internet traffic are owned or handled by very few behemoth companies ex. Google.
  • This has created issues related to data privacy, data security and abuse of such data.
  • There is a sense of disappointment that the original purpose of the internet has been distorted.
  • It is in this context that the buzz around Web3 is significant.

Dawn of Web3

  • Gavin Wood, founder of Ethereum, a block chain technology company, used the term Web3 first in 2014 and in the past few years many others have added to the idea of Web3.
  • In 2021, owing to the popularity of crypto-currency, more discussions happened on Web3.

How will Web3 address the problems of data monopoly?

Web3 will deliver decentralized and fair internet where users control their own data.

  • Currently if a seller has to make a business to the buyer, both the buyer and seller need to be registered on a “shop” or “platform” like Amazon or Ebay or any such e-commerce portal.
  • What this “platform” currently does is that it authenticates that the buyer and seller are genuine parties for the transaction.
  • Web3 would try to remove the role of the “platform”.
  • For the buyer to be authenticated, the usual proofs aided by block chain technology will be used. The same goes for the seller.

How is blockchain technology used here?

  • With block chain, the time and place of the transaction are recorded permanently.
  • Thus, Web3 enables peer to peer (seller to buyer) transaction by eliminating the role of the intermediary. This concept can be extended to other transactions also.
  • Consider a social media application where you want to share pictures with your followers.
  • It could be a broadcast operation from you aided by blockchain and you don’t need social media accounts for all the participants to be able to perform this.

Another key feature: Decentralized Autonomous Organization

  • The key concepts in Web3 seen so far are peer to peer transaction and block chain.
  • The spirit of Web3 is Decentralized Autonomous Organization (DAO).
  • DAO is all about the business rules and governing rules in any transaction are transparently available for anyone to see and software will be written conforming to these rules.
  • Crypto-currency and block chain are technologies that follow the DAO principle.
  • With DAO, there is no need for a central authority to authenticate or validate.

Will it take off?

  • We don’t know yet if Web3 will become the dominant mode of handling the internet but the questions it raises are relevant.
  • Web3 is in its very initial days and there is no consensus if it will take off like Web 1.0 or Web 2.0 did.
  • There is much skepticism from top tech brains in the industry and the academic community that Web3 does not solve the problems it purports to solve.

 

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