What Is Web 3.0 and Why Is Crypto a Key Component?
When it comes to cryptocurrency and the future of the internet, which Steve are you?
Steve Ballmer or Steve Jobs?
In 2007, the former, then Microsoft CEO, was highly skeptical of the new iPhone with its touch screen technology.
“[The iPhone] is the most expensive phone in the world and it doesn’t appeal to business customers because it doesn’t have a keyboard which makes it not a very good e-mail machine…”
Even though Ballmer is hugely successful and was an innovative tech leader, he missed the mark on Job’s smartphone which, as we know, took over the world.
I Don’t Understand It, So I Will Dismiss It
Many notable people today are skeptical of cryptocurrencies. JP Morgan Jamie Dimon called Bitcoin a “fraud.” To non-believers, crypto is the domain of kids living in their parent’s basement who trade it to “get rich quick” while pumping out jokey memes about going to the moon.
To these skeptics, crypto or decentralized currency not dependent on the whims of a centralized bank and run on mathematically complex blockchain technology, is a fad not to be taken seriously.
What if we told you crypto adoption is a key component of Web 3.0?
What is Web 3.0?
The first iteration of the internet was called Web 0.0, or “the pre-web.” This version of the internet relied on centralized servers and client/server architecture to operate which made it slow due to bottlenecks in communication between users.
There were also problems with security, as information being sent over this early web could easily be stolen by hackers who broke into these central computers storing all this data.
These are just some examples of what prevented people from using the Internet for business purposes early on. As the Web marched on, online shopping became prevalent when bandwidth increased, allowing videos to stream more quickly during browsing sessions.
Web 2.0 & E-Commerce
With Web 2.0, people could buy goods online with ease by removing geographical barriers as well as not having to use cash or credit cards (which could be stolen). These early internet pioneers also gave birth to popular e-commerce platforms like PayPal.
Web 3.0 & The New Era
Currently, web-based applications and services are increasingly hosted within the cloud. They can be accessed from any location via a web browser. Web users expect to be able to perform many different types of tasks using these applications on their choice of devices (smartphones or tablets) both at home and away.
Furthermore, as Internet access becomes faster and more ubiquitous, we will start expecting all our networked interactions with other people – whether it’s emailing friends or chatting online with colleagues – to happen in real time over an always available connection such as high speed broadband (e.g. fiber optics).
Another key trend that will drive Web 3.0 in this next era is the increasing popularity of mobile devices like smartphones and tablets. With their growing processing power, connectivity options (Bluetooth and Near Field Communication or NFC) and intuitive user interfaces, these devices are well suited for interacting with rich media content on the web.
In addition, the use of location-based services (GPS) on mobile devices can provide contextual information that can be used to enhance the user experience.
What to Expect with Web 3.0
We can expect to see more and more websites taking advantage of these trends as we move into Web-based applications enabled by the cloud platform and enhanced by mobile devices.
For example, we can expect:
- Meta or Facebook to use rich media content like video streaming videos and games to provide an immersive experience for their users.
- GPS on mobile devices can provide contextual information that can be used to enhance the user experience, like finding restaurants near you that have been rated highly.
How Does Crypto Fit Into Web 3.0?
By now you probably know that decentralized cryptocurrencies are part of Web 3.0 shifting toward a peer-to-peer and open source internet.
For example, if I wanted to purchase something using Bitcoin, I could send coins from my wallet on an exchange where they can be sold for fiat or government-issued currency. The exchange then sends the fiat currency to the vendor, minus their commission.
This is all done without a third party being involved, such as PayPal or Visa. This is just one reason why cryptocurrencies are becoming more popular and will continue to do so in Web-based applications enabled by the cloud platform and enhanced by mobile devices.
But Wait …
If there’s no bank, who holds my money? And how do I know it’s not going to disappear into cyberspace never to be seen again?
This is where crypto comes in. Cryptocurrencies like Bitcoin are digital or “virtual” currencies that use cryptography to secure their transactions and control the creation of new units. This means that there is no need for a third party, like a bank, to mediate these transactions. Users can trade directly with each other by exchanging crypto. This also eliminates the risk of losing your money as it is stored on the blockchain.
The blockchain underlies all cryptocurrencies like Bitcoin and uses complex cryptography and group authentication to create a public ledger of transactions that cannot be tampered with. This means that when something is written into the blockchain, everyone using that particular cryptocurrency can see what was entered.
In addition to being used as currency, crypto can also be used as “smart contracts.”
What Are Smart Contracts?
Smart contracts are self-executing contracts with specific instructions written into lines of code.
This allows people to create markets, store registries of debts or promises, move funds according to instructions given long in the past (like a will or a futures contract) and many other things that have not been invented yet, all without a middle man like you would find with traditional contracts.
When someone sends money over the blockchain, it is received immediately by whomever has their address. The sender no longer needs to rely on third parties like banks for this process which makes transactions much faster – just minutes instead of days!
This system allows people who don’t know each other to trust one another. For example, if I pay someone else in Bitcoin, they will receive their payment even if they do not know me personally. Transactions are also secure since there is no need for an intermediary like a third-party financial institution getting their cut of the transaction.
Fake Money Fad?
Although volatile in its infancy, crypto is getting institutional love. In 2020, Bitcoin saw gains as much as 300% and the most ubiquitous cryptocurrency outperformed the gains of gold and the Dow Jones stock market.
If you continue to dismiss crypto and how intertwined it is with Web 3.0 and the movement toward a decentralized “democratic” internet, are you like Early Aughts Steve Ballmer, dismissing revolutionary technology that was Apple’s iPhone?
Leave us know and leave your comments below!