To understand what Web3 is, we first have to understand the previous versions of the Internet.
What is Web 1.0?
The first phase of the Internet and can be characterized by the way users initially interacted with the web. Most users, during the first iteration of the web, were passive consumers of content. In other words, Web 1.0 was about reading and not writing. It was static instead of dynamic. This changed with Web 2.0.
What is Web 2.0?
The next major phase of the Internet was all about interactivity and users.
In this phase, users created most of the content on platforms such as YouTube, Facebook, or Twitter. This Internet was more social and collaborative, but that usually came at a price. The downside of this more participatory Internet was that by creating content, users were also providing personal information and data to the companies that controlled these platforms.
What is Web 3?
Web 3 is the next step of the Internet. It is currently still being built, so there is no single, established definition yet of what Web 3 is or will be.
In general, however, Web 3 refers to an Internet that is made possible by decentralized networks, such as Bitcoin and Ethereum. The key innovation of these networks is the creation of platforms that no single entity controls, yet everyone can still trust. That’s because every user and operator of these networks must follow the same set of hard-coded rules, known as consensus protocols.
The secondary innovation is that these networks allow value or money to be transferred between accounts. These two things—decentralization and Internet money—are the keys to understanding Web 3.