The term Web3 is often used as an abbreviation to talk about the new phase of the Internet. It describes leaving the era of centralized social networks and massive e-commerce platforms and arriving at a utopia of user-controlled data. Web3, in a colloquial sense, is simply an umbrella marketing term that means everything that is related to cryptocurrencies.
To provide clarity on this topic, Cointelegraph’s research team has released a new report detailing the nature of true Web3. These key insights are invaluable for investors to understand in order to separate the facts from the fundamental misconceptions.
The blockchain web and the decentralized web
Cointelegraph Research’s report “Web3: Marketing Hype or Tech Revolution?” makes a clear distinction between the “blockchain web,” which is the integration of blockchain technology into the web, and the trustless, permissionless, decentralized alternative of the Internet, known as the “decentralized web.”
Download this free report on Cointelegraph’s research terminal.
The web blockchain has fostered the growth of non-fungible token, decentralized autonomous organization (DAO) and GameFi ecosystems that veterans of the cryptoverse will know about. Ideally, these ecosystems lack a central authority, and value is derived from the creation of scarce digital assets. The report looks at how, using blockchain technology, these ecosystems can be extended into the real world and bring new efficiencies to traditional industries.
The decentralized web aims to break the oligopoly of content delivery websites in today’s world of Web2. This goal is achieved by building a new web around the principle of decentralization, permissionless (everyone can participate) and trustless (the code is so robust that it eliminates the need for third-party authorities).
Have we reached that point yet? Nope.
There is a long way to go in terms of applying the idealistic principles of decentralization to both the blockchain web and the decentralized web.
The blockchain web, being built on the current infrastructure of the Internet, requires hosting services to be able to communicate between users and applications. Unfortunately, 60% of Ethereum nodes are hosted on Amazon Web Services. This gives a centralized authority the power to shut down most of the blockchain network.. The report shows how even DAOs are running into the problem of a small group of whales consolidating voting power alongside low user engagement.
The decentralized web is unfortunately not much better, but there are reasons for optimism. Currently plagued by monopolies like Google, Amazon, Meta, Apple, Microsoft, and Tencent, there is very little decentralization when users go online. Nevertheless, alternatives using technologies like distributed hash tables are starting to make it possible to build decentralized versions of popular applications.
The Cointelegraph Research Team
Cointelegraph’s research department is made up of some of the best talent in the blockchain industry. Bringing together academic rigor and filtering through hard-earned, practical experience, the team’s researchers are committed to bringing you the most accurate and insightful content available on the market.
Dr. Demelza Hays is the Research Director at Cointelegraph. Hays has assembled a team of subject matter experts from the fields of finance, economics and technology to provide the market with the leading source of industry reports and insightful analysis. The team uses APIs from various sources to provide accurate and useful information and analysis.
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