Web3, in the context of Ethereum, refers to decentralized applications that run on the blockchain. These are applications that allow anyone to participate without monetizing their personal data. Tokens and cryptocurrencies drive Web3's business models and economy, supporting new business opportunities related to, for example, the monetization of non-fungible tokens (NFTs) in new metaverse applications. Although it is difficult to provide a rigid definition of what Web3 is, some basic principles guide its creation.
So, if a Web3 service is based on the same decentralization theory as bitcoin, how will regulators approach it? If you want to believe in its defenders, web3 is freedom, democracy and property, an idealistic version of the web created for users. Most of the time, in web3 applications, identities will be linked to the wallet address of the user interacting with the application. Web3 provides decentralized protocols and a technology stack that can be used to build parts of a metaverse and the new communities and economies it will enable. Although Web3's killer functions aren't isolated and don't fit into ordered categories, for simplicity, we've tried to separate them to make them easier to understand.
In web3, developers don't typically create and deploy applications that run on a single server or that store their data in a single database (usually hosted and managed by a single cloud provider). Web 2.0 requires content creators to trust platforms not to change the rules, but censorship resistance is a native feature of a Web3 platform. Instead, web3 applications run on blockchains, decentralized networks of many point-to-point nodes (servers), or a combination of the two that form a cryptoeconomic protocol. Another problem posed by web3 is that DAO source codes are publicly available, making them susceptible to cyber attacks if hackers can exploit weaknesses in the code.
Elon Musk believes that Web3 seems more like a buzzword, and Jack Dorsey is skeptical that Web3 can make a more equitable website, not dominated by large corporations. Many Web3 companies are quick to fill these gaps, but building a reliable, high-quality infrastructure takes time. However, we can take a look at the principles that drive the development of web3 to understand what web3 could look like.