Recently, we have been hearing the term “Web3 (Web3.0)” more and more often, and it is expected that it will gain even more attention in the future.
In this article, we will start with the fundamental question “What is Web3 (Web3.0)?”, and explain the differences between Web1.0 and Web2.0, as well as the reasons why Web3 (Web3.0) is attracting attention and its benefits. We will introduce you in detail. Please check the trends in the Internet world.
What exactly is Web3 (Web3.0)?
As those who have a strong interest in the digital market and are sensitive to trends are well aware, the term “Web3 (Web3.0)” is attracting attention.
“Web3 (Web3.0)” refers to the “decentralized Internet era” or “decentralized Internet era” that utilizes blockchain technology. In the digital market, it is attracting attention as the “next generation Internet.”
In the current Internet world, the advancement of global giants such as Google and Apple has had a huge impact on the world, captivating many users and providing convenience in various situations such as business and private spaces. and have established its value. While using the services of such giant companies increases convenience, there are concerns that personal information is collected, increasing the risk of information leakage. In recent years, there has been a growing focus on privacy from the perspective of personal information protection and security, and it has become a hot topic worldwide.
It is said that Web3 (Web3.0) will lead to solutions to these problems by making innovative use of blockchain technology. Web3 (Web3.0) puts users in control of their own data and assets, and allows users to interact directly with each other. This is expected to protect privacy and improve security.
From here, we will also introduce the definitions of Web1.0 and Web2.0, which are the previous generations of Web3 (Web3.0).
Web1.0 (age of homepage)
To briefly explain Web 1.0, it refers to a time when the users who wanted to send information and the users who wanted to view it were fixedly limited.
With the spread of the WWW (World Wide Web), which is now commonplace, it has become possible for individuals to create their own or company’s website and disseminate a variety of information to the outside world.
At that time, mainly text sites using “HTML” were mainstream, and there was very little content specializing in images and videos, which are commonplace in recent years. This was a time when communication acquisition was being implemented. It can be said that there was almost no two-way interaction between users who wanted to send information and users who wanted to view it. The era of homepages corresponds to the period from the 1990s to around 2005.
Web2.0 (SNS/cloud era)
Web 2.0 came after Web 1.0. The period from around 2005 to the present corresponds to the SNS/Cloud era. The advent of the Web 2.0 era has had a major impact and has accelerated changes in the Internet market.
A feature of Web 2.0 is that it has become possible to obtain two-way communication between users who wish to transmit information and users who wish to view information, which was not possible with Web 1.0. The development of the Internet environment has made it possible for anyone to freely and actively use the Internet, which has also had a major impact.
Another major feature of Web 2.0 is the spread of SNS such as Facebook, Instagram, Twitter, and YouTube.
With a smartphone or tablet in hand and an internet connection, anyone can easily become a user of information without being restricted by time or location.
In addition, the methods of acquiring communication have become more diverse, and it is now possible to use not only text but also various creatives such as images, videos, and music, and it is also easy to share images and video content, making it easier to actively communicate. It’s now possible.
The spread of SNS has become an indispensable “thing” for the excitement of today’s Internet market, and it has developed to the point where it has gained enormous support from many users worldwide.
Web 2.0 specializes in convenience, such as being able to easily obtain the information you want with the click of a button and easily connect with many users.
However, on the other hand, one characteristic of these services is that users’ behavioral histories and personal information are retained in a concentrated manner by the companies that provide these convenient services. Since users’ privacy information is concentrated and held in one place, there are many risks in the event of a cyber attack. In addition, the issue of personal information being monopolized by the five major companies known as GAFAM (Google, Amazon, Facebook, Apple, and Microsoft), which have the world’s top share and influence, has been pointed out and is attracting attention. is.
Background of Web3 (Web3.0) attracting attention
The world of the Internet continues to change, from Web 1.0, which focuses on one-sided communication, to Web 2.0, which is interactive, and Web 3 (Web 3.0), which takes privacy protection into consideration. There are two reasons why Web3 (Web3.0) is attracting attention:
Let’s take a look at the background of each.
Growing interest in privacy management
In today’s Internet world, if personal information is not handled properly, there is a risk that it will be leaked to large corporations or malicious third parties. However, in a world where web3 (Web3.0) has become widespread, users will be able to manage their own data and assets.
In the world of the Internet, account information used to log in to a particular site may be presented as login information for another site, or may be stolen by malicious users. In fact, there are many cases of problems such as things that you don’t remember being added to your credit card usage history, or large amounts of money being withdrawn from your account. Additionally, personally identifiable information may be distributed on the Internet, leading to suspicious phone calls, stalking, and other damage.
These problems will not occur in a Web3 (Web3.0) world. Web3 (Web3.0) can be used without creating an account, so there is no need to expose personal information on the Internet. In other words, even people who are concerned about privacy management can use Web3 (Web3.0) with confidence.
Popularization of NFTs (non-fungible tokens) and virtual currencies
In Web3 (Web3.0), transactions are conducted in virtual currencies and NFTs (non-fungible tokens) using blockchain technology. Ownership of these items can be clearly registered online, reducing the risk of unauthorized manipulation or theft.
Virtual currency is a digital currency that can be distributed regardless of national borders or governments, and Bitcoin and Ethereum are famous examples. NFT is a technology that adds uniqueness and rarity to digital content such as images and music. Recently, artworks and videos of athletes have been sold for high prices and have become a hot topic.
These virtual currencies and NFTs enable new transaction methods that were not possible on the traditional internet. For example, virtual currencies have lower remittance fees, and NFTs make it easier to copyright works and share profits. Web3 (Web3.0) is attracting attention as the Internet that supports these new transaction methods.
How Web3 (Web3.0) works
From here, we will explain the more specific mechanism of Web3 (Web3.0). Web3 (Web3.0) will make it possible to decentralize the power of some giant companies, which has become a problem with Web2.0.
Blockchain technology is the key to this.
Blockchain technology is steadily beginning to spread around the world, and Bitcoin and Ethereum have been attracting attention in recent years as pioneers in the spread of blockchain technology. This is a technology that is mainly used in the exchange of cryptocurrencies, and is a system that allows users to manage their personal information themselves.
Blockchain technology is a database technology that can properly record data about various transactions carried out over the Internet. “Blocks” are data units that are connected and managed like a chain, so it is called a blockchain. Blockchain technology allows data to be divided into multiple locations, making it possible for individuals to manage databases.
For this reason, it is believed that various risks such as the power retention of specific companies, leakage of personal information, and privacy issues, which are considered problematic in Web 2.0, can be reduced.
Blockchain technology used in cryptocurrencies has the characteristic that transaction information is encrypted. Additionally, encrypted transaction information can be shared among multiple users.
In Web 2.0, a lot of information is often kept concentrated within companies and on
servers
, making it extremely vulnerable to server attacks and hacking, and when such incidents occur, large amounts of information held by individuals can be lost. There is a risk of data leakage. Web3 (Web3.0), which has the characteristic of distributing information, does not have such concerns and ensures a high level of security.
Advantages of Web3 (Web3.0)
So far, we have touched on the concept of Web3 (Web3.0).
From here, I will briefly explain the specific benefits that can be obtained by implementing Web3 (Web3.0).
Users can manage their personal information individually
Currently, the number of businesses using the web is increasing year by year, and it has become commonplace to use websites and SNS in daily life.
When using various websites and SNS, many people may have experienced that advertisements with content that matches their interests are continuously displayed on the screen.
In addition, some people may feel uncomfortable and wonder if someone understands their hobbies and keeps displaying this information on their screens as advertisements, even though they have not shared this information with anyone.
This kind of thing is affected by systems that occur when companies collect personal information of users who access websites and SNS.
For example, Google, a large global company, can be said to have a monopoly over users’ personal information. Specifically, Google provides its own service called a search engine for free, but it collects personal information such as users’ search history and behavior history on websites. Services provided by large companies have influence and are used by users all over the world, so they collect a huge amount of personal information. The collected personal information will be used for various businesses, including web advertising.
Web3 (Web3.0) is characterized by the ability of each user to manage and retain personal data based on their own decisions. As a result, it will be possible to use web and SNS services without requesting advertisement distribution.
Expected to reduce the risk of information leakage
Web3 (Web3.0) uses blockchain technology to distribute and manage information in multiple locations instead of in one location. This reduces the likelihood that your information will be tampered with or stolen.
For example, on the current Internet, important personal information such as name, address, phone number, and credit card information is stored on servers or in the cloud, but with Web3 (Web3.0), users can manage it themselves. The current Internet is subject to hacking and cyberattacks, but Web3 (Web3.0) stores information in a distributed manner, greatly reducing the risk of information leaks.
Web3 (Web3.0) is expected to be an Internet that safely protects important information such as personal information and corporate information.
Service available anywhere
In Japan, anyone can use the Internet freely without any restrictions. However, even though this seems obvious, there are countries around the world where this is not the case.
There are examples of government censorship systems being adopted, and access to sites such as Google, Twitter, and YouTube, which are familiar in Japan, being prohibited.
However, with Web3 (Web3.0), the above restrictions can no longer be set. Since there are no conditions or authority over the blockchain, and there is no centralized server itself, anyone can access it freely and use the service on an equal basis.
Enables direct transactions with companies without intermediaries
Currently, if you want to develop your business on the web, you often have to go through various intermediaries, and there are some cases where you are charged a commission to the intermediary each time.
However, network connections in the Web3 (Web3.0) era have the characteristic that they do not require an intermediary server. This allows businesses and users to conduct direct transactions.
The elimination of the need for intermediaries is expected to have a major impact on the various existing businesses that currently exist, increasing the possibility that already established business models will collapse.
For example, in DeFi, a financial intermediary application that does not require a central administrator, all actual transaction records are recorded on the blockchain, and there is no need for domestic virtual currency exchanges, which currently have a centralized role, and there are no fees. Manage your financial assets without paying anything.
As these groundbreaking services, which were previously unimaginable, become commonplace and permeate, the various companies and services that previously played the role of intermediary will no longer be necessary, and the current business model will change significantly. That is to be expected.
Six technologies related to Web3 (Web3.0)
New technologies are also being created by utilizing Web3 (Web3.0). Technologies that are already attracting attention include:
Let’s take a closer look at each technology.
1. Metaverse
The Metaverse is a virtual space built on the Internet where you can act freely using an avatar. It is used for a variety of purposes, including online games and business activities.
For example, in online games, you can create a city on the Metaverse, and game users can walk around it using their avatars, as well as buy and sell land, buildings, items, etc. in the Metaverse. This expands the world view of the game and increases the enjoyment of the game.
In addition, in business activities, an increasing number of companies have set up conference rooms and chat rooms on the Metaverse, and are using avatars for meetings and chats. As long as you have the internet, you can participate in meetings and chats from anywhere, which is helping to popularize telework.
Furthermore, if you use the Metaverse for job interviews, it will be easier for people who live far away to apply for jobs. Due to the declining birthrate and aging population, it is becoming increasingly difficult to secure human resources, but by using the Metaverse, you can widen the door to employment. The use of the Metaverse will be essential to increasing opportunities to hire talented personnel.
In this way, the Metaverse is attracting attention as a virtual space that provides new experiences and communication on the Internet.
2.DeFi
DeFi (Decentralized Finance) is decentralized finance, and refers to a system that allows financial assets to be traded without a central management institution such as a bank or securities company. DeFi uses blockchain technology to allow users to manage their own transaction records. This allows transactions to be carried out without relying on a central authority.
For example, in DeFi, you are not affected by the business hours of a central management institution, so you can use it 24 hours a day, 365 days a year, depending on your convenience, and fees can be kept low. Because you can trade without being influenced by the government or financial institutions, you can avoid unnecessary costs and be free from political and economic instability. DeFi is likely to gain even more attention in the future as a revolutionary mechanism that allows trading of financial assets without a central management institution.
3.DAO
DAO (Decentralized Autonomous Organizations) is a decentralized autonomous organization that is managed and operated on a blockchain. In the absence of a top executive such as a manager, the people in the organization act on their own initiative.
To participate in the DAO, purchase the virtual currency used in the DAO. Just as you can get a say in a specific company by purchasing stock in a corporation, you can get a say in the DAO by purchasing the DAO’s virtual currency. Although there is no hierarchy among the members of the DAO, there are rules within the DAO, and rules are adopted and regulated by the members of the DAO.
DAO is attracting attention as an innovative organization that operates autonomously on the blockchain.
4.NFT
NFT (Non Fungible Token), also called non-fungible token, is digital data that cannot be copied or tampered with. For example, a one-of-a-kind digital art piece in the world, a limited number of pieces manufactured, and a piece with a serial number can be considered NFTs.
NFTs record not only the data of the work itself, but also past transaction data on the blockchain. This allows you to confirm the authenticity and ownership of the work. In addition, the value may increase because the number is limited or because it is owned by a famous person. In that case, the profits will be returned to the creator.
NFTs are attracting attention as digital data that cannot be copied or tampered with.
5.SocialToken
SocialToken is a token (digital currency) that can only be used in a specific community. By purchasing SocialToken, people belonging to the community will be able to engage in activities and interact within the community.
In Japan, professional sports teams are already using SocialToken. By purchasing SocialToken, supporters who support the team can participate in supporter-only events and support team activities through donations.
SocialToken is attracting attention as a token that increases bonds and contributions within the community.
6.Crypto asset
Crypto asset is a token (digital currency) that utilizes blockchain technology. Crypto assets are not fiat currency issued by a country’s central bank, but have property value that can be exchanged for fiat currency.
As transactions on the Internet increase, crypto assets that allow secure remittances are also attracting more attention. In addition, low transfer fees and short transaction times are some of the reasons why Crypto assets are attracting attention as being more convenient than traditional fiat currencies.
Crypto assets are attracting attention as innovative tokens that utilize blockchain technology.
What are the challenges of Web3 (Web3.0)?
Although Web3 (Web3.0) has some advantages, such as making it easier to protect personal information, there are also some issues. The following are the issues that need to be resolved in order to put Web3 (Web3.0) into practical use.
I will explain each issue.
Legal arrangements are necessary
Web3 (Web3.0) is an evolution of the Internet that utilizes new technology, but legal developments have not kept up with it, and it is necessary to create a legal system and tax system.
For example, if a payment is made using virtual currency, how will the receiving party calculate the income tax or corporate tax amount, and if the company operates without a business office, which country’s tax system is in place? Issues such as whether it is applicable or not are also expected.
Legal arrangements are also necessary to improve the safety and reliability of Web3 (Web3.0).
High IT literacy is required for use
Web3 (Web3.0) is an Internet that utilizes virtual currency and blockchain technology, and it is necessary to improve IT literacy. If you lack knowledge and skills, you may find it difficult to use Web3 (Web3.0). For example, it is necessary to understand basic knowledge and terminology about virtual currency and blockchain technology, and to manage your own wallet (virtual currency wallet).
Web3 (Web3.0) is a technology that overturns traditional financial concepts. It is assumed that some people feel uneasy about replacing their assets with currencies other than legal tender.
Improving IT literacy can be said to be necessary for the use and spread of Web 3.0.
Care must be taken when dealing with problems
Web3 (Web3.0) does not have an administrator. Therefore, if a problem occurs, you will have to deal with it yourself.
Traditionally, when sending money through a financial institution such as a bank, not only the sender but also the receiver registers personal information such as name and account number, and although there is a risk of disclosing personal information, in the event of an emergency, the financial We were able to hold the institution accountable. However, in Web3 (Web3.0), there is no administrator, so in case of an emergency, you are required to solve the problem yourself.
When sending money using virtual currency, if you enter the wrong address, you will not be able to get your money back. Additionally, if you lose your wallet (virtual currency wallet) password or private key, you will no longer be able to access your assets.
With Web3 (Web3.0), there is no administrator, so it is important to be careful to avoid problems.
Issues and countermeasures regarding gas fees (fees)
In Web3 (Web3.0), when conducting transactions on the blockchain, there is a cost called gas fee (fee). Gas costs vary depending on the speed and volume of transactions, but can be expensive.
High gas prices are a big burden for Web3.0 users. In particular, new entrants and small-value traders may find it difficult to trade easily, as gas fees can sometimes exceed the transaction amount.
There are several measures you can take to reduce your gas bill. Blockchain improvements and expansions, etc. Lower gas prices will encourage new entrants and small-value traders, and improve transaction speed and efficiency.
security challenges
Web3 (Web3.0) uses blockchain and cryptography to provide higher security than traditional services. However, security issues may exist with some protocols and smart contracts.
Security issues pose a major risk to Web3 (Web3.0) users. For example, hacking or unauthorized manipulation may result in the leakage or loss of assets and data.
As Web3 (Web3.0) becomes more widespread, it is thought that as vulnerabilities become more apparent, countermeasures will be easier to develop.
Web3 (Web3.0) service examples
Many services using Web3 (Web3.0) have already been created. Therefore, we will introduce examples of browsers, online markets, games, etc.
Brave
Brave is a browser that is also referred to as the next generation of Google Chrome.
Brave protects your privacy by
from your browsing and search history. In addition, since users can control the advertisements displayed themselves, their browsing is not interrupted by unnecessary advertisements.
Additionally, Brave also has a system that rewards users. When users allow advertisements to be displayed, they can receive compensation in virtual currency (BAT tokens). These rewards can be stored in your wallet within Brave or sent to other services.
OpenSea
OpenSea is an online marketplace where you can buy and sell NFT content. NFT content is content created on the blockchain, and is unique and rare in the world.
OpenSea allows you to trade a variety of NFT content, including artwork and game items. NFT content can be freely set by the creator or owner, and can be bought and sold in an auction format. It can also be used in conjunction with other services.
My Crypto Heroes
My Crypto Heroes is an NFT game created by a Japanese company. Characters and items in the game are made with NFT, so the characters and items are more original than traditional games, and are unique in that they can be bought and sold by players.
In My Crypto Heroes, you can also sell the items you earn through the game on online markets such as OpenSea and earn real money.
As mentioned above, Web3 (Web3.0) provides a variety of services such as browsers, online markets, and games. These services provide users with a high degree of security and freedom, while also creating new value and experiences. Web3 (Web3.0) services are expected to further diversify and develop in the future.
Future outlook for Web3 (Web3.0)
Regarding the future potential of Web3 (Web3.0), we can focus on the following two points.
Let’s look at each point.
Furthermore, the concept of Web4 (Web4.0) has already been born in the Internet world. Web4 (Web4.0) is an Internet world that inherits the user-driven concept of Web3 (Web3.0) that utilizes blockchain technology, and aims to create a symbiotic relationship between humans and machines by making full use of AI, big data, etc. is.
Popularization in the financial field
Web3 (Web3.0) services are compatible with the financial field, so DeFi (decentralized finance) is expected to expand in the future. It is thought that DEFI will not only be a generalization method, but also affects the significance of the statutory currency. Not only will the fundamental monetary value will change, but it may also be possible to avoid unstable economic conditions due to extreme inflation.
The conversion of the organization is progressing
Not only online services, but also real organizations are expected to be DAO (distributed autonomous tissue). There is no hierarchy in the advanced tissue, so a more airy tissue will be realized.
In addition, since the purchase of the currency used in the DAO gives the right to speak, it is assumed that it will be easier to develop new businesses. For example, Defi projects such as Uniswap and Compound (compound) are operated by DAO. These projects provide high convenience and profitability to users and have innovation throughout the industry.
Focus on the trends of the Web3 that creates a new business model
In this article, we will introduce the differences from Web1.0 and Web2.0, and why web3 (Web3.0) attracts attention and its merits from the part of “Web3 (Web3.0)?” I did.
The current trend, the web3 (web3.0), will continue to evolve steadily, update the latest information one after another, and will attract more attention around the world. Check the information about Web3 (Web3.0) frequently and respond to the flow of the new era.