Web 3.0 emerged from the world of cryptocurrencies, but it is much more extensive and complex than that. Do you know how the next stage of the internet will work and what we can expect from it?

Despite the evolution represented by Web2, its high connectivity and interactivity began to take a high toll on users. By giving their information in exchange for greater convenience in using the network, users become susceptible to the leaking or sale of their personal data.

Furthermore, content creators depend on large platforms to deliver their products/services, while having limited control over the volume of traffic generated and, as a consequence, their income.

In general, society has been demanding more protection and autonomy in relation to data controlled by Big Technologies. Thus, the search for a technology that allows navigation without dependence on intermediaries has been increasing . The initial desire to keep data decentralized , which was present in Web Version 1, has been re-activated.

Added to this growing dissatisfaction, the emergence of the cryptocurrency market has boosted the creation of Web3 . However, it is important to note that it is not simply the evolution of Web2. It is an innovative technology, with another structure, operating parameters and stakeholders. And it will completely transform the way business is done around the world . Stay with us to find out more!

History of the Web until the appearance of Web3

To understand the magnitude of the revolution that Web3 has brought, it is necessary to understand what Web1 and the current Web2 were:

  • Web1 (1991 to 2004): basically composed of static pages, structured in hyperlinks. Its function was focused on reading content, with little interaction between users.
  • Web2 (2004 – current): centralized traffic from mega platforms such as Google, Facebook and other social networks that allow high interaction between users. Large corporations capture and retain information to offer a personalized browsing experience and monetize it to sell ads.

Web3 and cryptocurrencies

It is key to understand how this new Web is related to cryptocurrencies . And it is worth mentioning that, although they have allowed the creation of Web3, the two concepts are not confused.

Cryptocurrencies are encrypted digital currencies, without physical representation or government regulation, that are based on the blockchain – technology launched in 2008 with Bitcoin .

Web3 , in short, is a virtual environment, an ecosystem whose operating gears depend on blockchain technology and in which all operations are carried out in cryptocurrencies. 

Next, we will go deeper into that concept.

Despite the intimate relationship between the two, there is no forecast that the current “crypto winter”, with a significant drop in the value of cryptocurrencies, will delay the development of the new internet. Companies around the world, including large corporations like Google, have invested massively in the progress of Web3. The so-called “crypto economy” is still responsible for moving 1.2% of the world’s GDP. In monetary values, that is worth about $1.1 trillion.

What is Web3?

The term Web3 was created in 2014 by Gavin Wood, one of the co-founders of the Ethereum cryptocurrency. This is the 3rd generation of the Internet, which not only represents an evolution of the previous version, but also a completely innovative business model .In the Web2 reality, imagining a completely different technology is not easy. For ease of understanding, we list below some key features of Web3:

Blockchain-based registry structure

The “blockchain” model is used for the unalterable record of transactions and traceability of assets on the network.

Decentralized information

The data is stored in a kind of public record book on the network, without manipulation or control by any agent.

Peer-to-peer (P2P) technology

Peer-to-peer technology allows the exchange of resources on equal terms, directly between several users, eliminating the need for intermediaries and dependence on large platforms.

Greater security

New technology makes fraud , invasions and the production of “fake news” impossible. The entire flow of information has a unique and traceable record.

More equal internet

Democratic access to information, greater transparency and autonomy for the creation of content and carrying out transactions.

How does Web3 work?

The operation of the Web is possible due to the existence of modern technologies beyond those already mentioned: blockchain and artificial intelligence. Get to know some of the main ones:

  • Digital wallets: are responsible for storing users’ unique data and keys that prove ownership of digital assets. Through their digital wallet, the user can interact with smart contracts and tokens.
  • Tokens: are the digital representation of assets on Web3, whether in monetary value or possession of rights. Tokens can also represent physical assets existing in the real world or not.
  • Smart Contracts: are computer programs that operate on blockchain networks to determine the behavior of tokens. They allow the creation of complex software for token transactions, NFT projects , etc.

What are the trends that Web3 brings to the payments and banking market?

Although Web3 is developing rapidly, the forecast is that the Web2 transition will still take a few years to complete. Until then, we are going to observe with increasing frequency some of the trends related to the 3rd generation of the Internet. Learn about the main ones in terms of impact for the payment methods market that we can already see today:

Replacing fiduciaries with DeFi

DeFi are computer programs that function as protocols to replace the actions of current fiduciaries. Through these protocols, there will be less need for intermediaries in asset transactions, which will be carried out directly between participants.

Market tokenization

Assets such as debentures or real estate, for example, become represented by tokens that can be divided into several parts. The possibility of transacting fractions of your assets, without intermediaries, reduces the need to resort to the capital market or the banking market to obtain resources.

Trading NFTs or non-fungible tokens

NFT transactions already allow artists and content creators, for example, to directly reach their audience, without depending on platforms to deliver or intermediaries to make sales. Big brands, like Nike, are already testing the model.

Immersive experiences in the metaverse

The metaverse, in addition to representing the physical world in the digital environment, also brings the possibility of overriding its limitations and adding all digital tools, offering true immersion in the Internet.

The trend is for this totally immersive experience to revolutionize the way we interact, create, buy and carry out financial operations.

New organization format in DAOs

The acronym DAO means “Decentralized Autonomous Organization” in English. In practice, they are organizations that are governed by smart contracts, with previously established rules, registered in the blockchain and, for this reason, transparent and immutable.

This new organizational format, whether for the formation of a company in a new venture or to dedicate itself to a specific purpose/project, allows for less hierarchy. There is no need for a manager, for example, if all the business rules, even those not related to treasury decisions, are already provided for in the smart contract.

It is an organization controlled by its members, without the influence of a central administration. Any modification to the code has to be done through a vote with all DAO participants, in a democratic manner.

And the future with Web3, what will it be like?

Just as in the 1950s it was difficult to imagine what the arrival of the Internet would be and what impacts it would bring to the lives of people in all parts of the planet, today it is still a challenge to understand in detail what the future will be like from the Web3.

In the end, not all the business models that will be created from the use of Web3 are known today . The possibilities that can be explored are many.

To glimpse some of them, the 11FS Web3 report brings interesting examples. Among them, we highlight some of the possible uses of the new internet:

Any user may grant or take loans directly from another user, without the intermediation of financial institutions . For this, they will use tokens and smart contracts to record all the transaction rules.

Unique and innovative products, which only exist in the digital world, can be traded and accessed exclusively by the owner of the respective NFT. Access to a work of art or entry into an event from a very exclusive and selected audience in the metaverse, for example.

Invention of new sources of income from the creation and commercialization of goods and services that only exist in the metaverse. Development of new production chains, demands for new skills and training activities.

Launching innovative ventures based on free association in DAOs, with members from all over the world who do not even know each other in the real world.

Immersive interaction within the reality of the metaverse, whether for work or personal relationships. People may consider, for example, the possibility of acquiring a virtual property in a certain location in the metaverse that allows them to live in a community with common interests.