The Next Internet Revolution - Top Web3 Use Cases You Should Know
Crypto, NFTs, DeFi, GameFi, DAOs, and Web3 have been among the top ten Internet buzzwords in the past eighteen months. There has been so much discourse on Web 3.0 and what it would mean for a decentralized, transparent, and user-centric Internet. As users become more uncomfortable with how things are done now and the safety of their data, it becomes increasingly clear that the solution is Web3, a new Internet designed to revert ownership from large corporate entities to users.
If you don’t know much about Web3, this article is for you. Keep reading to understand what it is and how it can help solve the problems of Web 2.0.
What is Web3?
Web 3.0 (more commonly referred to as just “Web3”) is the next generation of the internet. It is built to be more innovative, autonomous, and open for users. This definition may be a bit confusing, but it all makes sense when you watch the progression of the web from the first generation to Web3. So, what was the first Internet, or Web 1.0?
Web 1, also known as the Static Web, was the first Internet ever to be built, and it lasted from 1990 to 2004. What characterized the first generation of the Internet was little to no interaction. It wasn’t built to facilitate interaction between content creators and consumers; Web 1 was just a means to share information in real-time. More than that, there were no search engine algorithms and dynamic HTML. This lack of interactivity made people dub Web 1 the read-only web. Something significant to note is that the first generation of the Internet was built for the builders and designed to be decentralized.
Around 2005, the second generation of the Internet, also known as Web 2.0, emerged. This second generation was spurred on by the entrant of social media platforms like Facebook and other key events like the Initial public offering for Google. These social platforms improved the Internet and allowed for more content to be shared and created by companies and for users to have a chance at being content creators themselves. As the number of user-generated content and user-to-user interactions soared, the second generation of the Internet would soon be known as the read-write or Interactive Web. Web 2.0 has lasted for 18 years. In that time, the interactivity that made it a vast improvement from Web 1.0 has only grown and modified in positive ways.
However, it became increasingly clear that Web 2 had been monopolized by big companies; the companies that make up FAANG come to mind — Facebook, now Meta, Amazon, Apple, Netflix, and Google. These companies controlled a disproportionate amount of user data which they used to make more money from ad revenue. But most importantly, users created content they couldn’t own and so couldn’t benefit from its monetization.
Web 3.0 is the solution to the problem of ownership. It takes the best of the two older generations — decentralization and interactivity — and includes the ownership factor. The amalgamation of these two concepts is the reason it is known as the Read-Write-Own Web. Instead of sharing content through third-party companies and giving them control over your content and the right to monetize it for personal gain, Web 3.0 allows you to create and distribute your content via its peer-to-peer structure. Web 3.0 is yet to come, although we are on the cusp of experiencing it, so there isn’t much to know about it. But here’s what we know:
- Web 3.0 has native payments using Cryptocurrencies
- Web 3.0 is decentralized
- Web 3.0 is trustless, meaning it doesn’t require trust in third parties.
- Web 3.0 is permissionless, meaning everyone has an equal footing and can participate.
How Does Web3 Work?
The most important thing to note about Web3and how it works is that it is decentralized, meaning no company would have control over or be able to monetize your data. Users will be able to build their community of followers and monetize their content without needing third-party apps like Spotify or Youtube to give them a platform. Under Web 3, interactivity would head to a new level with metaverse. It’ll be like a new world, except that it’s virtual, and users would require crypto tokens and NFTs to own, monetize, and access their assets. Transactions, organizations, and activities would be transparent and traceable as well. These speculations are just from the little we know about Web 3.0. There could be so much more to unpack when it finally replaces Web 2.
Web3 Utility: 5 Uses of Web3
Now that you know what Web3 is and how it works, what are its use cases?
- Blockchain Games (GameFi)
One of the uses of Web3is in the gaming industry in the form of Blockchain games. Blockchain games, also commonly referred to as GameFi, are games that are jointly owned by the players themselves. These games have a personalized economy that includes crypto tokens used for transactions and Non-fungible tokens used to represent in-game assets. These game assets can be transported beyond the limits of one game to another, making them interoperable across the blockchain. Blockchain gaming has many outstanding features, such as the ability to monetize game assets. This feature takes away the control of a centralized entity and allows users to make money off their assets. Games with this particular feature are known as play-to-earn games, and players can earn a living playing blockchain games. In some games, players can become content creators and be paid for it by building new game storylines.
Some of the popular blockchain games out there are:
- Axie Infinity
- Gods Unchained
The metaverse is simply a digital world that exists on computers. Although there is a lot of buzz around this topic, it is yet to be fully developed or accepted. Some people and companies have accepted it already. A good example is Meta, who is working hard to revolutionize social interactions in this virtual world. The metaverse is a critical use case for Web3because it opens the door for developing more immersive means of interaction. Web3is all about interactivity, and the metaverse is the key to maximum interactivity. No one knows how metaverse would really be when the idea has been adequately developed for use, but the few things we know indicate that it’ll be the new decentralized social interaction platform. Users can carry out all social and economic activities associated with living in a community.
3. Creator Economy
Developing a creator economy might be the most important of all the utility that Web3 brings us. Remember when we mentioned ownership as an essential factor that spurred the development of Web3? The creator economy hinges on ownership, data, and content ownership. The creator economy is a new spin on user-generated content. It allows content curators and creators to bypass third parties like YouTube, Spotify, music labels, art galleries, etc., and share their content directly to their target audience.
These content creators can build their communities without any platform which they can fully monetize using crypto and Non-fungible tokens. This is helpful in many ways. One, creators don’t have to pay these third-party applications any money to build a community on their platform. They can create one on the Web 3.0 decentralized platform. Secondly, they can use smart contracts to set up royalty payments and track sales. Under Web 3, the creator community will move from a commission-based earning model to one that grants creators the total earnings from their content.
4. Decentralized Autonomous Organization (DAO)
A decentralized Autonomous Organization is an organization with no central leadership that makes decisions together. In a DAO, the organization and its treasury belong to all its members, who in turn have an equal governance vote on what happens in the organization. DAOs are one of the biggest Web3 trends worldwide. They use smart contracts to vote and automate the governance decisions of the group. DAOs are still relatively new to the Web3scene, but they already provide a new blueprint for what corporate organizations might aspire to be — decentralized. Instead of business models with a CEO and board of directors, the company’s members and users can unite to govern the organization themselves through votes and autonomous smart contracts. The use cases for DAOs include but are not limited to Ventures, charities, and freelancer networks.
5. Decentralized Finance Protocols (DeFi)
The most significant trend in Web3 other than NFTs is DeFi. DeFi stands for decentralized finance and means just that — an economy that isn’t tethered to a central system. Traditional banking is centralized, and while the system is working, there are a lot of gray areas around transparency. Financial activities like borrowing and lending that require high levels of trust and transparency in a central system can now be done without one. DeFi uses smart contracts, which are code agreements that execute when the preset conditions are met, in the place of banks and other centralized financial organizations. The peer-to-peer lending feature allows lenders to give straight to borrowers and receive the entire interest rate from them as well. In addition to peer-to-peer lending, DeFi’s payment blockchains also handle financial transactions, which could overtake traditional payment systems. The advantages associated with DeFi are:
- Transparent transactions
- Low transaction fees
- Open source (allows everyone to participate without needing a bank account)
- Encryption-based Secure and private transactions
- Easy to use (doesn’t require processes like KYC)
Web 3.0 is in the works, and from all accounts, it will be a user-based Internet with never before seen levels of interactivity and ownership rights for users. Already, there are many ways we have started inching towards Web 3. Consider some of the use cases in Web3examined above — blockchain games, DeFi, DAOs, and a booming creative economy. They are already in use today, even if they are still undergoing development and becoming better. There is so much more to look forward to for the next generation of the Internet. You can start reading more about Web3 to prepare yourself for all the wonderfully exciting new things it’ll bring.