The concept of Web3 is that the internet evolves into a completely new underlying infrastructure that is based on blockchain technology. The stated hope of Web3 is that it will provide more of a decentralized environment, using token-based economics to perform transactions.
Web 3.0 is highly decentralized, driven by machine learning and artificial intelligence, and leverages blockchain technology. Users retain control over their data and content, and they can sell or trade their data without losing ownership, risking privacy or relying on intermediaries. In this business model, users can log into a website without having their internet identity tracked.
Web 3 also provides each person with greater control of their data or data parcels. A data parcel can be divided or it can be access controlled. You can give access to a certain portion of your information and you can give that to only people or the company that you feel will meet the profile that you like to work with, and each time somebody accesses or uses that data, you are going to get paid yourself. You can basically dictate how that data is used, or how long, for what application, by whom and all that. That is in essence Web 3.0. It is about tokenization of the data and building the data economy.
Key to the innovation in Web 3.0 is the digitization of assets via tokenization. Tokenization converts assets and rights into a digital representation, or token, on a blockchain network. Cryptocurrency and fungible tokens are forms of digital currency that can easily be exchanged across networks, driving a new business model that democratizes finance and commerce. Non fungible tokens (NFTs) are units of data that represent unique assets such as avatars, digital art, or trading cards, that can be owned by users and monetized for their own gain.
The claim is that decentralization will make the internet more democratic and take away many advantages from Big Tech. Other promises of an internet run on blockchain technology include improved data security, scalability and privacy for users.
But will these promises become reality? Opinions vary greatly. The question often asked is, why is all of that necessary, and does it make sense? Blockchain has great value in applications like crypto and data sharing, but is it the right technology on which to base the entire internet? Time will tell whether we see Web3 and the Metaverse converge or whether the two will diverge over issues of technology.