WHAT IS WEB3?

Web3 is the catch-all term for the vision of an upgraded version of the internet aimed at giving power back to the users. It is truly the “next big thing” in the tech world and if implemented ideally, will change the way the internet works. Before we dive deep into Web3, let’s briefly understand Web1 and Web2.

 Web 1.0 was mainly static websites owned by companies with close to zero interaction between users - individuals seldom produced content - leading to it being known as the read-only web.

Web 2.0 was mainly read-write/social mediums, rather than a read-only one. Instead of offering users material, businesses started to offer platforms where users could exchange user-generated content and communicate with one another. Advertisement driven revenue model thrived on user data and a handful of companies made billions. 

Web 3.0 can be best described as “read-write-own”. Users will engage among themselves, consume and/or create content while keeping ownership of their personal data. Web 3 will present the users with faster personalized content with the help of enhanced algorithms including AI; and, stripping the wealth generated by the billion and trillion dollar companies and giving it back to the individual user.

MYTHS AND FACTS

Any new change brings forth uncertainties and raises numerous doubts to human minds. With a vision so enigmatic and path breaking, Web3 is no exception. There are innumerable myths surrounding it making it intimidating for newbies in the field.

In this article, we will quash the popular myths on Web3.

1) MYTH: WEB3 and METAVERSE are the same thing

TRUTH:

WEB3 and METAVERSE are related and often talked about together but they have different definitions altogether. The Metaverse is a small sector within the WEB3, one of the innumerable technological aspects that WEB3 provides. The metaverse is powered by an array of underlying technologies, some of which are vital components of Web3.

Web3 includes crypto wallets, decentralized exchanges, lending/borrowing platforms, NFT marketplaces, metaverse, DAOs and more. 

Metaverse is best described as advanced virtual reality connecting people all around the world together via the internet. Through the metaverse, people are able to work, play, shop, and socialize together all in the 3D world. 

2) MYTH: CRYPTO is the same as WEB3

TRUTH:

NO, Crypto and WEB3 are not the same things. In fact, crypto is rather a sub-category of Web3. Crypto or cryptocurrency is the popular liquidating mechanism for the Web3 infrastructure. Cryptos are often used to incentivize the development, operation, maintenance and security for Web3 infrastructure. To realise the vision of an egalitarian internet, Web3 required a decentralized currency system to facilitate transactions since conventional options like banks were unfit. This is where cryptocurrency came in - enabling transactions in Web3 via cryptos make sure that money can be sent from one wallet to another by using an open-source protocol rather than a financial institution.

3) MYTH: It’s too late now to join WEB3

TRUTH: 

It’s safe to say that Web3 is a technology for the future and it’s still a largely premature concept. A lot of work is still left to be done to create a sustainable Web3 ecosystem for its proper integration in our daily lives. Hence, it’s absurd to think that it’s too late to jump on the Web3 bandwagon. If anything, this is the perfect time to dive into Web3 and explore its various aspects. A lot of research and innovations are ongoing in the Web3 field and you have a golden opportunity to explore this unsaturated domain.

4) MYTH: BLOCKCHAINS of WEB3 are illegal and used only for illicit purposes

TRUTH:

To put it in simpler terms, there are some aspects of Web3 which often push the technological and regulatory boundaries and that’s not new to mankind. Blockchains are playing an integral role in the Web3 movement owing to their ability to guarantee the fidelity and security of a record of data and generating trust without the need for a third party. Transactions and data shared via blockchains are secure, efficient and enable heightened user privacy. While this is a welcome change, it also gives unprecedented power to corrupted organizations thereby raising the concern of being exploited for illicit activities. 

It’s true that in the initial phase(early 2010s), blockchain networks were exploited for illicit purposes - the most notable of these was the Silk Road case. However, it’s worth to note that the most used blockchains have now gone totally public. This implies that everybody can now actually track every single transaction which makes blockchain literally the worst option for executing illicit activities. With its transparent nature and growing maturity, blockchains are cutting out illegal activities while providing radical solutions to our financing world. Reports have proven that illegal activity through blockchains have been curbed to a lesser degree than that carried out through conventional finance systems. It can be safely concluded that with all its good sides, Blockchains have outweighed the concerns of illegal use.

5) MYTH: User privacy is a concern in a decentralized platform

TRUTH:

A decentralized platform with open ledgers doesn’t imply that your data can be accessed and tampered by anyone around the globe. There is some data which can be accessed by the public and there is some data which is confidential and held only by its owner - the user has the discretion of which data is public and which is private. The web3 app that you use will be clear about what is publicly accessible and what isn't. 

Let’s take an example to understand this better. When you’re using the blockchain to send cryptos, you’re using a private key and a public key to complete the process. When someone sends you cryptos via the Blockchain, they are actually sending them to a hashed version of what’s known as the “Public Key”. There is another key which is hidden from the general public, that is known as the “Private Key.” This Private Key is used to derive the Public Key. The complex algorithm makes it possible to generate Public Keys from Private Keys, but it is very difficult and expensive to “reverse” the algorithm to accomplish the opposite. This implies that a scammer can’t reverse engineer your Private Key from your Public Key, keeping your data and privacy intact. Only you know your own Private Key, and everyone else on the Blockchain knows your wallet address which is a Public Key. This enables you to carry out transactions while retaining full control of your privacy.

In conclusion, it can be said that most decentralized-apps of Web3 are truly community-governed and noncustodial. Users can thus experience actual and meaningful ownership of their data, with algorithmically secured intellectual property rights. Moreover, the underlying blockchain facilitates transparent communications while prioritising user privacy through different means of cryptographic encryption.

6) MYTH: MNCs will not adopt WEB3

TRUTH:

A technology as futuristic as Web3 can not be phased out and is sure to be integrated in our daily lives. Yes, it’ll take some time to create a sustainable ecosystem for Web3 but rest assured, MNCs and leading organisations are already working to integrate Web3 in their products and business models. It’s become clear to companies that the seamless experience and ownership opportunities provided by Web3 is unparalleled.

Automobile giants, Mercedes-Benz recently partnered with Web3 company Polygon to launch a data-sharing platform based on blockchain technology. Mainstream banking institutions and finance organisations are seeking to diversify their offerings through Web3 and dApp tech. A prominent example is BNP Paribas which is working with Metaco and Fireblocks to develop digital assets. Swedish fashion giant H&M Group is in the process of designing an immersive showroom space, with the support of Web3 agencies Dept and Journee. Several big consumer brands are bracing up to enter the Web3 market while forming alliances with prominent Web3 service providers. Indian tech giants Flipkart hit the news recently when they joined hands with Polygon to revamp their e-commerce business. Also, prominent companies like Starbucks, META, Reddit, etc are reportedly investing millions to implement Web3 tech in their products and business models.

 Even in sports, the clubs have set their targets to capitalise on the Web3 arena. Football giants- FC Barcelona, Manchester City, Juventus are already partnering with crypto platform Socios to sell digital fan tokens to their fans. Fan tokens, NFTs of iconic sports moments, club merch, etc are already making use of different aspects of Web3. 

Hence, the notion that MNCs or big institutions will not adopt Web3 is baseless. Web3 is here to stay and the companies, brands, institutions are welcoming the change.

7) MYTH: BLOCKCHAINS will entirely replace DATABASES

TRUTH:

Traditional databases are facing increased competition from Blockchains for multiple reasons. Firstly, the Blockchains remove the requirement of having a trusted third party as was the norm in traditional databases. While in databases, the data is centrally managed, owned and controlled by an administrator ; the data in blockchains can be handled in a completely decentralised manner. Also, the data integrity is reportedly more secured in a blockchain than a database. However even with all its flashy new features, Blockchains can’t entirely replace Databases. Here’s why -

1. Data Integrity and 51% Attack:

Any change in the blockchain needs to be agreed upon by majority of the network before it is implemented. While,it is a good thing for security reasons - theoretically, one can override the behaviour of the blockchain by controlling majority(51%) of its nodes. Hence, it isn’t impossible per se to tamper data in a blockchain.

1. CRUD Operations:

In a database, one can perform CRUD operations on the data i.e. data can be created, read, updated and deleted from the database.

In a blockchain, data is immutable - it can be only added or deleted, which can be an issue at times.

1. Technology still in development phase:

Unlike blockchain technology, which came into existence about seven years ago, relational databases have been an established means of organising and storing electronic data since the 1970s. Blockchain technology is still being refined and researched upon to smooth out its different features. This isn’t the case with databases which edge out blockchains on the basis of general understanding, reliability and simply because they have been tested on the field extensively.

1. Particular characteristics of the blockchain used:

The nodes running a blockchain determine its power consumption, time required to process transactions and the amount of trust required between respective nodes. Generally, a blockchain raises concern of higher power consumption and requires more time to process transactions than a higher end database. There’s still work going on to make them more power efficient and faster.

Blockchains still have a long way to go and it can be inferred that Databases will always be required for specific tasks. Blockchains will never quite entirely replace all the traditional databases.

8) MYTH: WEB3 is just another GET RICH QUICK scheme

TRUTH:

Web3 is not a giant Ponzi scheme or a "get rich quick" scheme for crypto bros, it is without doubt a significant development in the tech world. You can’t ignore Web3 if you’re in the field of tech. It can be argued that Web3 is a scam or the future or both. Yes, it is the future and the next big step for mankind in general. Yes, it has been used as a mystifying term and exploited by scammers at times. But that's the case for pretty much everything. Don’t blindly invest and/or trust people and don’t ignore Web3 either. Exercise your own discretion and start diving into the Web3 world - if not now you’ll probably need to in a few years anyway.

9) MYTH: WEB3 apps are UNLIKE all apps that I am familiar with

TRUTH:

People in Web3 already know that the adoption of Web3 applications and platforms won’t happen unless the user experience is the same or better than apps in current use. The frontend should not indicate in any way that you’re interacting with a Web3 tech. All the tech aspects should be taken care of in the backend. As such, there’s no reason to believe that Web3 apps are unlike our familiar apps. Engineers and developers make it a point to make the UI/UX in Web3 apps as engaging as possible to woo the users.

10) MYTH: BLOCKCHAIN CAN NOT BE HACKED

TRUTH:

An existing blockchain cannot be hacked as in the traditional sense of "being hacked," where malicious code is introduced into the chain or someone "hacks" into the network with brute force and begins making erratic changes. However, an attacker or a group of attackers—could take over a blockchain by controlling a majority of the blockchain's computational power, called its hashrate. If they own more than 50% of the hashrate, they can introduce an altered blockchain in what is called a 51% attack. With majority control, they can make the blockchain function in whatever manner they program it to now. However, this is increasingly difficult for blockchains with large numbers of participants. Note that blockchains with smaller numbers of participants have been attacked in this manner, but larger networks such as Bitcoin and Ethereum—make it nearly impossible to successfully attack due to the costs involved in acquiring 51% of the hashrate or staked crypto.

CONCLUSION

Web3 is the hot topic right now and as is the norm, this will accompany many rumours and myths with it. It is really important to know the correct info before drawing conclusions. Dive into the World of Web3, explore it, think about it and play with ideas - it’ll surely help you to be a step ahead in the tech world. 

This blog is written by Aniket Adhikari for any querry feel free to reach him out