Cryptocurrencies and WEB 3.0: how WEB 3.0 is changing the cryptoindustry

Kosmonavt
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Kosmonavt
12 MIN READ
Analytics and guides
29 June 2023
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Introduction

The term network (Web) has been widely used for more than 32 years, although few people know the history of its origin.

WEB 3.0

In 1989, an English scientist named Tim Berners-Lee shared his vision of a "communication intermediary" for scientists to share and update scientific research results within the CERN (European Organization for Nuclear Research) project. Four years later he created the World Wide Web, which launched the revolutionary era of the Internet.

WEB 1.0

The user is the consumer of the content.
WEB 1.0

The Internet has been constantly evolving since its inception. In the beginning, the Internet was a platform that allowed you to consume content, you couldn't interact with it. An example would be any old newspaper-like news site. You just read and that's it.

Before the Internet moved to a new stage in its development, there was no generational separation of the Internet as such. It simply was what it was. However, developers began to come up with different mechanics to interact with their users. Somewhere they introduced the ability to leave reactions to publications, somewhere they added forms of feedback.

As with blockchain in its early days, enthusiasts began to lay down features that were not even planned for at the beginning of its development.

The same thing happened with the Internet. All the improvements in the standard approach led to the emergence of social networks (Facebook, etc.), e-commerce (Amazon, etc.), and more.

WEB 2.0

This was the boundary of the first stage, which the researchers then conducted.

WEB 2.0

The user is the content creator.
WEB 1.0 and WEB 2.0

The line between WEB 1.0 and WEB 2.0 is actually very abstract. You can't say that some breakthrough service has changed everything. No, as mentioned above, some elements have appeared before. As in any development, a new product borrows some approaches from old products. The best is improved. The worst is cut out.

The concept of WEB 2.0 was first introduced by Darcy DiNucci, but only became widespread after use by Tim O'Reilly and Dale Daugherty at the O'Reilly Media Web 2.0 conference in 2004.

A distinctive feature of WEB 2.0 is the ability to create content by users themselves. This is expressed in communication in social networks through personal messages, commenting on reactions to messages, posting their photos, videos, and so on. Users started to search for information in social networks (Facebook, Youtube, Twitter, etc.), not only in search engines (Google, Yahoo, etc.).

WEB 2.0 has not replaced WEB 1.0, it was a logical development of functionality and is still widely used as "read-only Internet". At the same time WEB 2.0 implies interactivity and still remains the main trend in the existing Internet.

This level of development of the Internet has made it possible to move a huge amount of tasks in the network, which made it possible to optimize the processes and communication of people. 

Over the long years of work and development of the Internet at the level of WEB 2.0 revealed its main shortcomings. WEB 2.0 has borrowed the classic problems of the modern economic model, the unfair distribution of wealth and power (monopoly networks - Facebook, Google, etc.) persists.

This leads to problems of data centralization, which, unlike WEB 1.0, is generated by the users themselves. Centralization itself, combined with monopoly (negligent treatment of data), leads to leaks and misuse of this data.

Everything has to be paid for, if the service is convenient and free, then someone is paying for it. In the case of all modern social networks, your data is sold to companies who use it for marketing purposes.

Centralization also leads to enormous risks of hacking. There are regular news reports that another service has been hacked and that millions of accounts are falling into the hands of cybercriminals, who then use them to commit fraud.

So nowadays, data security and the protection of user privacy are becoming a problem that needs to be solved immediately.

WEB 3.0

The user is the owner of the content.
WEB 3.0

In the beginning, WEB 3.0 was presented as an interaction with artificial intelligence (AI). Algorithms were supposed to analyze the data that is generated when users use different services. The user would then receive only the content they liked. In principle, we see the rudiments of this approach already in modern social networks (Instagram, TikTok, etc.).

But a man would not be a man if he did not make a mistake. Big business is taking advantage of this, using these algorithms to show us more advertisements. States, under the idea of security, violate user privacy and constantly supervise.

For enthusiasts, this path of development through AI was closed after the event of 2013, when Edward Snowden disclosed to the media secret information about the global surveillance system PRISM, which was created by the U.S. NSA.

Current status and plans for WEB 3.0 development

This incident exposed the failure of protecting user privacy when it is centrally enforced by the government or business.

Enthusiasts saw their dreams in blockchain. Dr. Gavin Wood, founder of Polkadot and co-founder of Ethereum, formulated the vision of WEB 3.0 as follows

WEB 3.0 is a comprehensive set of protocols that act as building blocks for application developers. These building blocks should replace traditional web technologies such as HTTP, AJAX and MySQL, and provide a fundamentally new approach to application development. These technologies give the user credible and verifiable assurances about the information they receive, the information they pass on, what they pay for, and what they get in return. By allowing users to act on their own, in a free market with a low entry threshold, we can ensure that censorship and monopolization have fewer places to hide.

Think of WEB 3.0 as the Great Charter of Liberties, the basis of individual freedom, opposing the arbitrary despot.

The introduction of WEB 3.0 using blockchain technologies (as proposed by Dr. Wood) will eliminate the existing disadvantages of the Internet and at the same time get the advantages of the first version of WEB 3.0 (using AI). WEB 1.0 and WEB 2.0 already exist, while WEB 3.0 is being created right before our eyes. The ideas of WEB 3.0 serve as a beacon, which stage by stage determines the direction of the Internet.

Now we see no difference between WEB 2.0 and 3.0. Although the browser looks old, tools such as cryptocurrencies are developing. They will serve as our passport to the new Internet and store all the necessary information about our assets. With this approach it is possible to identify users without the involvement of third-party identification services. 

How it will look at the end, whether it will work out at all, no one knows. It's an interesting path that will evolve into something new in any case, and we will witness it.

Current status and plans for WEB 3.0 development

The main goal is to create a new Internet where everyone is in control of their data and identity.

The key technologies on which will build WEB 3.0 - AI, decentralized data storage and cryptography.

WEB 3.0 service

Basic principles:

  • Interaction without the need for trust (blockchain) - A decentralized protocol is needed for participants to interact within the network. There are many such ecosystems at the moment. All of them are trying to improve some elements to be better.
  • Decentralized data storage - there is a big problem on this issue, because the amount of data generated by various services today is enormous. You need a very large number of servers to store such volume. Centralized solutions solve this successfully, as they can afford to pay for it with the profits they make from the use of user data. Until the economic problem of decentralized storage is solved, there will be no widespread development (motivating users to run their own nodes to store data).
  • Decentralized computing and communications - trying to find efficient solutions for data transfer and asset sharing is tackled by almost all ecosystems on the market.
  • Decentralized applications - The main current problems are data security and privacy. It can be solved with decentralized applications. They can protect the user from data collection by applications.
  • Decentralized identity is the main problem, which is what we need to fight against.
    With any registration in the application, a WEB 2.0 service, it collects data. The problems of this approach have been written about above. Decentralized identity (DID - decentralized ID) - a set of decentralized IDs that allows users to control their digital identity and data. When registering with a new application using DID, you can use the application itself, while protecting your data from third-party interference.
  • UI optimization - dedicated blockchain browsers that support decentralized applications (DApps), decentralized identity (DID) and decentralized data.

Roadmap and development plans

Roadmap and development plans

Blockchain and its unique technologies make the digitalization of everyday life possible. This transition is inevitable and makes us think about what different versions of the digital world might look like. Imagine a time when real life and the digital world will be equally important to us. At that point, a robust means will be needed to verify and identify all users to enter the digital space. Our interaction with the digital world in the future will not be limited to traditional text, music and video. Real digital worlds will be available for users to explore through their digital avatar. Users will be able with one digital identity to use various applications, participate in social activities and meetings, remain anonymous, or provide limited information as they choose. Users will be able to transact just as they would in the real world, without having to disclose information about their identity or assets.

Anonymity will not be a sign of crime. Instead, it will protect the privacy of user data and monitor the integrity of network participants. For example, the system will be able to assess all user activities that affect a user's credit rating and lower it for suspicious activities. Users with a low credit rating will be blocked from the apps, but they will be able to restore their rating by paying fines or fulfilling their obligations. But information about the events that occurred will remain recorded in the system.

Anonymous accounts will be able to match "digital identities" and even real-world identities with KYC (Know Your Customer - anti-money laundering identity verification standard) procedures to prevent malicious behavior. In the digital world, it will be possible to manage and own various assets, such as real estate in games. Ownership and home value will be guaranteed by decentralized data stores and algorithms. Blockchain technology will decentralize digital assets, and algorithms, combined with decentralized management, will protect the security of property rights.

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Frequently Asked Questions about Cryptocurrencies and WEB 3.0

What is Web 3.0 and how is it related to cryptocurrencies?

Web 3.0 is the next generation of the internet, which includes decentralization, blockchain technology and smart contracts. This generation of the internet is closely related to cryptocurrencies as they are a key component of decentralized financial services and applications.

How is Web 3.0 changing the crypto industry?

Web 3.0 is empowering the crypto industry by adding new applications and services such as decentralized autonomous organizations (DAOs), decentralized financial services (DeFi), and tokenized assets.

How does Web 3.0 facilitate the creation of decentralized applications (DApps)?

Web 3.0 provides the infrastructure to create DApps that run on blockchain and offer the user new kinds of services and applications that operate without central control.

How do blockchain and cryptocurrencies provide transparency and security in Web 3.0?

Blockchain provides immutability and transparency of transactions, while cryptocurrencies provide a secure and decentralized way to conduct these transactions.
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