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Explainer | What is Web3? The term often confused with crypto, NFTs and the metaverse is getting popular
- Conversations around new technologies like blockchain, cryptocurrencies, NFTs and the metaverse are shifting towards the more inclusive term of Web3
- This vision of a decentralised web has become a major theme at events like Hong Kong’s FinTech Week 2022
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Depending on who you ask these days, Web3 is either imploding or finally escaping the shadow of sketchy cryptocurrency businesses for a more sustainable future.
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The collapse of FTX, once the second-largest crypto exchange in the world, sent shock waves through the market. This caused some people to cast doubt on the future of Web3, which has long been conflated with cryptocurrency even though it is supposed to encompass so much more.
Still, many have not given up on blockchain technology and the dream of a decentralised web. Yat Siu, chairman and co-founder of Hong Kong-based Animoca Brands, said he worried about the reputational damage to Web3 from FTX’s bankruptcy. But his commitment to Web3 as a “natural evolution of the internet” remains unshaken.
A similar sentiment can be found among many of the Web3 faithful, but for observers, it is not always clear what people are actually referring to when they use the term. So here is a look at what Web3 is and why it is more than just a blockchain-based internet.
What is Web3?
Web3 is the hypothetical next-generation version of the World Wide Web that is decentralised and distributed through the use of blockchain and similar technologies.
The term is often conflated with cryptocurrencies, non-fungible tokens (NFTs) and the metaverse because it has risen in prominence at the same time and uses some of the same underlying concepts, but it encompasses much more than just blockchain-based assets and virtual worlds.
Ethereum co-founder Gavin Wood coined the term Web 3.0 2014, three years before starting the Web3 Foundation, to refer to a version of the web where user information is not stored and controlled in centralised servers. Inspired by the Edward Snowden leaks the previous year – which detailed the broad scope of data collection by US intelligence services – Wood imagines a web based around public key infrastructure that secures user identities and that identifies content by its hash signature instead of an address pointing to a specific server.
Jay Graber, project lead for the Twitter-backed decentralised social media initiative Bluesky, refers to this new era as “the signed web”, with Web 2.0 being “the posted web” and what is now called Web 1.0 being “the hosted web”.
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