Why Web3 Matters: Understanding the Decentralized Internet


In recent years, the concept of Web3 has gained significant attention and buzz in the tech world. But what exactly is Web3, and why is it so important? In this article, we’ll explore the basics of Web3, how it differs from Web2, and why it matters.

Web3, also known as the decentralized web or the web of trust, is a term used to describe a new generation of the internet that is designed to be decentralized, open, and trustless. Unlike the current internet, which is largely controlled by a handful of tech giants, Web3 is designed to be more democratic and user-centric, where individuals have more control over their data and digital identities.

One of the key differences between Web3 and Web2 is the way in which data is stored and transmitted. With Web2, data is typically stored on centralized servers owned by tech companies, making it vulnerable to hacking and data breaches. In contrast, Web3 is based on blockchain technology, which is decentralized and uses cryptographic algorithms to secure data and transactions.

The importance of Web3 lies in its potential to revolutionize various industries, including finance, healthcare, and education. By eliminating intermediaries and enabling trustless transactions, Web3 has the potential to make these industries more efficient, transparent, and democratic.

In this article, we’ll dive deeper into what Web3 is, how it works, and why it matters.

What is Web3?

Web3 is a term used to describe the next evolution of the internet. Unlike the current Web2, which is dominated by large tech companies and based on centralized servers, Web3 is designed to be decentralized, open, and trustless.

At its core, Web3 is built on blockchain technology, which enables secure, transparent, and trustless transactions without the need for intermediaries.

The core principles of Web3 are decentralization, transparency, and privacy. Decentralization means that data and applications are distributed across a network of computers, rather than being stored on centralized servers.

Transparency means that all transactions on the network are visible to all participants, ensuring that there is no single point of control or censorship. Finally, privacy means that users have control over their data and digital identities, and can choose what information they share with whom.

How Web3 is different from others?

Web3 differs from previous iterations of the internet, including Web2 and Web1, in several key ways:

Web1, also known as the “static web,” was a simple collection of static web pages that provided basic information to users.

Web2, which emerged in the early 2000s, introduced a more dynamic and interactive web, where users could interact with web applications and social media platforms. However, Web2 is still based on centralized servers and controlled by a handful of tech giants.

Web3 has its roots in the early days of blockchain technology, which was first introduced in 2008 with the launch of Bitcoin. Over time, developers realized that the underlying technology behind Bitcoin, known as a blockchain, had the potential to be used for a wide range of applications beyond just cryptocurrency. This led to the development of Ethereum, a blockchain platform that enabled the creation of decentralized applications (dApps).

Since the launch of Ethereum in 2015, Web3 has continued to evolve and expand. Today, there are a growing number of blockchain platforms and dApps that are building the decentralized web.

From decentralized finance (DeFi) platforms to social media dApps and digital marketplaces, Web3 is being used to create new types of applications and services that are more secure, transparent, and user-centric than their centralized counterparts.

How Web3 Works?

Web3 is a decentralized web that uses blockchain technology to enable peer-to-peer transactions and interactions without the need for intermediaries like banks or other financial institutions.

Here’s how it works:

  1. Decentralized Infrastructure: Web3 operates on a decentralized infrastructure that uses blockchain technology, which eliminates the need for intermediaries like banks or centralized servers. This means that transactions and data are processed by a network of computers rather than a single entity.
  2. Smart Contracts: Web3 uses smart contracts, which are self-executing contracts with the terms of the agreement between buyer and seller being directly written into lines of code. Smart contracts are stored on the blockchain and can be used to automate various processes, such as the exchange of assets or the payment of royalties.
  3. Cryptocurrency: Web3 also utilizes cryptocurrency, which is a digital currency that operates independently of traditional financial institutions. Cryptocurrencies can be used to buy and sell goods and services on Web3 networks and can also be used to incentivize users to contribute computing power to the network.
  4. Decentralized Applications: Web3 enables the creation of decentralized applications like Deelance that operate on a decentralized infrastructure and use smart contracts and cryptocurrencies to provide new services and experiences to users.
    Deelance Image
    These dApps are typically open-source and governed by decentralized autonomous organizations (DAOs) that allow users to participate in decision-making.

Overall, Web3 is changing the internet by promoting decentralization, transparency, and trust, which can lead to a more open and accessible digital world.

What are the key Benefits of Web3?

Web3 offers a range of benefits over previous versions of the internet, including increased decentralization, transparency, and trust.

There are several key benefits of Web3, including:


Web3 is built on decentralized technologies like blockchain, which enables peer-to-peer transactions without the need for intermediaries. This reduces the risk of single points of failure, censorship, and data breaches.


Web3 enables transparency by allowing users to view and verify transactions on the blockchain, making it difficult to manipulate data or engage in fraudulent activities.


Web3’s decentralized architecture and transparency help to build trust among users, as there is no need to rely on third-party intermediaries to facilitate transactions or verify data.


Web3 uses encryption and other security measures to protect user data and prevent unauthorized access.


Web3’s decentralized architecture and smart contract functionality enable the creation of new decentralized applications (dApps) that can disrupt traditional industries and business models.


Web3 enables users to own and control their data and digital assets, rather than relying on centralized intermediaries that control access to these resources.

Overall, Web3 has the potential to transform various industries and empower individuals by enabling peer-to-peer transactions, reducing the need for intermediaries, and promoting transparency, trust, and security.

What are the Challenges of Web3?

Web3, like any new technology, faces several challenges that need to be overcome for it to achieve its full potential. Some of the key challenges of Web3 include:

Technical scalability:

Currently, Web3 networks like Ethereum have limited scalability, which can lead to slow transaction speeds and high fees. This limits the usability of Web3 and may deter some users from adopting the technology.


Web3 networks and applications operate on different protocols and standards, making it difficult for them to communicate and interact with each other. This limits the potential of Web3 to create a unified and interconnected decentralized internet.


Web3’s decentralized architecture and lack of central authority pose a challenge for regulators, who may struggle to enforce laws and regulations related to data privacy, consumer protection, and financial regulation.


While Web3 networks and applications use encryption and other security measures to protect user data, they are not immune to hacking and other cyber threats. As Web3 grows and attracts more users and valuable assets, security risks will become increasingly important to manage.


Finally, Web3’s success ultimately depends on widespread adoption by users and businesses. Currently, the user experience of Web3 applications can be complex and unfamiliar to many users, which may limit adoption.

Overall, addressing these challenges will be critical to unlocking the full potential of Web3 and realizing its vision of a more decentralized, transparent, and open internet.


Web3 represents a significant shift in the way we think about the internet and the role it plays in our lives. By enabling greater decentralization, transparency, and trust, Web3 has the potential to transform a wide range of industries and empower individuals in new ways.

While there are still many challenges to overcome, the potential benefits of Web3 make it an exciting and important area of development. As we continue to explore the possibilities of this new decentralized internet, it will be important to balance innovation with responsible regulation and ensure that Web3 is accessible and beneficial to everyone.

To Top

Pin It on Pinterest

Share This