The New Internet and Web3: Is Crypto the Answer?
The internet is changing as we know it. The digital world has been transitioning, been reinventing itself one or more times since static web pages to social hubs and currently moving towards decentralization and Web3 is not far behind. Web3 is heralded as the future of the internet, with user control, privacy and sovereignty. The centerpiece of this change is “cryptocurrency” but is crypto truly the key to this new web?
Web3 and the eruption of the digital age
Web3 is the concept of the Internet with the decentralization that uses the blockchain technology. As compared to Web2 whereby most of the online information and platforms are controlled via the few technology giants, crypto casinos, Web3 is focused on the delegation of ownership back to users. Less go between and more of peer to peer and the distributed as opposed to the ones on the networks and the servers.
Blockchain is the technology that forms the base of Web3: it is a system that allows keeping records safely, transparently, and immutably. Be it financial transactions or smart contracts or an online identity, the blockchain model enables individuals to directly interact with each other without the need of an intermediary, whether it be a bank, a platform or a government.
Enter Cryptocurrency
This is where the cryptocurrency enters the picture. Bitcoin and Ethereum are types of cryptocurrencies that operate on blockchain networks. Beyond being digital currencies, they also power decentralized applications (dApps) and smart contracts, and networks that power Web3.
To a large degree, Web3 is nothing without crypto. For instance, on Ethereum, users pay “gas fees” (in ETH) to run programs or validate transactions. Their native tokens do more or less the same on other platforms such as Solana or Polygon. Crypto renders Web3 systems to be incentive-based, where users are rewarded with tokens with which they can consume or contribute to it.
The Major Ways in which Crypto Powers Web3
To give a clearer context of the place crypto has, the following are the fundamental ways that the crypto spurs the Web3 ecosystem:
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The Best Methods Crypto Is Pushing Web3 Advanced — True Ownership of Digital Assets NFTs and tokens allow users to actually own digital goods, whether it be art and music, gaming objects and domains.
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Decentralized Finance (DeFi) — Crypto enables users to lend, borrow, and earn interest without traditional banks or financial intermediaries.
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Smart Contracts — Smart contracts are self-automated agreements which are used in blockchain and outsource the need of middle parties. Their execution is paid off by crypto.
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Incentive Models — Platforms pay a user to at least participate, moderate or supply resources such as compute power or bandwidth in tokens.
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Governance - The token holders may vote to make decisions on platform changes, rules and funding of the platforms, building governance structures that are community-based.
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Cross-Border Access — Crypto allows one to cross-border access: conduct trades, invest, and communicate with anyone in any country without the use of a bank or a fiat currency.
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Identity and Privacy — Cryptographically secured identities on the blockchain enable the users to specify what information is shared and by whom.
The use cases show why crypto cannot be treated only as a speculative investment but as infrastructure. The tokens used to interact through, govern and trust are crypto tokens.
Is Crypto the Key then?
Yes, in most respects, crypto is the enabling technology of a decenterized web. It enables the mechanics of trustless systems, the incentives to the users and the monetary basis of decentralized economies. Without it, Web3 would never be more than an idea, but a functioning one.
Yet, it also goes without saying that crypto alone is not enough: for Web3 to become a success, it must address a concern around usability, scalability issues, climate effect and the absence of the trust of the majority. The engine is crypto but to make this revolution move forward we need infrastructure, regulation and a good user experience that truly can be considered the wheels.