Web3

Web3 represents a paradigm shift in how the internet operates—from centralized platforms controlled by corporations to decentralized protocols owned by users. Built on blockchain technology, Web3 aims to return data ownership and economic value to individuals rather than extracting it for shareholders.

Web1, Web2, Web3: Evolution of the Internet

Web1 (1990s-2004): Read

Static websites, blogs, forums
Content consumption
Companies: Yahoo, Geocities, AOL
Users could read but not interact much
"The information superhighway"

Web2 (2004-Present): Read-Write

Social media, user-generated content
Interactive platforms
Companies: Facebook, Google, Twitter, Amazon
Users create content but platforms own it
"Platform economy"
Centralized data collection and monetization

Web3 (Emerging): Read-Write-Own

Decentralized protocols and applications
Blockchain-based ownership
Companies: Uniswap, OpenSea, Aave (protocol DAOs)
Users own their data, identity, and economic value
"Ownership economy"
Token-based incentives and governance

Core Principles of Web3

Decentralization

No single entity controls the network. Data and applications run on distributed networks of computers rather than company servers.

Web2: Twitter can ban your account, deleting your followers and content. Web3: Your social graph exists on-chain. No company can erase your identity or relationships.

User Ownership

Users own their data, content, and digital assets through cryptographic keys and blockchain records.

Web2: You create content for Instagram, but Meta owns it and profits from ads. Web3: You mint NFTs of your art, earning royalties from every resale. You control distribution.

Permissionless

Anyone can build on open protocols without asking permission or paying gatekeepers.

Web2: Apple and Google approve (or reject) your app, taking 30% of revenue. Web3: Deploy smart contracts to Ethereum without approval. No app store, no cut.

Native Payments

Built-in value transfer without intermediaries. Send money as easily as sending a message.

Web2: Payment processors take 3-5%, international transfers take days and cost $$$. Web3: Send USDC globally in seconds for pennies. Payments are protocol-level, not bolted-on.

Trustless Interactions

Smart contracts execute automatically without trusting counterparties. Code enforces agreements.

Web2: Trust Airbnb to hold your payment and release to host. Web3: Smart contract automatically releases payment when stay is complete. No intermediary needed.

Key Web3 Technologies

Blockchain: Distributed ledger providing truth consensus without centralized authority.

Smart Contracts: Self-executing code enabling trustless agreements and applications.

Cryptocurrencies/Tokens: Native digital assets for value transfer, incentives, and governance.

Wallets: Users control private keys, managing identity and assets without accounts/passwords.

Decentralized Storage: IPFS, Arweave, Filecoin replace Amazon S3 with distributed file storage.

Decentralized Compute: Akash, Render Network provide computing power without AWS.

Decentralized Identity: Self-sovereign identity systems where you own and control your credentials.

Web3 Applications (DApps)

DeFi: Uniswap (exchange), Aave (lending), MakerDAO (stablecoins)—financial services without banks.

NFTs and Digital Ownership: OpenSea (marketplace), Blur, Art Blocks—verifiable ownership of digital items.

DAOs: MakerDAO, Uniswap DAO—organizations governed by token holders, not executives.

Social: Farcaster, Lens Protocol—social networks where you own your followers and content.

Gaming: Axie Infinity, The Sandbox—games where players own in-game assets as NFTs.

Creator Economy: Mirror (publishing), Zora (music/media)—creators monetize directly without platforms.

Identity: ENS (blockchain names), Worldcoin—verifiable identity without companies.

Infrastructure: The Graph (indexing), Chainlink (oracles)—decentralized services for other DApps.

How Web3 Works Differently

Sign In:

Web2: Username/password, Google login
Web3: Connect wallet—cryptographic signature proves identity

Data Storage:

Web2: Company databases (MySQL, MongoDB)
Web3: Blockchain (permanent, public) + decentralized storage (IPFS, Arweave)

Application Logic:

Web2: Server-side code on AWS/Google Cloud
Web3: Smart contracts on blockchain + client-side code

Monetization:

Web2: Ads, selling user data, subscription fees
Web3: Transaction fees, token appreciation, protocol revenue sharing

Governance:

Web2: CEO/board make decisions
Web3: Token holders vote on protocol changes

Web3's Value Proposition

For Users:

Own your data and digital assets
Earn from your contributions (tokens, NFT royalties)
Participate in platform governance
Censorship resistance
Privacy (optional transparency)

For Developers:

Build on permissionless protocols
Composability—combine protocols like money legos
Built-in monetization (tokens, fees)
No platform risk (Apple can't remove your app)
Instant global payments

For Creators:

Direct relationships with fans (no platform middleman)
Programmable royalties on all secondary sales
Token-gated communities
Fractional ownership of works

Criticisms and Challenges

User Experience: Managing private keys, gas fees, and blockchain complexity is hard. Most people don't want this responsibility.

Scalability: Blockchains process far fewer transactions than centralized systems. Ethereum: ~30 TPS. Visa: thousands of TPS.

Irreversibility: No customer support to reverse mistaken transactions. Send to wrong address, funds are gone.

Environmental Concerns: Proof of Work blockchains consume massive energy (though Ethereum's PoS solved this).

Speculation: Much Web3 activity is speculation rather than utility. Token prices volatile, many projects are pump-and-dumps.

Regulatory Uncertainty: Governments struggle with how to regulate decentralized protocols.

Plutocracy: Token-based governance can concentrate power among wealthy holders.

"Still Early": Many Web3 apps have worse UX than Web2 equivalents. Promising but immature technology.

Centralization Creep: Many "decentralized" apps rely on centralized infrastructure (AWS, Infura). True decentralization is hard.

Web3 vs The Metaverse

Often confused but distinct concepts:

Web3: Decentralization, blockchain, ownership layer for the internet Metaverse: Immersive virtual worlds (VR/AR), may or may not involve blockchain

Web3 can enable metaverse economies (own virtual land as NFTs, virtual goods tradeable), but metaverse doesn't require Web3. Meta's Horizon Worlds is metaverse but centralized Web2.

Adoption Trajectory

Early Adopters (2020-2023): Crypto-natives, DeFi users, NFT collectors, developers

Early Majority (2024-2027?): Simplified wallets (account abstraction), better UX, mainstream apps integrating Web3 features

Mass Adoption (Unknown): When Web3 features invisible to users. Just works better than Web2.

Currently Web3 has ~50 million active users. Internet has 5 billion. Penetration is <1%, similar to internet in early 1990s.

Corporate Interest in Web3

Traditional companies exploring Web3:

Financial: JPMorgan, Goldman Sachs building on blockchains Tech: Meta (NFTs on Instagram), Reddit (NFT avatars), Twitter (tipping) Brands: Nike, Adidas, Starbucks launching NFT programs Gaming: Epic Games, Square Enix investing in blockchain gaming

Most remain cautious, testing waters without full commitment.

The VC Perspective

a16z (Andreessen Horowitz) raised $7.6B for crypto funds, articulating the "Web3 is the future" narrative. Other major funds followed.

Critics note VCs are heavily invested and thus motivated to promote Web3 regardless of actual value. The "Web3 is a grift" counternarrative suggests it's primarily enriching VCs and early token holders.

Truth likely lies between extremes—Web3 has real innovation but also hype and speculation.

Career Opportunities

Web3 has created entirely new career categories:

Web3 Developer ($120k-$350k+): Build DApps, smart contracts, integrate blockchain APIs

Blockchain Protocol Engineer ($160k-$450k+): Core blockchain development, consensus mechanisms

Smart Contract Developer ($150k-$400k+): Solidity/Rust, DeFi protocols, NFT platforms

Web3 Product Manager ($130k-$280k): Define DApp features, understand crypto-native UX

Community Manager ($60k-$120k): Nurture DAOs, Discord communities, token holders

Tokenomics Designer ($120k-$280k): Design token economics, incentive mechanisms

Web3 Marketing ($80k-$180k): Crypto-native growth strategies, community building

Crypto Analyst ($80k-$160k): Research protocols, analyze tokenomics, market insights

DAO Operations ($80k-$180k): Coordinate decentralized teams, manage treasuries

The Future of Web3

Optimistic View: Web3 becomes the standard internet infrastructure. Users own their data, platforms can't extract rent, creators earn fairly. Decentralization preserves freedom and privacy.

Skeptical View: Web3 remains niche for financial speculation. Real applications stay centralized for better UX. Most "Web3" becomes rebranded Web2 with token tacked on.

Realistic View: Hybrid future where certain applications benefit from blockchain (finance, digital ownership, identity), while others remain centralized where it makes sense. Web3 coexists with Web2.

Reading List

Advocates:

Chris Dixon, "Why Web3 Matters"
Packy McCormick, "Not Boring" Web3 posts
Vitalik Buterin, Various blog posts

Skeptics:

Moxie Marlinspike, "My first impressions of web3"
Molly White, "web3 is going just great" blog
Nicholas Weaver, Various critiques

Balanced:

Tim O'Reilly, "Why it's too early to get excited about Web3"
Ben Thompson, Stratechery Web3 analysis

Web3 represents both tremendous opportunity and ongoing experimentation. The technology enables fundamentally new economic and social coordination mechanisms—DAOs, DeFi, digital ownership. Whether it fulfills the promise of returning the internet to users or remains a speculative sideshow depends on solving real UX, scalability, and regulatory challenges. For builders and career-seekers, Web3 offers frontier opportunities with high risk and high reward. Understanding the vision, technology, and criticisms equips you to navigate this rapidly evolving space.