The WWW revolutionized access to information, Web2 revolutionized interactions (Front-end), and we are now living through a new digital revolution, the era of Web3: the revolution of agreements and value exchange (Back-end).
While the WWW was limited by data centralized on a server, with information exchanged via IP and protected by firewalls, Web2 brought us social networks, revolutionizing interactions by bringing producers and consumers of goods and services closer together. Web2 made it possible to enjoy interactions (P2P) on a global scale, but always with a trusted intermediary. In this context, blockchain networks seem to be the beginning of a new era of the Internet, which some refer to as Web3.
Web3 represents a set of protocols with distributed ledgers as their backbone. Information or data is managed and secured collaboratively, by consensus, by a P2P network of computers that are incentivized with a network token for their activities. Trying to manipulate this information or data is like breaking into several houses around the planet at the same time: it may be possible in theory, but in practice it is financially unfeasible.
Blockchain: A State Protocol
Today the internet uses a network that has no reliable state protocol, that is, a status of "Who is who?", "Who owns what?", "Who has the right to do what?", and this is essential for efficient markets: "state" is a key property for managing and transferring value. In Web3, value is represented by cryptographically secure digital currencies. The Bitcoin network introduced a mechanism by which each node in the network can send and receive tokens, and in which the state of the tokens is permanently recorded digitally in the native format.
This consensus protocol of the Bitcoin network is designed so that the network can collectively remember previous events or user interactions, providing a single source of reference that is collectively maintained in public.
Other Web3 Protocols
Blockchain, although the best known, is not the only technology needed to decentralize the Web. Other protocols are needed, in addition to decentralized computing, storage, messaging, identities and other services. Blockchain is simply the processor of this information, operating at the top of Web3 and recording all token transactions. Blockchain networks are not ideal for storing data, for two main reasons:
(I) public blockchain networks are too slow and expensive to store large data sets;
(II) storing plain-text data on blockchain networks does not allow so-called "privacy by design*".
A significant number of decentralized storage network solutions are emerging, among them: IPFS, Filecoin, Swarm, Storj or Sia, where sharing storage space is incentivized through a native token, turning cloud storage into an algorithmic market, like the "Golem" protocol, which rewards contributions to the network with its native token. To create more and more large-scale decentralized solutions, network participants need to be rewarded with a token so that the network remains resistant to attacks. Examples of this would be incentive mechanisms for decentralized file storage solutions. Fully decentralized solutions without rewards, such as IPFS and Swarm, are not yet functionally implemented.
Speed, performance and usability are crucial points in Web3 that will most likely be solved as projects scale, making applications more decentralized. This does not mean that we will completely get rid of centralized systems such as the use of APIs (Application Programming Interfaces), which still have a big advantage in terms of speed and reliability and will prevail in many aspects of Web3 technology.
Decentralized Applications on Web3
A decentralized application is a blockchain client called a "wallet". It uses the same technologies to render a mobile application (such as HTML, CSS, Javascript), but communication is established through a blockchain network instead of a server and, in the case of smart contract networks, through "smart contracts". The wallet also manages the public-private key pair and the blockchain address, to provide a unique structure for the network nodes, so that they can interact securely with the network. Smart contracts represent the business logic and process data "feeds" from inside and outside the network to manage the state of all actors in the network.
Simply put, a network node is the point where a message can be created, received or transmitted. If the node is a "full node", it will also manage the complete state of the entire blockchain since its creation. Decentralized applications need to look and feel the same way as existing ones, which means they need to be just as easy and intuitive to use in order to be adopted on a larger scale. Currently, decentralized applications are still difficult for ordinary users to use and understand, which may be a bottleneck for the mass adoption of Web3 applications. In addition, large-scale adoption can only happen if distrust of centralized solutions is high enough to justify the usability "trade-offs".
*Privacy by Design is a framework whose central proposal is to build privacy and personal data protection into all projects developed by an organization, from their conception.