What is Web 3.0?

Web 3.0 is gaining attention as the next generation of the Web. This session will explain the basics of Web 3.0, how it differs from the conventional Internet, and its distinctive merits, including its relationship with cryptographic assets (virtual currency).

The basics of Web 3.0 and its relationship to crypto assets (virtual currency)

Web 3.0 is a concept that we have been seeing a lot of recently. This is a concept that represents the next generation of the Internet, but many people may not know what it is.

In this section, we will explain the concept of Web 3.0, its differences from the conventional Internet, and its characteristics.

Web 3.0 is the next generation of the distributed Internet

Web 3.0 is often written as just Web 3. The term was reportedly first used by Ethereum (ETH) co-founder Gavin Wood in 2014 to refer to a "decentralized online system" based on the blockchain.

Web 3.0 and the Difference from the Previous Net

From the birth of the Internet to today, there have been a number of revolutionary changes and evolutions. However, in terms of information flow and its control, we can see that it has gone through three phases. These are often referred to as Web 1.0, Web 2.0, and Web 3.0. Let us explain the difference between each of them.

・Web 1.0 was a one-way flow of information.

Web 1.0 was born in 1969 and refers to the Internet through the 1990s. Although commercial use of the Internet began and evolved, the flow of information and communication was one-way only. It was a time when the roles of each party were clearly separated, with the site owner transmitting information and the user receiving it.

・Web 2.0 was the beginning of interactive communication

Web 2.0 was the early 2000s, when many social networking services launched. This was the beginning of interactive communication, where anyone could send and receive information, which had previously been a one-way flow of information.

On the other hand, tech companies represented by GAFA (Google, Apple, Facebook, and Amazon) grew significantly. A vast amount of information, including personal data, is now managed by some of the largest companies, and the risk of cyber-attacks and information leaks has become a major issue.

・Web 3.0 for moving from centralization to decentralization

The concept of Web 3.0 has been gaining attention since the beginning of the 2010s. It is characterized by the use of blockchain technology, which is decentralized and managed by a large number of participants, to eliminate the conventional centralized style. If information is distributed, workload concentration can be avoided, and if information is shared by all participants, the risk of system downtime or data loss can be minimized. It is expected that a more secure and stable Web 3.0 network environment will be realized in the future.

Web 3.0 features

Now that we have introduced the changes in the Internet environment, let's look again at the features of Web 3.0. All of these elements will solve the problems of the past Internet environment and further expand its possibilities.

No centralized administrator

In Web 3.0, there is no centralized administrator to manage the system and accumulate data. Instead, many users participating in a particular blockchain share information with each other. This decentralized system allows the entire system to function without an administrator.

In addition, the use of smart contract technology, represented by the crypto asset (virtual currency) Ethereum (ETH), makes it possible to automatically execute a specific program when predetermined conditions are met. The blockchain, which is virtually impossible to tamper with or fabricate, and smart contracts allow for fraud-free transactions without administrative control or approval.

Equal and fair service delivery can be expected.

The absence of a centralized administrator means that there is no arbitrary manipulation by that administrator. In other words, there is no possibility of a service provider suddenly suspending service or denying login at their discretion. As a result, everyone has equal and stable access to the service.

An ideal creator economy can be realized.

The creator economy refers to a two-way economic sphere in which creators themselves are both rewarded for their digital performance and become consumers.

Web 3.0 eliminates the need for a centralized administrator, allowing for a direct connection between creators and users, or "direct delivery from the place of origin," so to speak. This creates a favorable environment for creators who create and provide various types of digital content.

Areas where Web 3.0 is currently being used

Blockchain-based Web 3.0 is already being used in a variety of areas and by a growing number of users. Let's look at a few examples.

・Gaming Market

In the gaming market, many services are offered under names such as blockchain games and NFT games. In addition to playing, you can use the in-game currency to buy and sell items, and exchange the proceeds from the game into crypto assets (virtual currency).

・Music Market

In 2021, the music market had grown to the point where streaming viewership accounted for 65% of global revenues (from IFPI's Global Music Report 2022). At the same time, the problem of artists receiving a smaller share of revenue was left unaddressed.

However, the advent of Web 3.0 streaming platforms is expected to ensure fair revenue sharing and create an artist-first environment.

・Retail and e-commerce industry

The retail and e-commerce industries are expected to undergo major changes as well. Web 3.0 will create a platform for all consumers to participate, creating a community that includes manufacturers, retailers, and consumers. Ideas for product development and sales can be generated and shared, and where investments in valuable products can be made.

・Animation and manga markets

The animation industry has long used the production committee method to raise funds. While this method has the advantage of reducing the risk of investment, it also reflects the wishes of the sponsors in the production of the work. On the downside, creators' freedom and remuneration are restricted.

With Web 3.0, however, the ability to create a DAO (decentralized autonomous organization) in which creators and fans can participate and in which investments and profits can be distributed is likely to be a major advantage.

Web 3.0 and its relationship to crypto assets (virtual currency) and the metaverse

Web 3.0 has a high affinity with cryptographic assets (virtual currency) because it utilizes blockchain technology. Metaverse, a virtual space, is also expected to become an important platform in Web 3.0.

In Web 3.0, crypto assets (virtual currencies) are the main method for payments

In Web 3.0, services are built on blockchains for crypto assets (virtual currencies), and it is standard that rewards and compensation are paid in the crypto assets (virtual currencies) on which they are based. The following is a list of major crypto assets (virtual currencies) related to Web 3.0.

・Ethereum (ETH)

Ethereum (ETH) is a development platform for decentralized applications (DApps) and is a major crypto asset (virtual currency) with a market capitalization second only to Bitcoin. DApps are used for payments and fees.

・Basic Attention Token (BAT)

Basic Attention Token is a crypto asset (virtual currency) created using the Ethereum (ETH) token standard and can be used for various services using the Ethereum (ETH) chain. It is also a Web 3.0 browser.  BAT is used for tipping creators, among other things.

・Polka Dot (DOT)

Polkadot offers the Substrate blockchain framework, which allows new blockchains to be developed at low cost. Blockchains created here are interoperable with Polkadot and can also be made compatible with other existing chains.

・IOST (IOST)

IOST has the advantage of using a consensus algorithm called PoB for high-speed transactions. DApps, which is built on this chain of crypto assets (virtual currency), also uses JavaScript as its development environment, making it easy to develop and a low hurdle to entry.

The Metaverse will be the recipient of Web 3.0

The Metaverse is a virtual space where people can enjoy communication using their own alter egos (avatars), and in the Web 3.0 world, it will play a role not only as a communication tool but also as a receptacle for data and information.

In the Metaverse, as in the real world, various goods and services will be traded, and cryptographic assets (virtual currency) will be used as a means of payment.

What is the future of Web 3.0?

Web 3.0 has not yet been widely adopted by the general public, but as we have shown, many services have already been developed in various fields and their potential is promising.

So how will Web 3.0 evolve in the future?

More DAOs

With no centralized administrator, Web 3.0 is expected to become a "decentralized autonomous organization" where decisions are made by voting by blockchain participants, rather than top-down as in a traditional enterprise.

By setting up an office in the Metaverse, a company building is not necessary, and there is no limit to the number of employees that can be added or subtracted. As these trends accelerate and spread throughout society, the decentralization of organizations may eventually occur in the real world as well.

Japan is interested in Web 3.0 and is moving forward

Businesses are not the only ones paying attention to Web 3.0. Governments are also exploring policies for Web 3.0 as part of their national policies.

In Japan, for example, the so-called "Kotta-no-Moroshi" (policy of the government), approved by the Cabinet in June 2022, clearly states the consideration of environmental improvements to promote Web 3.0, and the Digital Agency has a priority plan as a more concrete measure.

If the government advances these various measures along with the development of laws, it can be expected that the private sector will accelerate the enhancement of services and technological development.

Some are reluctant to join Web 3.0

While many people welcome Web 3.0, work on numerous projects, and are hopeful about its future, it is hard not to be skeptical.

Elon Musk, who has successfully launched a number of notable businesses, said that Web 3.0 and the Metaverse are "just buzzwords.” Jack Dorsey, founder of X (formerly known as Twitter), said, "The proliferation of Web 3.0 will only replace the big companies with venture capitalists and their limited partners (i.e. investors), who will benefit from a different label, a centralized entity.”

Although Web 3.0 is gaining a lot of attention, the future of Web 3.0 remains largely undetermined.

If you're going to invest in crypto assets (virtual currency), look to Web 3.0!

DAOs, NFTs, and Metaverses instead of centralized management regimes. These elements of Web 3.0 will not only revolutionize the online society, but also create a new economic sphere. If this happens, crypto assets (virtual currencies), which have often been treated speculatively, will play an increasingly important role as real currency.

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