What Is Web 3.0? The Comprehensive Guideline Of What You Can Do, Use Cases, And The Latest Trends

The movement toward Web 3.0, which is said to be the next generation of the Internet, is accelerating. And the crucial component is blockchain.

Its use cases are expanded, such as traceability in the manufacturing industry, issuance of unique tokens, DeFi, DAO, NFT, and blockchain games. Since there is no centralized administrator and it is excellent in security and transparency, the convenience and safety that Web 2.0 did not have is a prime mover. Use cases are spreading in various industries.

Therefore, in this article, we will explain the overview, mechanism, and features of Web 3.0, what can be done with Web 3.0, use cases, and the latest trends in 2023.

What is Web3.0 (Web3)? Easy-to-understand Explanation

Let’s start with the basics of what Web 3.0 is.

History of the Internet up to Web3.0 (Web3)

Before the emergence of Web3.0, there were two generations, “Web1.0” and “Web2.0”. In a nutshell, it is the revolution of Internet transformation. Due to the needs of the times and the evolution of technology, what can be done on the Internet and how to use it have undergone major changes. And more innovation and seismic changes are about to occur in Web 3.0.

First, let’s trace the history of the Internet up to the present.

The 1990s (Web 1.0)

The 1990s were the dawn of the Internet. In the early days, there were still many word processor users, and mobile phones were only available for the privileged and wealthy. When talking about technology, mass audiences in this period only imagined games

Microsoft turned the tide when it released Windows 95. Along with the explosive sales of operating systems, the penetration rate of personal computers expanded rapidly, and the number of Internet users gradually increased. During that era, the Internet was primarily characterized by a model where a limited number of distributors supplied information, while numerous users simply browsed through it without active participation. This era is commonly referred to as “Web 1.0”.

The 2000s to 2021 (Web 2.0)

In the 2000s, the presence of e-commerce (electronic commerce) such as Amazon and Rakuten began to heat up the race of online shopping. Still, when shopping using a computer was mainstream, the number of users was limited. The first time it appeared, it attracted only a limited number of users.

However, since the launch of the iPhone in 2008, the shift from mobile phones to smartphones has progressed rapidly in just a few years. As a result, the number of users using smartphones for online shopping has increased rapidly. At the same time, information dissemination and interaction between individuals and companies using SNS, YouTube, blogs, etc., have gained dramatic popularity. This is “Web 2.0”, and it is a big difference from Web 1.0, which was mainly a unidirectional flow from the distributor to the viewer.

Web 2.0 lasted about twice as long as Web 1.0, and during this time, there has been a major digital transformation around the world. Apart from representative examples including IoT (Internet of Things), AI (artificial intelligence), and supercomputers, the applications of big data in business aspects will increase dramatically.

Due to this trend, the issue of data exploitation and high fees imposed by dominant platforms has gradually emerged. The market dominance of major tech giants like GAFAM has become a serious concern, leading to global movements calling for their criticism and regulation. In order to access the services provided by these centralized platforms, users are required to adhere to their rules. However, despite the convenience they offer, there is growing dissatisfaction and a sense of unfairness in terms of personal information being used without consent, privacy breaches, limitations on freedom of expression, and excessive charges. This has caused frustration among users, indicating a rising demand for alternative technologies.

Blockchain Technology Essential for Web3.0 (Web3)

In response to the trend of Web 2.0 as described above, “Web 3.0” has appeared, backed by a completely new technology called blockchain.

What is Web 3.0?

Web 3.0 is the next generation based on blockchain, in which all nodes (devices) are connected by P2P (Peer to Peer) and data can be exchanged directly without going through a client-server operated by a centralized administrator. It refers to the era in which the Internet and services that make use of that technology are provided.

Differences Between Web 2.0 and Web 3.0

In Web 2.0, access to services was only possible through the platform owner’s client-server system. For instance, when using YouTube, you would create an account with Google, providing personal information, and your viewing history would be stored and shared with Google for free. This data would then be used to deliver targeted advertisements, often raising concerns about privacy infringement.

On the other hand, in Web 3.0, individuals engage in transactions directly, eliminating the need to provide data to platform owners and preventing unauthorized use of personal information. Additionally, there are minimal or no transaction fees involved. Unlike Web 2.0, where administrators can modify or delete data, blockchain technology ensures that transaction history is stored in blocks and managed through a secure cryptographic mechanism. This makes it highly unlikely for third parties to tamper with the data, and users themselves cannot alter it. The robustness of blockchain significantly reduces the risk of data hacking, making it a unique advantage of Web 3.0.

Moreover, in Web 2.0, if the client-server system experiences issues, all users are unable to use the service. However, with blockchain, even if some problems occur, the system continues to operate as data is managed and shared across multiple nodes, ensuring uninterrupted service.

Additionally, Web 2.0 always requires an administrator, which involves human effort and costs. In contrast, blockchain enables the automation of transactions through smart contracts. Smart contracts are preprogrammed protocols that automatically execute agreements. This automation allows for the seamless operation of “who,” “what,” “when,” “how much,” and “how” within the system, without relying on human labor. For instance, remittance no longer requires banking fees, and transactions involving securities, insurance, and real estate do not incur extra charges.

How Web3.0 (Web3) Works?

How Web3.0 (Web3) Works?

“Blockchain” is translated as a “distributed ledger.” The reason it is called “distributed” is that it consists of numerous nodes, which are individual computers connected in a peer-to-peer manner without the need for a central server managed by a large tech company. Each node plays an equal role in sharing and managing the data. The location of the nodes is not significant as long as they are connected to the internet, allowing the network to span across different regions and countries.

Periodically, all transaction data within a specific time frame is recorded in a database as a block, forming a chain of transaction blocks that continues endlessly over time. Storing each block independently would make the system fragile and vulnerable to hacking. Therefore, the name “blockchain” was given to highlight the interconnectedness of the generated blocks, ensuring consistency between them.

In the blockchain, the data within each block is converted into a unique digital signature called a hash value using a special mathematical function called a hash function. This hash value is included in the subsequent block. The hash function consistently generates the same hash value for the same input data, but it is virtually impossible to reverse-engineer the original data from the hash value. If an attempt is made to tamper with the data within a block, the hash value changes, and the consistency of the blockchain is compromised. This makes it exceptionally difficult to alter the data, as it would require changing the hash values of all subsequent blocks.

With this mechanism, various transaction data, such as currency transfers, sales, supply chain details, transportation information, and delivery routes from suppliers to consumers, can be converted into data and managed securely. Once recorded in a block, the data is immutable and remains preserved indefinitely. Moreover, all participants in the blockchain network can view the data, ensuring transparency and enhancing trust in the system’s reliability.

Features of Web3.0 (Web3)

Let’s introduce six main features of Web 3.0.

Features of Web3.0 (Web3)

Lack of a Central Administrator

In Web 3.0, the reliance on centralized administrators, such as large tech companies, financial institutions, governments, and local authorities, is eliminated. This means you won’t need to unnecessarily disclose your personal information or pay hefty service fees. You can conduct business, build assets, pursue hobbies, and more, according to your own rules, rather than conforming to the convenience of an administrator. Additionally, unlike Web 2.0, where the URL varies for each country or region, Web 3.0 allows you to expand your network globally using a single URL. Consequently, the possibilities for service development and the range of transactions surpass those of Web 2.0.

Enhanced Transparency

In blockchain technology, all transactions conducted within a particular node are publicly accessible. In the case of a public blockchain, which includes projects involving virtual currencies that allow anyone to participate in transactions, an unlimited number of participants can view the data. For consortium chains formed by select members, like unions and corporate federations, or private chains established within organizations such as companies, the limited members have continuous access to the data. This high level of transparency serves as a strong deterrent against fraudulent activities, as they can be identified and prevented more effectively.

High Level of Security

Blockchain technology itself boasts a strong and robust security framework, making the risk of hacking exceptionally low. This security is upheld through the implementation of various anti-counterfeiting and encryption technologies such as hash functions, public key cryptography, and electronic signatures.

Blockchain has become closely associated with virtual currencies, and due to notable hacking incidents, some individuals may hold skepticism towards its security. However, it’s important to note that most fraudulent activities occur within virtual currency exchanges, which do not operate on a blockchain system. Hacking incidents typically transpire in situations where there is a service company acting as an intermediary, matching buyers and sellers based on their desired transaction amounts. Alternatively, attacks often target bridge systems used for currency exchange. These cases, however, are not representative of the inherent security of the blockchain technology itself.

Freedom of Expression

Through the use of Non-Fungible Tokens (NFTs), digital content such as images, videos, music, and text can be traded on the blockchain. In the era of Web 2.0, it has been common to rely on platform providers to access and share content. However, blockchain technology enables users to directly exchange content with one another, eliminating the need for intermediaries. As a result, concerns regarding restrictions or limitations on freedom of expression that may arise from centralized platforms should be mitigated.

Increased Opportunities for Creators

In the realm of Web 3.0, we anticipate a rise in opportunities for creators, including designers, musicians, artists, and composers, to gain recognition. By crafting compelling and captivating works, creators may receive direct offers from individuals worldwide or secure contracts without intermediaries. In traditional setups where creators are affiliated with companies or employ matching services, a portion of their rewards is often deducted. However, through blockchain technology, creators can retain the full amount of their earnings since transactions occur directly, allowing them to achieve both financial success and creative independence simultaneously.

Universal Ownership of Assets

By utilizing smart contracts, various decentralized applications (DApps) can be developed, one of which is known as a “DEX” or distributed exchange. A DEX enables individuals to trade virtual currencies without the need to verify their identity.

Conventional virtual currency exchanges primarily operate as centralized exchanges, referred to as CEX. Transactions on CEX platforms are facilitated through administrators, requiring fees and the depositing of wallets and private keys with the exchange. In contrast, with DEX, individuals connect their wallets directly to the blockchain and manage their private keys themselves. As a result, even individuals in emerging countries without bank accounts can acquire, buy, and sell virtual currencies on DEX platforms. They can also utilize DeFi (decentralized finance) services to access a range of financial services and build their assets.

This shift towards DEX platforms and DeFi opens up opportunities for widespread ownership of assets, providing financial inclusion to individuals who were previously excluded from traditional banking systems.

What You Can Do With Web 3.0

Now let’s take a closer look at what you can do with Web 3.0.

Traceability

Blockchain facilitates traceability in the manufacturing and logistics sectors. For instance, it enables the comprehensive management of process data across various stages, ranging from food and pharmaceutical production to transportation and sales. This allows for quick and accurate identification of the specific process that encountered issues, such as contamination or product defects. By focusing on the affected products and their sources, the damage can be minimized, and food waste can be reduced.

As time goes on, there is an increasing demand from business partners and stakeholders for effective management of manufacturing processes and product liability. With the widespread adoption of blockchain-based traceability in Web 3.0, there is an expectation that industries will witness improved quality control measures. This, in turn, will contribute to the establishment of safer and more secure supply chains.

Manage and Share Medical Data and Transcripts

Blockchain makes it possible to manage and share medical data such as an individual’s health status, medical history, treatment history, and medication history. If this data can be shared with medical institutions and pharmacies, it will be very useful when the patient is in need of emergency surgery and cannot dictate his or her chronic illness or medication history, or when a pharmacist wants to confirm whether or not to drink together.

Blockchain is also very suitable for managing and sharing documents that require accurate data management, such as university transcripts, and that do not allow the contents to be changed after entering the data.

DeFi

Web 3.0 uses smart contracts. DeFi (decentralized finance) is also attracting a lot of attention. In addition to remittance and settlement, it will be possible to automatically execute all functions, such as lending of virtual currency and insurance services, without human intervention. When you use financial services at banks and brokerages, you have to pay considerable fees. In that respect, DeFi has a great advantage because it can be used for free or very cheaply.

NFT

Through the use of smart contracts, digital content such as images, videos, music, and text messages can be tokenized and distributed as Non-Fungible Tokens (NFTs). NFTs provide a way to establish ownership and uniqueness for digital content that was previously easily duplicated. Furthermore, smart contracts can enable secondary usage rights, ensuring that the original creator receives a percentage of the sales proceeds each time the NFT is sold.

We can already see numerous examples of famous sports teams, luxury brands, idols, and artists from around the world selling images, videos, and trading cards as NFTs. Some of these NFTs have been traded for incredibly high prices, reaching millions of units, and the potential for growth in this field is immense.

Moreover, NFTs have a strong connection to the concept of the Metaverse, where virtual worlds and experiences merge with reality. Services that allow the trading of virtual paintings displayed in virtual buildings and galleries as NFTs are also expanding in popularity and reach.

Blockchain Game

Blockchain Game is a game that uses its own tokens and NFTs. Players can purchase NFT characters and items with virtual currency and get virtual currency as a reward when they clear a stage or win a battle. Moreover, NFTs used in the game can be bought and sold at any time. In other words, blockchain has realized an epoch-making system that has not existed in the conventional game industry, where rewards can be obtained while enjoying the game. This earning while playing is called “GameFi” or “Play to Earn”. As we will introduce later in “Specific Use Cases of Web 3.0” various blockchain games have already appeared in Japan and overseas.

DAO

DAO, which stands for “Decentralized Autonomous Organization,” refers to a type of organization that operates on the principles of decentralization and automation. In fact, the aforementioned DEX (Distributed Exchange) can be considered a form of DAO, where transactions are executed automatically on the blockchain using smart contracts. DAOs enable various functions to be carried out automatically without the need for direct human interaction, such as fundraising, work ordering, and project management.

Participants in a DAO acquire tokens specific to that organization and exercise their voting rights based on their token holdings to make decisions regarding projects and operations. In a DAO, there is no centralized manager or hierarchical structure with superiors and subordinates. Instead, decision-making and governance are decentralized, allowing all participants to have a say and contribute to the organization’s direction.

One significant difference between DAOs and traditional organizations is the ability to trade and operate continuously, 24 hours a day, 365 days a year. This non-stop operation is made possible by the automated and decentralized nature of DAOs, setting them apart from traditional organizational structures.

Read more: Pros and cons of DAO – Next-generation organization

Distributed Computing (Edge Computing)

Providing data and services online is the main purpose of edge computing. Edge computing can occur when centralized computers have trouble processing “big data.” For example, data may be processed on a local PC and then sent to a central site for aggregation. Distributed computing, or edge computing, combines the processing power of devices at the edge of a network to create a large distributed supercomputer.

Machine learning and Artificial Intelligence

Natural Language Processing (NLP) enables you to communicate with intelligent systems that comprehend your needs and requests. By utilizing machine learning techniques, vast quantities of data can be analyzed in real-time to anticipate customer preferences and actions. Smart, interconnected devices powered by the Internet of Things (IoT) are ubiquitous, providing businesses with the capability to gather data and convert it into valuable insights for informing their strategic decisions.

Latest Trends of Web 3.0 in 2023

The first thing that should be noted as the latest trend of Web 3.0 is the rise of “BaaS (Blockchain as a Service)”. BaaS is a service that allows you to build blockchain applications on the cloud, and using this eliminates the need to develop a blockchain from scratch. Blockchain development time can be greatly reduced by virtue of the simplified construction process.

One example of this is OASYS, a game-specific blockchain launched in December 2022. It is a platform for developing blockchain games developed in cooperation with the heads of major domestic game companies. As a result, the hurdles of blockchain game development, which traditionally required a huge amount of time and money, have been greatly lowered.

We cannot talk without mentioning, efforts to fuse AI and blockchain are also progressing at a rapid pace in various fields. For example, an image generated by AI can be made into an NFT, and even its copyright can be managed by a blockchain.

Since the beginning of 2023, the utility of blockchain technology has gained widespread recognition across various industries, leading to a significant increase in the development and implementation of new services. This trend is expected to continue growing, fueling higher expectations for the potential of Web 3.0.

Summary

Blockchain, the main player in Web 3.0, is a decentralized system that is transparent, non-tamperable, and highly secure, and does not require an administrator. Its applications are expanding to include manufacturing, finance, logistics/trade, games/entertainment, arts, and sports. The fusion of the latest technologies, such as AI and IoT, and big data has ample potential for further innovation. If you want to ride this trend and surely evolve and develop in the future, it will be important to embark on blockchain development as soon as possible.

Relipa provides extensive support for blockchain development in Web 3.0. We have a large number of excellent engineers and staff who can fully meet the needs of our clients, such as blockchain games, NFTs, DAOs, and DeFi. Please feel free to contact us for any requirements.