Understanding Web3: How It Works and Everything You Need to Know

The internet we use today didn’t appear overnight. Over the past few decades, it has evolved through distinct stages—from a simple read-only information space to a highly interactive social platform—and now, we’re in a new era called Web3. This article explains each phase in plain language (no jargons) so that even if you’re a complete beginner, you can easily understand what Web3 is all about.

Let’s start by understanding how the term “web3” came about

The History of the Web: Web1.0 and Web2.0

Web1.0 : The “Read-Only” Web

• What It Was:
  In the early days of the internet (roughly from 1991 to 2004), websites were mostly static pages. Think of them as digital brochures or online newspapers—information was there for you to read, but you couldn’t interact much with it (just like you could interact online today and even post pictures, haha)

• Characteristics of web1.0:

  • Static Content: Every page was created by a few experts or companies.

  • Limited Interaction: You could view text and images but couldn’t post comments or share your opinions.

  • Simple Navigation: Users clicked on hyperlinks to jump from one page to another, much like flipping through a book.

Early websites like personal homepages or online directories (imagine a giant online phone book) where you simply looked up information. There were no comments, likes, or user accounts. Companies like AOL and Netscape built these “brochure-like” sites.

Web2.0: The “Read-Write” Web

• What It Changed:
  Around 2004, the internet began to shift from just reading to also allowing you to participate. This phase is called Web2.0—the social web. Now, anyone could create content, share photos, post comments, and even write blogs just like I am doing now haha and you could drop comments (drop some now).

• Characteristics of web2.0:

  • User-Generated Content: Platforms like Facebook, YouTube, and Twitter let you share your thoughts, videos, and photos.

  • Interactivity: Websites became more dynamic; you could comment, “like,” or share posts.

• The Problem with Web2:

  • Centralization: Although millions of people were creating content, a few big companies (the “Big Tech” giants) controlled the platforms and your data. Power (and profit) is in the hands of these few corporations.

  • Privacy risks: Your data can be sold, hacked, or misused.

  • Censorship: Platforms can delete your content or ban accounts.

    E.g posting a photo on Instagram. You “own” the photo, but Instagram decides who sees it, stores your data, and makes money from ads based on your activity.

This is where Web3 comes in—to fix these issues.

Enter Web3: The “Read-Write-Own” Web

What Is Web3?

Web3 is being described as the next phase of the internet—one that goes beyond just reading and writing to give you ownership over your online data and digital assets.

• In Simple Terms:
  Imagine the internet as a huge community library. In Web1.0, the library only allowed you to read books. In Web2.0, you could not only read but also write your own books and share them—though a few big companies controlled the library. In Web3, you don’t just write your book; you also own it and have a say in how the library is run.

• Goals of Web3:

  • Decentralization: Instead of one company controlling your data (like Facebook or Google), You own your data, money, and creations.

  • User Ownership: You keep full control of your information, digital assets, and online identity.

  • Increased Privacy: With no central authority holding all the data, your privacy is better protecte.

How Does Web3 Work?

Blockchain Basics:
At the heart of Web3 is blockchain—a digital ledger that records transactions across many computers. Because no single party owns the ledger, it’s extremely hard to tamper with.

• Tokens & Cryptocurrency: These are like digital money or digital certificates that prove you own something online (for example, digital art or even parts of an online platform).

• Smart Contracts:
  These are self-executing contracts with the rules directly written into code. They run on the blockchain and automatically enforce agreements without needing a middleman.

• Decentralized Applications (dApps):
  Instead of running on a server owned by a big company, dApps run on a network of computers. This means they are often more transparent and resilient against failures or censorship.

• Ownership and Identity:
  With Web3, you typically use a digital wallet to access services. This wallet not only holds your money but also acts as your digital identity, ensuring that when you interact online, you’re recognized as you—and not as a product to be sold.

Breaking Down Advanced Web3 Concepts

Now that you know what Web3 is, let’s explore some of its core ideas in simple terms.

Decentralization

• What It Means:
  Instead of having a single central server or company in charge, the internet is run by many computers spread across the world.

• Why It Matters:
  This reduces the risk of censorship, fraud, and data breaches because no one entity has full control.

Blockchain Technology

• What It Is:
  Think of a blockchain as a notebook that everyone can see and write in, but once something is written, it cannot be erased. Every transaction (e.g., sending money, buying art) is recorded in “blocks” chained together.

  Imagine a transparent, permanent ledger that tracks who owns which digital items—like a certificate of authenticity for digital art.

Cryptocurrencies and Tokens

• Cryptocurrencies:
  Digital money (like Bitcoin or Ethereum) that uses cryptography to secure transactions. They’re used to buy things, invest, or govern platforms. They’re decentralized, meaning no government or bank controls them.

• Tokens:
  These can represent anything from a piece of art (NFTs) to a share in a decentralized platform. They are the currency of Web3 and allow for new economic models.

Smart Contracts

• Simple Explanation:
  Self-executing programs stored on the blockchain. When conditions are met, the contract automatically carries out the agreed-upon action.

• Imagine a vending machine: You put in $2, and it automatically gives you a soda. Smart contracts work similarly—they’re code that self-executes deals without middlemen.

• Example smart contract could automatically pay a freelance writer once their article is approved, without waiting for a middleman.

  Another example is a smart contract programmed to automatically unlock the door of an apartment on payment and returns your deposit if no damage occurs.

Decentralized Applications (dApps)

• How They Differ:
  Traditional apps run on centralized servers (controlled by companies), whereas dApps run on decentralized networks.

• Benefits:
  Increased transparency, security, and user control.

Self-Sovereign Identity

• What It Means:
  You own and control your digital identity instead of relying on big companies (like Google or Facebook) to manage your login credentials.

• Why It’s Important:
  This gives you privacy and control over what personal data you share and with whom.

A Quick Recap

• Web1.0:
  The early internet, where you could only read static pages.

• Web2.0:
  The social web, where you started to create and share content—but big companies controlled most of your data.

• Web3:
  The emerging, decentralized web where you own your data, use cryptocurrencies, and interact with applications that run on blockchain technology.

Why Should You Care About Web3?

Even if you’re not a tech expert, Web3 could affect your daily life in many ways:

• Data Control:
  You may soon be able to decide exactly how and where your personal information is used.

• New Income Opportunities:
  Imagine earning rewards or even actual income just for participating in online communities or sharing your creations.

• Privacy:
  With decentralized systems, your online interactions could become much more private and secure.

As more companies and services start exploring Web3, its impact is likely to grow—changing everything from online shopping to social media, and even how we interact with digital financial services.