Recently, Web3 has suddenly become a hot topic. Leaders from the traditional technology industry and the emerging blockchain industry have participated in this discussion with their different perspectives on the history and future of the Internet.

Before discussing Web3 in detail, let's take a quick look back at how the concept has evolved.

The concept of "Web 3.0" was originally proposed by Tim Berners-Lee, the inventor of HTTP, during the Internet bubble period. It refers to an integrated communication framework, and Internet data can be machine-readable across various applications and systems. Web 3.0 is also commonly referred to as the "Semantic Web".

In 2014, Gavin Wood, the co-founder of Ethereum, published an article titled "DApps: What is Web 3.0” blog post redefines the term proposed by Berner-Lee to refer to a blockchain technology that enables “innovative interaction patterns between parties” based on “trustless interactive systems.”

The focus of Gavin Wood's article is not encrypted assets, but protocols and technologies such as consensus engines and cryptography. These protocols and technologies enable stronger networked social contracts. He later elaborated on the ultimate goal of Web3, which is "less trust, more facts".

Now, many people have different opinions on this concept. Traditional technology companies and emerging blockchain industries are constantly thinking about what the core value proposition and protocol of Web3 are, and what impact it will have on the future trust model.

This article will define Web3 based on the development history of the Internet, introduce the key technologies of the Web3 technology stack in detail, and discuss the current and future development of Web3.

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The History of the Internet: From Web 1.0 to Web 2.0 to Web3

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Web 1.0（1994-2004）

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ARPANET in 1967. Each node in the graph is a computer node at UC Berkeley, Stanford, UCLA, University of Michigan, Carnegie Mellon, or MIT.

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The pizza ordering page of Web 1.0. Pizza Hut is an innovative company in the Web 1.0 era. They released their own website, where consumers can buy pizza, but the payment can only be done offline.

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An early ad for America Online (AOL), one of the first portals, sending millions of users a CD of their software with 10 free hours of use.

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Web 2.0 (2004-present)

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The MySpace homepage of early Web 2.0 company MySpace founder Tom Anderson. All users who have registered Myspace accounts will automatically add Tom as their first friend.

Users' demand for social attributes has also given birth to many Internet companies today. Social media platforms such as Facebook, MySpace, and Twitter provide users with social functions; data sharing software such as Naspter meets users' needs for music and videos; Google provides shortcuts for users to search massive Internet information. Traditional institutions such as Bank of America meet users' payment transactions and electronic transfer needs, and adopt new encryption standards such as 256-bit AES.

This new, more interactive Internet experience brings many new features to users and enhances the user experience. But the problem also came along, and it has not been completely solved until today, that is: if users want to use these new functions, they must authorize a centralized third-party platform to manage a large amount of data. These centralized entities are therefore endowed with enormous power and influence over data and content rights.

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Web3 (after 2008)

In 2008, Satoshi Nakamoto publishedBitcoin White Paperblockchain technologyblockchain technologyThe core foundation of the Internet and invented the peer-to-peer digital currency, which set off a wave of reform in Web 2.0. Bitcoin revolutionized our notion of digital transactions and, for the first time, proposed a mode of secure online transactions without a trusted intermediary. Satoshi Nakamoto wrote: "Electronic payment systems need to be based on cryptographic proof, not trust."

smart contractsmart contractAfter being invented, the decentralized Internet model really entered the public eye. If Bitcoin enables peer-to-peer payments, and smart contracts extend the concept of programmable protocols to enable more advanced use cases such as insurance, gaming, identity management, and supply chain, how will all this affect the Internet user experience and digital interaction? Smart contract users can interact directly and securely, thus creating a new Internet that is fairer, more transparent, and based on cryptographic facts.

Gavin Wood calls this upgraded version of the Internet "Web3", which means "a secure system run by society".

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The core elements of Web3: blockchain, encrypted assets, smart contracts and oracles

OracleOracleblockchain

blockchain

blockchainencrypted assets

encrypted assets

Encrypted assets are digital tokens that utilize a decentralized and tamper-proof blockchain network environment to fully guarantee the security of transactions. Encrypted assets are the native currency of Web3 decentralized applications (dApps), and can also be used to pay for Web3 services and participate in Web3 governance.

Before the advent of blockchain technology, tokens often referred to units of value used to purchase and trade products or services, such as passes for highway tollbooths, tickets for amusement parks, and game tokens. In these early use cases, service providers issue tokens that allow users to directly pay for services in advance.

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smart contract

smart contractIt is an immutable program on the blockchain that uses the code logic of "if x is true, then execute y" to automatically execute transactions. Programmable smart contracts can create decentralized applications, or "dApps." Decentralized applications are protocols based on the encryption economy, laying the foundation for the development of Web3 and delivering Web3 to users.

Unlike Web 2.0 applications and Web 1.0 static HTML pages, dApps are not run by any one person or organization, but by a decentralized blockchain network. Decentralized applications may seem simple, but they can createPeer-to-Peer Financial Services (DeFi)、as well asas well asP2E gameOracle

Oracle

OracleOracleIt can connect the blockchain to data and systems in the real world, and provide key infrastructure to create an interoperable and unified Web3 ecosystem.

andverifiable random numberanddecentralized executionCross-Chain Interoperability Protocol (CCIP)Cross-Chain Interoperability Protocol (CCIP)With the continuous development, the oracle network will connect various fast-growing blockchain ecosystems and L2 expansion solutions to enable them to interact safely.

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Application of Web3

Web3 is both decentralized and interactive, creating a brand new Internet model. In it, users can interact directly, bypassing intermediaries. dApp users can access financial instruments without permission, trade encrypted assets in a peer-to-peer manner, obtain parametric insurance claims, trade digital artwork with verifiable ownership through NFT, and make money in games. All of these activities can be carried out directly, bypassing the intermediary completely.

ExampleExamplereal estatereal estatefinancefinancedecentralized finance

decentralized finance

Decentralized Finance (DeFi)Decentralized Finance (DeFi)。

Different from traditional financial services, DeFi protocols utilize decentralized blockchain infrastructure and secure data input from oracles to help users trade directly in a transparent and tamper-proof on-chain market. useDecentralized Money MarketAave gives an example: Aave has integrated Chainlink oracles to secure more than $12 billion in value for smart contracts. The protocol adopts a non-custodial model, and its users can borrow and lend peer-to-peer. Currency markets are a key pillar of a healthy economy. The currency market on the chain decentralizes control rights and utilizes predefined smart contract logic, which can reduce the participation threshold and the risk of single point failure, and avoid systemic risks and insufficient reserves.

ComposabilityComposability. Developers can combine different open source protocols into a more complex financial tool, such as using the over-collateralized loan protocol to create a non-destructive savings game, develop a decentralized stablecoin, and revitalize idle funds to generate interest income.

NFTs, Games, and the Metaverse

NFTs, Games, and the Metaverse

NFTmetaversemetaverseIt is a sudden force in the Web3 ecology. NFT provides verifiable ownership of digital assets, allowing these digital goods to have the same uniqueness as physical assets. With NFT, digital assets can be distinguished from each other even if they look exactly the same, just like two identical books in the real world can be distinguished by their own unique marks and wear marks.

This means a lot for digital artwork, metaverse apps, and games. at present,Bored Ape Yacht Club（BAYC）and other NFT projects are constantly promoting NFT and digital artwork; andAxie InfinitySmart Contract Automationverifiable random number、Smart Contract Automationparametric insurance

parametric insurance

decentralizedparametric insuranceis another interesting use case for blockchain. Arbol andEtheriscAnd other blockchain insurance projects are currently adopting an innovative model, connecting smart contracts to off-chain data through Chainlink Data Feeds, and providing users with various innovative insurance products such as automated crop insurance and flight insurance. Let's look at a case:

Assume that the rainfall in a given season must exceed 20 inches to ensure that the crops do not fail. A farmer wishes to purchase insurance to hedge against the adverse effects of severe weather. Typically, he has to go through a lengthy claims process and rely on centralized insurance agencies to verify rainfall.

However, in the Web3 world, no matter where you are, as long as you have access to the Internet, you can easily buy insurance. With Arbol’s on-chain crop insurance, premiums and compensation amounts are automatically generated based on predefined parameters, and compensation is automatically paid through insurance smart contracts based on weather data provided by Chainlink. As a result, the insurance process can be very efficient and fast, based on simple binary logic to determine whether a farmer should get a claim or not. Are IoT sensors recording less than 20 inches of rainfall during the season? If yes, then immediately pay compensation to farmers. If not, no compensation will be paid to the farmer.

This pattern can also be applied toShipping insurancefirst level title

How will the future of Web3 develop?

Chainlink co-founder Sergey Nazarov recentlyA speech on the future development of Chainlinkimage description

As everyone gradually realizes the power of encryption technology, they will abandon the lack of certainty centralized service providers and embrace trust-minimized Web3 services.

The term Web3 actually refers to a new type of internet experience based on decentralized technologies. And Web3 has begun to disrupt the way we interact in various fields such as investment, trading, games and art. More and more users and organizations around the world have begun to realize how important trustless interactions and protocols based on encryption technology are. While Web3 is still in its infancy, it has the potential to restore the internet to what its original designers intended it to be: fully transparent, reliable, and easy to use. Sergey said in his speech: "Web3 will gradually catch up with Web 2.0 systems in terms of speed, efficiency and cost, and it also has the advantage that Web 2.0 does not have, that is, trust-minimized encryption guarantee."

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