How Web3 solves fundamental problems in Web2

Web3 returns content rights to the author, improves the level of security, eliminates unfair censorship, ushers in transparency, automates the operation of software, and facilitates a creative economy.

Thanks to the features of Web3, companies can seize opportunities that are beyond imagination. Concepts like decentralization and the permissionless cybersphere were only in science fiction. Nonetheless, Web3 hopes to solve Web2’s problems, paving the way for a decentralized era on the Internet.

Data Ownership

Decentralization puts more control in the hands of users, breaking Big Tech’s monopoly. Users can decide whether they want to share their data or keep it private. The fact that computing power and decision-making are diversified makes the system inherently more stable than centralized systems where the entire operation depends on a group of servers or a central decision-making entity or person.

While several Web2 applications have moved towards multi-cloud hosting, the resiliency of projects that are decentralized in real terms is just on another level. Companies can select a topography for their application, based on their own data landscape and the challenges to be addressed.

data security

Data stored in a huge centralized database is quite vulnerable. Hackers need to traverse a single system to compromise valuable user data. Often, insiders play a role in delivering key information to external malicious players. Decentralized systems are designed to be resistant to such behavior on the part of a part of the participants, which makes security in Web3 more efficient than Web2 systems in maintaining data security.

On the contrary, when almost all companies are going digital and data-driven, the risk of malicious attacks has also increased exponentially. In such a scenario, cyberspace vandalism has become a huge threat, threatening monetary and reputational losses. Decentralization improves the level of security, if not eliminates the problems altogether.

unfair censorship

Centralized systems often subject users to unfair censorship. Decentralization transfers authority to the participants, making it more difficult for a single entity to influence a narrative that doesn’t suit them. A Web2 social networking site like Twitter, for example, can censor any tweet at any time they want. In a decentralized Twitter, tweets will not be objectionable. Similarly, payment services on Web2 can restrict payments for specific types of work.

On Web3, censorship will be harsh, both for well-intentioned and malicious participants. The decentralized web promises control and privacy to all participants. In addition, network participants can actively participate in the governance of the project by casting votes.

Financial Freedom

In Web3, each participant is a stakeholder. Backed by a series of technologies that are inherently resistant to control, Web3 promotes financial freedom. Decentralized finance (DeFi), where anyone can freely participate in financial activities, is a prime example of the independence that participants enjoy.

Know Your Customer (KYC) and Anti-Money Laundering (AML) compliance opens up DeFi to new user groups and mass adoption. In addition, payments on Web2 are made in fiat currency, while payments on Web3 are made through cryptocurrencies, although fiat payment systems can also be integrated.

Transparency

Transparency is something built into the design of decentralized ecosystems. The nodes work together to ensure the frictionless operation of the system and no single node can make a decision in isolation. Even other participants have a role in making decisions about governance through the casting of votes.

Related: What are governance tokens and how do they work?

Web3 transactions are virtually irreversible and traceable, so any possibility of someone making changes to the database after the transaction is ruled out. This makes Web3 a powerful tool against fraudulent behavior.

Automation

Smart contracts automate the system that can work without human intervention. The code reflects the agreement between various interested parties, executing transactions that cannot be reversed. Smart contracts substantially reduce operating costs, remove bias, and make transactions more secure.

However, projects need to be wary of vulnerabilities in smart contract code that hackers can exploit to steal loot. This can be overcome by having the smart contract code thoroughly audited by a team that has a proven track record in vulnerability assessments using a mix of manual and automated tools. An example of accelerating Web3 automation is Zokyo, which specializes as an end-to-end security resource for blockchain-based projects.

creator economy

Non-fungible tokens (NFTs), a component of the Web3 ecosystem, have added another dimension to the web economy. These tokens make each digital asset unique in some sense. Regardless of the number of times it is duplicated, there is some way to tell it apart. This feature is useful for safeguarding these assets against counterfeiting online and maintaining the owner’s exclusive rights to their assets. On Web3, NFTs could serve as metaverse assets, game assets, certifications, and more, opening up endless possibilities and empowering content creators to earn money in unprecedented ways.

Previously, when audiences consumed a creator’s content, the audience only had the emotional or intellectual benefit. Thanks to NFTs, creators were now able to turn their community members into investors and provide them with tangible value from the interaction. For example, if someone has started a group on a decentralized social networking site, the first 50 subscribers can be rewarded with redeemable NFTs if they spend a certain amount of time interacting there.

Contrary to what many people think, one does not need to have the technical knowledge to create an economy based on NFT. There are no code solutions like NiftyKit available for various development needs such as NFT smart contract creation, revenue splitting, embeddable SDKs (Software Development Kits), token activation and more. Without any coding, one can start building a creative economy.