How Web3 solves the fundamental problems of Web2

How does Web3 differ from Web2?

Web3 is a decentralized, permissionless and trusted ecosystem that transfers control from a centralized organization to a mass of participants. Web2, on the other hand, is a concentrated space dominated by companies like Google, Microsoft, and others.

Web3 refers to the next generation of the Internet, which is decentralized, which is fundamentally different from Web2, a centralized ecosystem based on a client-server model. In Web2, the back-end code that powers applications is hosted on a server hosted by the likes of Google Cloud or Amazon Web Services (AWS). This system centralizes power, and these conglomerates, collectively called Big Tech, can block access to anyone or exchange sensitive user data for money.

However, Web3’s architecture is designed to remove this undue advantage from Big Tech and decentralize it, promoting transparency, facilitating innovation, and giving users control over their data and online interactions. There is no server or client in Web3. Rather, there is peer-to-peer file sharing thanks to the Interplanetary File System (IPFS).

Web3 applications are permissionless (although some private blockchains require permission) and are not trusted. “Permissibility” refers to the ability for seamless cross-platform and intra-platform communication, while “trustlessness” refers to the feature where users must trust the network and not the network participants. Web2 applications, in contrast, require approval from a centralized authority and user trust to function.

Can Web3 solve Web2’s problems?

Web3 returns content rights to the author, increases security, eliminates unfair censorship, ensures transparency, automates software work, and contributes to the creator economy.

With Web3 features, businesses can take advantage of opportunities beyond imagination. Concepts like decentralization and permissive cyberspace were just science fiction. However, Web3 hopes to solve Web2’s problems, paving the way for a decentralized Internet era.

Data Ownership

Decentralization puts more control in the hands of users, ending 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 cluster of servers or a key decision-maker or individual.

Although several Web2 applications have moved to multi-cloud hosting, the flexibility of truly decentralized projects is simply on another level. Enterprises can choose topography for their application depending on their own data landscape and challenges to solve.

Data security

Data stored in a huge centralized database is quite vulnerable. Hackers only need to break into one system to compromise valuable user data. Insiders often play a role in passing on key information to external malicious actors. Decentralized systems are designed to resist such behavior by a subset of participants, making security in Web3 more effective than Web2 systems in keeping data safe.

Conversely, with almost every company going digital and data-driven, the risk of malicious attacks has also grown exponentially. In such a scenario, vandalism has become a major threat in cyberspace, threatening monetary and reputational loss. Decentralization increases the level of security, if not completely eliminates the problems.

Unfair censorship

Centralized systems often subject users to unfair censorship. Decentralization transfers power to participants, making it harder for any single organization to influence their own narrative. For example, a Web2 social media site like Twitter can censor any tweet anytime it wants. On decentralized Twitter, tweets are not subject to censorship. Similarly, payment services on Web2 may limit payments for certain types of work.

Censorship on Web3 will be difficult for both well-intentioned participants and malicious players. The decentralized web promises control and privacy to all participants. Furthermore, network participants can actively participate in project management by voting.

Financial freedom

In Web3, every participant is a stakeholder. With a variety of technologies that defy control, Web3 promotes financial freedom. Decentralized finance (DeFi), where anyone can freely engage in financial activities, is a prime example of participant independence.

Complying with Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations opens DeFi to new user groups and mass adoption. Furthermore, payments on Web2 are made in fiat, while payments on Web3 are made using cryptocurrencies, although fiat payment systems can also be integrated.


Transparency is something built into the design of decentralized ecosystems. Nodes work in tandem to ensure frictionless operation of the system, and no node can make an individual decision. Even other participants have a role in governance decisions by casting votes.

Related to: What are the signs of control and how do they work?

Web3 transactions are virtually irreversible and traceable, thus eliminating any possibility of anyone making changes to the database after the transaction. This makes Web3 a powerful tool against fraudulent behavior.


Smart contracts automate a system that can operate without human intervention. The code reflects the agreement between the various stakeholders who carry out transactions that cannot be deferred. Smart contracts significantly reduce operational costs, eliminate bias and make transactions more secure.

However, projects should 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 with proven experience in vulnerability assessment using a mix of manual and automated tools. An example of Web3 acceleration automation is Zokyo, which specializes as the end-to-end security resource for blockchain-based projects.

Creative economy

A component of the web3 ecosystem, non-fungible tokens (NFTs) have added another dimension to the web economy. These tokens make each digital asset unique in some way. No matter how many times it is duplicated, there is some way to tell it apart. This feature is useful to protect these assets from online fraud and to preserve the owner’s exclusive rights to their assets. On Web3, NFTs can serve as metaversal assets, game assets, certificates, and more, opening endless possibilities and empowering content creators to monetize in unprecedented ways.

Earlier, when an audience consumed a creator’s content, the audience only benefited emotionally or intellectually. Thanks to NFTs, creators were now able to turn their community members into investors and provide them with some tangible value beyond their interactions. For example, if someone created a group on a decentralized social media site, the first 50 subscribers could be rewarded with redeemable NFTs if they spend a certain amount of time interacting there.

Contrary to popular belief, you don’t need to have technical knowledge to create an NFT-based economy. No-code solutions like NiftyKit are available for various development needs like building NFT smart contracts, revenue sharing, embeddable SDKs (software development kits), token access, etc. Without any coding, one can start building a creative economy.

How Web3 solves interoperability problems

Weaving Web2 with Web3 is as important as intra-Web3 communication to accelerate user acquisition and gain relevance. The Ethereum Virtual Machine (EVM) is an advanced technology that helps address such concerns by facilitating interoperability between blockchains.

Interoperability or “cross-interoperability” is an important feature in computer systems that facilitates the frictionless exchange of data between Web2 and Web3, as well as within Web3 projects. An example of this feature is Twitter in 2022. Release NFT profile pictures for blue (checkmark) Twitter followers on iOS in January. Users can verify ownership of an NFT by linking their Twitter profile to the wallet that holds the NFT. To enable data sharing, as was the case with this Twitter feature, engineers integrate Web2 platforms with Web3.

Intraweb3 communication is also critical to the efficient operation of applications. With the Ethereum blockchain hosting most DApps on Web3, being EVM compatible is an important requirement for any project that needs to be interoperable. EVM works as a smart contract execution environment on the Ethereum blockchain.

Blockchains work in isolation and need solutions like a sidechain to connect to other chains. A sidechain is a blockchain that operates independently of the parent blockchain or mainnet with a two-way bridge. Examples of sidechains are Gnosis Chain (formally xDAI), Polygon PoS, etc.

Related: Polygon blockchain explained: Beginner’s Guide to MATIC

Another sidechain project is the Horizen blockchain, which is building a sidechain that will be fully compatible and interoperable with Ethereum, opening its own wide-loop infrastructure to the wider Ethereum community and enabling businesses to build solutions quickly. They are also exploring the possibility of adding an EVM layer on top of other blockchain frameworks to allow users greater interoperability to take advantage of multiple ecosystems.

What are the challenges of Web3?

For mainstream Web3 adoption, the prevailing challenges must be addressed. These include centralized infrastructure, lack of regulatory clarity and carpet pulling.

Although Web3 is considered decentralized, developers integrate Web3 applications with Web2 protocols to make them work. This creates a scenario where decentralized applications depend on centralized infrastructure to function.

Another major challenge facing Web3 is the lack of regulatory clarity. Blockchain technologies are evolving rapidly and it will take time for regulators to catch up. Lack of regulatory oversight has led to unethical behavior in some projects, as happened in the FTX fiasco.

Carpet dragging is another hurdle that Web3 applications face. This happens when a malicious developer intentionally leaves a window open in the code and later uses it to steal funds earned with cryptocurrencies. Fraudulent individuals breaking through the security is something everyone is wary of with crypto.

So is there a way to boost the security factor in Web3? While Web2 security measures like doing due diligence before investing, not sharing password credentials, and being careful when browsing will help, there are some special methods for Web3. An ideal way to avoid pulling the rug is to study open source code before making a transaction. Wallets that flag the potentially harmful nature of contracts that users interact with can also be a money saver for many.

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