It wasn’t long ago that crypto was referred to as just that: crypto. For those wanting a more technical-sounding slant, there was a broader phrase: blockchain technology. And, prior to all this, there was simply, in the very early era, Bitcoin. If you follow crypto developments nowadays, though, you’ll find growing references to an altogether newer term: web3.
A straightforward description of web3 is that it’s a version of the web that allows for reading content (as began in the early days of web1), creating content (which is where we are now, in web2), but also, where web3 is different: owning content.
That third section, ownership of your own content, along with the ability to transact peer-to-peer through decentralized mechanisms, is what most technically distinguishes web3. These facilities are enabled by blockchains, and so web3 is interlinked with cryptocurrencies. However, a cynical perspective might suggest that the term web3 is simply being used to allude to crypto through a less loaded, more mainstream-friendly term.
There may be some truth to that latter assessment, while it’s also the case that calling web3 a read/write/own version of the web doesn’t fully capture the nuance and character of web3 and its ambitions. There are also suggestions that web3 is no more than a vaguely on-trend buzzword, so it’s worth considering the substance of web3, and whether it’s really ushering in any significant changes.
Distinguishing Crypto Functions
One reason to sometimes refer to web3, rather than to crypto, even though we might be referencing the exact same blockchains and protocols, is because blockchain networks can serve multiple functions.
Talk about crypto, and you bring to mind decentralized digital coins, which relate explicitly to money. Most notably, of course, there is Bitcoin, and then there’s also the world of decentralized finance, in which the leading blockchain is Ethereum.
However, if an organization, from a major brand to an indie art community, utilizes Ethereum as a means to distribute collectibles, artwork or membership passes, it makes more sense to talk about web3 activities. What such projects do is social, commercial or cultural, and isn’t primarily connected to currency or finance.
Web3, then, refers to a much wider categorization than the term crypto, representing everything that blockchains can do outside of their original, and still critically important money-oriented ambitions.
This is why…
