Home CryptocurrencyAltcoin Separating Web3 fact from fiction: A report

Separating Web3 fact from fiction: A report

by SuperiorInvest

The term Web3 is often used as a shorthand to discuss the new phase of the Internet. It describes leaving the era of centralized social media and massive e-commerce platforms and reaching a user-driven data utopia. Web3, in a colloquial sense, is simply an umbrella marketing term for anything cryptocurrency-adjacent.

To shed some light on this topic, the Cointelegraph Research team has released a new report detailing the nature of the real Web3. These key insights are invaluable for investors to understand in order to separate the facts from the underlying misconceptions.

Blockchain web and decentralized web

Cointelegraph Research’s “Web3: Marketing Buzz or Tech Revolution?” makes a clear distinction between the “Blockchain Web,” which is the integration of blockchain technology into the Web, and the decentralized, permissionless, and untrusted alternative to the Internet known as the “Decentralized Web.”

Download this free Cointelegraph Research Terminal report.

The blockchain web has fueled the growth of the non-fungible token, decentralized autonomous organization (DAO) and GameFi ecosystems that crypto veterans will be aware of. Ideally, these ecosystems lack a central authority and value is derived from the creation of scarce digital assets. The report reveals how, using blockchain technology, these ecosystems can spill over into the real world and bring new efficiencies to traditional industries.

The Decentralized Web seeks to break the oligopoly of content delivery websites in today’s Web2 world. This goal is achieved by building the new website on the principle of decentralization by being permissionless (anyone can participate) and trustworthy (the code is so robust that it removes the need for third-party authorities).

Are we there yet? No.

There is still a long way to go when it comes to implementing the idealistic principles of decentralization in both the blockchain web and the decentralized web.

A blockchain website, which is built on the current internet infrastructure, requires hosting services in order to communicate between users and applications. Unfortunately, 60% of all these Ethereum nodes are hosted on Amazon Web Services. This gives one centralized authority the power to shut down most of the entire blockchain web. The report shows how even DAOs run into the problem of small groups of whales consolidating voting rights along with low user participation.

Unfortunately, the decentralized web isn’t much better, but there is reason for optimism. Currently, beset by monopolies such as Google, Amazon, Meta, Apple, Microsoft and Tencent, there is very little possibility of decentralization when users go online. However, alternatives using technologies such as distributed hash tables are beginning to allow the creation of decentralized versions of popular applications.

Cointelegraph Research Team

Cointelegraph Research Department includes some of the best talent in the blockchain industry. Combining academic rigor and filtering through practical, hard-won experience, the researchers on the team are committed to delivering the most accurate and understandable content available on the market.

Demelza Hays, Ph.D., is the Director of Research at Cointelegraph. Hays has assembled a team of subject matter experts from across finance, economics and technology to bring to market a world-class source of industry news and insightful analysis. The team uses APIs from various sources to provide accurate, actionable information and analysis.

The opinions expressed in this article are for general informational purposes only and are not intended to provide specific advice or recommendations for any person or particular security or investment product.

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