There are different terms that we have heard about in the cryptocurrency market and on the internet. Web 3.0, NFTs, Metaverse, Soulbound tokens, Web5, and many others. It seems that every single day new complicated and sometimes confusing terms appear without giving us the possibility to get into the details of each of them.
Jack Dorsey’s Bitcoin venture TBD has unveiled a new and surprising proposal to start building the next evolution of the internet: Web5, also known as Web 5.0 or the evolution of Web 3.0. But what is Web5 all about? What is so special about it and what are the differences between Web5 vs Web3? In this guide, we will share with you all the things you should know about the evolution of the internet and how the world moved from Web 2.0 to Web5.
What is Web 2.0?
One of the things that we should first talk about is Web 2.0 or Web2. This would let us better understand how it evolved towards Web3 and eventually Web5. The term Web 2.0 was coined for the first time by Darcy DiNucci in 1999 when talking about the future of the Web.
While Web 1.0 was the beginning of the internet where users could only engage with content in a passive way (reading or viewing) Web 2.0 gave a path to a new way for people on the internet to engage in different activities. For example, rather than simply reading a website, people could comment, give an opinion or interact with those creating content.
This is something that massively expanded thanks to social media networks (Facebook, MySpace and Blogs are just some of the first popular Web 2.0 use cases). This allowed for the whole internet to expand at speeds never seen before. The number of internet users worldwide grew from 1.02 billion in 2005 to 4.9 billion in 2021.
This shows how Web 2.0 was able to help the expansion of the internet, engage people on social media networks and open new opportunities for content creators to share new and incredible things. The internet would have been a much different place without the evolution that represented Web 2.0 over Web 1.0.
Will Web3 Replace Web2?
Taking all these things into consideration, people are now asking whether Web 3.0 would be able to replace Web 2.0. This is a fair question. If we see how Web 2.0 replaced Web 1.0, extrapolating this data would then push us to believe that the same could happen with Web 2.0, that it can be replaced by 3.0 with time.
In order to get a clear understanding of what this process could look like, we first have to know what Web 3.0 is and how it works. Let’s get into the details.
What does Web 3.0 Mean?
We all have heard about blockchain technology, the Metaverse, cryptocurrencies and decentralized finance (DeFi). These are all things that are interconnected and that have one clear link: Web 3.0.
According to Wikipedia, Web3 is the idea of having a World Wide Web that would be based on blockchain, the technology behind virtual currencies such as Bitcoin or Ethereum. Moreover, there is a strong focus on decentralization as well, something similar to how Web 2.0 expanded, without centralized sources of information and with a network of content creators worldwide.
One of the problems of Web 2.0 is that most of the traffic created and generated by content creators was taken by large companies such as Facebook, Instagram, and other social media networks. All the content that creators generate becomes a tool for large companies to sell data to publishers and other companies that want to target certain audiences.
Web 3.0 is then the evolution of Web 2.0 by using blockchain technology and decentralization to give back control to content creators. Some of the benefits of Web3 include more privacy, security, scalability, and decentralization. Despite the growth that we have seen in recent years, it might be necessary for Web 3.0 to continue growing in the coming years before understanding whether it could replace Web 2.0.
Therefore, the answer to the question of whether Web 3.0 would be able to replace Web 2.0 is that this is a possibility but more time would be required for this transition to take place. And this is something that we have also seen with the transition from Web 1.0 to Web 2.0. Despite that, it is worth pointing out that there are some challenges that internet users will have to face that were not present during the transition between Web1 and Web2.
When did Web 3.0 Start?
Web 3.0 started when blockchain technology appeared, even without people, developers and companies knowing what was yet to come. The first time that the term Web3 was used was when the co-founder of Ethereum, the second largest cryptocurrency in the world, Gavin Wood talked about it in 2014.
The creation of Bitcoin in 2009 was also a very important moment for humanity. It was the first time in history that the world saw the creation and expansion of a monetary system that did not require centralized institutions to control it. Proof-of-Work (PoW) and the possibility to deal with the double-spending issue were very important technological advancements that allowed for the unconscious creation of Web 3.0.
Over the last few years and thanks to the continuous growth of virtual currencies and crypto projects, we now have a wide range of solutions that became a key part of Web 3.0. This evolution when it comes to digital assets and the internet as we know it would allow for new solutions to be offered to individuals all around the world. Among these things, we should expect Web5 to be developed as an improvement to Web 3.0.
Why Does Web 3.0 Matter?
Web 3.0 matters, and a lot. As we mentioned before, one of the benefits of Web3 was related to privacy. Privacy enhancements are allowing individuals to own data, information, and the things they create. Compared to Web 2.0 where people were just uploading content to different centralized platforms, it is nowadays possible to earn digital things and prove ownership of these things.
For example, non-fungible tokens are a clear example of this. NFTs, despite the fact that they were popularized with CryptoKitties and memes, are a clear example of how virtual things and objects can exist without the need of relying on centralized networks or parties.
From storing our identity and information on blockchain networks to saving documents and public data. These are some of the most important things that Web 3.0 has brought to the internet community around the world. There are different platforms that can be used and many other features that can be leveraged thanks to the expansion of distributed ledger technology (DLT).
With censorship becoming a more common thing in Web 2.0 infrastructure, Web 3.0 is becoming increasingly popular and useful in to fight against these threats. Nowadays, we have Web 3.0 and Web 2.0 interacting one with another, but there could be a transition to Web3 in the coming years.
How is Web3 Shaping the Future of Finance?
Cryptocurrencies are just one of the many examples of how Web3 could give ownership to people. A clear example of how Web3 is shaping the future of finance is through digital currencies and decentralized platforms that allow for the transfer of financial data and information.
We were used to centralized exchanges where people could trade digital currencies in a very efficient way. It was possible to buy and sell Bitcoin and other virtual currencies, but everything in a Web 2.0 standard. The coins that you deposited in these platforms become protected by the exchange, therefore, this represents a very large risk for crypto holders.
Instead, thanks to blockchain technology and decentralized exchanges, it is possible to interact with different financial protocols and get access to unique financial services without a centralized third party getting involved and controlling the interactions. Users can nowadays lend and borrow funds, among other things, thanks to Web3 and its impact on the financial market.
Despite that, there are still some inefficiencies that would be very important to address in the future. But this is a transition period from Web 2.0 towards Web 3.0, which might take time.
What is Web 5.0 (Web5)?
Jack Dorsey’s TBD crypto venture recently announced the creation of Web5 or Web 5.0. As they explain on their official site, the goal is to build an extra decentralized web that puts you in control of your data and identity. That’s quite similar to what Web3 was offering and promoting.
The official site reads as follows:
“The web democratized the exchange of information, but it’s missing a key layer: identity. We struggle to secure personal data with hundreds of accounts and passwords we can’t remember. On the web today, identity and personal data have become the property of third parties.
Web5 brings decentralized identity and data storage to your applications. It lets devs focus on creating delightful user experiences, while returning ownership of data and identity to individuals.”
Web5’s goal is to create a unique set of tools based on Bitcoin that would change the financial system as we know it today. This would not only allow investors and individuals to protect and own their data, but they would also keep control over all their interactions.
One of the main criticisms of Web5 to Web3 is that Web 3.0 platforms are usually more centralized about what people think, despite the marketing efforts to show that differently. Jack Dorsey explained that Web 3.0 systems are based on a single point of failure systems, mentioning Solana (SOL) and Ethereum (ETH).
Therefore, a system based on Bitcoin’s decentralized nature and lack of single points of failure could be more suitable for the ideas promoted by Web 3.0 supporters.
The pillars of Web5 include self-owned identifiers that enable decentralized identity authentication and routing, verifiable credentials as data formats and models for cryptographic presentation and verification of claims, and decentralized web nodes (data storage and message relay nodes).
Will Web 5.0 Replace Web 3.0?
It is too early to think about Web5 replacing Web 3.0. Indeed, this might be something that could take a long time before we are able to see the real effects of what Web5 wants to achieve. At the moment, this is just an idea and a proposal that could definitely be sustained and that could change many of the things we considered “standard,” such as centralized blockchain networks.
But things are changing. There have been many issues that affected the credibility of the cryptocurrency market, including the expansion of projects that promoted decentralized solutions but that ended up being centralized platforms with single points of failure.
We are currently in the transition between Web2 and Web3. It might take some time before we see a move from Web3 to Web5. What could also happen is that Web2 could be split into Web3 and Web5, which would give new opportunities to developers, companies and individuals to decide which type of internet would work better.
Jack Dorsey’s Proposal
As we have already mentioned, Jack Dorsey’s TBD proposal is related to a different approach to how Web3 should behave. Rather than relying on all different types of protocols and possible-centralized blockchain networks, we might be moving towards Web5 based on Bitcoin and its immutability and decentralization.
One of the main characteristics of Web5 is related to Decentralized Identifiers (DIDs) that could rely solely on the Bitcoin blockchain. There is no need to create another network of validators or solutions, everything that’s needed could run on top of Bitcoin.
Therefore, we see that Jack Dorsey’s proposal of Web5 is a real self-sovereignty solution that runs on Bitcoin and relies on it. No additional consensus algorithm or network is necessary.
A Bitcoin-centric Model
Jack Dorsey has always been a strong Bitcoin supporter. He has focused on making Bitcoin the currency of the internet and is now working with TBD in order to create new solutions on top of Bitcoin (Web5). This is just one of the ways in which we could think of Web5: a Bitcoin-centric model that relies only on the largest and most secure network in the world: Bitcoin.
By leveraging Bitcoin’s infrastructure, it might be possible to see a new set of tools and solutions created on top of it that would make Web3 look like an outdated proposal. This innovation comes to the market despite the fact that crypto lovers have attacked Bitcoin due to the lack of flexibility and programmability that it offers.
Nevertheless, Jack Dorsey and its team have embarked on a journey that involves making Bitcoin the standard and relying on it as one of the most important things for humans to become self-sovereign.