Evolution –
The
"internet" as we know it, based on the TCP/IP protocol, officially
started on January 1, 1983. This is when ARPANET and the Defense Data
Network adopted TCP/IP, enabling different computer networks to communicate
with each other using a standard protocol.
In
1991, the World Wide Web was introduced to the public, marking a
significant milestone in the internet's history. Tim Berners-Lee released
the first website and web browser, making the technology accessible outside of
CERN (The European Organization for Nuclear Research).
Web 1.0, often referred to as the ‘read-only’ web,
emerged in the early 1990s. (1990s- early 2000s) It consisted of static web
pages, where users could only consume information without interactive
functionalities. The internet during this period was largely dominated by news
portals, basic search engines and personal websites.
Web 2.0 revolutionized online engagement in the
early 2000s. Interactive websites, social media platforms, and user-generated
content became the norm. This era introduced centralized platforms such as
Facebook, YouTube, and Twitter, enabling user participation and content sharing
on a massive scale. Data collected from user activity fuelled algorithms that
tailored content and advertisements, leading to a highly personalized, yet
often opaque, online experience. User data became a valuable commodity (Data Monetization),
driving the business models of many Web 2.0 companies.
Web 3.0, often referred to as the ‘decentralized
web’ aims to address the flaws of Web 2.0 by shifting power from centralized
corporations to users. It incorporates blockchain technology, decentralized
protocols and artificial intelligence to create a more autonomous and secure
internet ecosystem.
Web 3.0 vis-à-vis Metaverse-
The terms ‘Metaverse’ and ‘Web 3.0’ are often used
interchangeably, but they represent distinct, though highly related, concepts
that are shaping the future of the internet.
The Metaverse is a persistent, interconnected 3D virtual
universe where users, represented by avatars, can interact with each other,
digital objects, and AI-driven entities in real-time. It's envisioned as an
evolution of the internet where you don't just "browse" content, but
rather inhabit it.
In essence, while the Metaverse is about the immersive 3D virtual spaces and experiences, Web 3.0 is about the underlying architecture and principles that make such a decentralized, user-centric, and truly interoperable Metaverse possible. Web 3.0 can exist without the Metaverse (e.g., decentralized finance applications), but a fully realized, open, and user-owned Metaverse heavily relies on the advancements and philosophy of Web 3.0.
The foundations of Web 3.0-
Those are essentially decentralization through
blockchain and peer-to-peer networks, which shift control from single entities
to users.
Core foundations
·
Decentralization: Instead of data
being stored on servers controlled by a few large companies, it is distributed
across a network of computers (nodes). This is enabled by blockchain technology
and peer-to-peer networks, giving users more control and ownership.
·
Blockchain technology: A
distributed, immutable ledger that provides a secure and transparent record of
transactions and data. (In very short – Preceding block, current block and the
succeeding block linked through hash function constitute the unique blockchain
architecture. Immutability, transparency and security make the blockchain
structure very powerful)
·
Enhanced Data Ownership – Users have
control over their personal data and identity.
· Trustless Transactions – Blockchain technology ensures secure and transparent operations. “Trustless” means that you don't have to trust a third party: a bank, a person, or any intermediary that could operate between you and your cryptocurrency transactions or holdings. Instead, trust is placed in the underlying cryptographic protocols, algorithms, and the decentralized network itself.
Emerging and supporting technologies
·
Semantic web: The vision of a web
where data is given meaning (semantics), allowing machines to understand the
content and perform more sophisticated tasks for users.
·
Interoperability: The ability of
different applications and systems to work together and exchange data
seamlessly, a core goal for the new web.
· Artificial intelligence (AI): Plays a crucial role in creating smarter applications, processing data, and providing AI-based analytics.
Web 3.0 applications -
·
Smart Contracts - Self-executing
contracts with the terms of the agreement directly written into code. They run
on blockchain and automatically enforce the agreement when certain conditions
are met. (And thereby eliminate the need for intermediaries, enabling
trustless transactions)
·
Decentralized Applications (dApps) -
Applications that run on a peer-to-peer network rather than a single server.
They leverage smart contracts and the underlying blockchain for their backend
logic and data storage.
·
Decentralized Finance (DeFi) - DeFi utilizes smart contracts and
cryptocurrencies to automate and manage financial processes, offering services
like lending, borrowing, trading, and more. It allows people, businesses, or
other entities to transact directly with each other without intermediaries
like banks or brokerages, enabling peer-to-peer financial transactions through
smart contracts on a programmable, permissionless blockchain.
·
Cryptocurrencies – They are fungible tokens where each unit is
identical and interchangeable with any other unit. They are easily divisible
and can be exchanged on a one-to-one basis without changing their value. They
are digital assets designed to work as a medium of exchange using cryptography
to secure transactions and control the creation of new units. There are mainly
two types of cryptocurrencies – those based on ‘proof of work’ (like Bitcoin,
Dogecoin) and those based on ‘proof of stake’ (like Ethereum, Solana, Tezos).
·
Non-Fungible Tokens (NFTs): Unique
digital assets whose ownership is recorded on a blockchain. Each NFT is distinct and represents ownership
of a specific item, like digital art, avatars collectibles. They
represent ownership of digital or physical items and play a crucial role in
digital ownership and creator economies within Web 3.0. They are not
interchangeable (i.e. One NFT
cannot be directly swapped for another without considering its unique
characteristics and value). OpenSea, Rarible and Magic Eden are some of the
popular market places for NFTs.
·
Supply Chain Management: Web3
provides transparency and traceability for physical goods, from origin to
consumer. Everledger uses blockchain to create a permanent digital
record for high-value assets (like diamonds and art) to combat counterfeits and
verify ethical sourcing
•
Decentralized autonomous organizations (DAOs)
- Organizations run by code and governed by their members through a
decentralized voting mechanism, often powered by blockchain. DAOs offer a new
model for collective decision-making and resource management. Leveraging the
global shift toward remote work models, some NGOs could be looking at DAO
option in the near future.
Downside -
·
The approximate daily energy consumption
of the Bitcoin blockchain network was around 250 GWh (gigawatt-hours) in
2023 which is slightly more than the annual energy consumption of Finland. As of 2025,
a non-peer-reviewed study by the Cambridge Centre for
Alternative Finance (CCAF) estimated that bitcoin mining represented 0.5%
of global electricity consumption and 0.08% of world greenhouse
gas emissions, comparable to Slovakia's emissions. Naturally, the environmental
impact of bitcoin mining has attracted the attention of
regulators, leading to restrictions in various jurisdictions.
To make it more energy-efficient, many major cryptocurrencies (including Ethereum, Solana, Cardano, Polkadot etc) utilize a Proof of Stake (PoS) consensus mechanism. This mechanism selects validators based on the amount of cryptocurrency they ‘stake’ (lock up as collateral) rather than computational power, making it more energy-efficient than the Proof of Work (PoW) system used by Bitcoin.
·
Scaling in Web 3.0 is uniquely complex
because of the Blockchain Trilemma (a decentralized system can only achieve two
of three key properties at any given time)
•
Decentralization - The network is distributed
among many independent nodes. Making a network faster often requires fewer
nodes, which means sacrificing growth.
•
Security - The network needs to be resistant to
attack, corruption, and collusion. Adding transaction speed can introduce new
attack vectors.
• Scalability - The network can handle a high volume of transactions quickly (high Throughput). Prioritizing speed and low cost often comes at the expense of decentralization or security.
· Regulatory/legal uncertainty (especially for DeFi/NFTs/DAOs) are other challenges.
· User Experience (UX) of Blockchain applications is quite a challenge especially for non-technical users.
Web 3.0 in India –
CERT-In (Indian Computer Emergency Response Team)
is India’s national nodal agency ensuring blockchain platforms in India to
comply with strict cybersecurity and incident-reporting standards, including
rapid notification, regular audits, and robust record-keeping protocols.
Caste and Diploma Certificates: The Maharashtra
government has been issuing blockchain-based caste and diploma certificates to
ensure tamper-proof, instantly verifiable records. This was done initially
through pilot projects, for example, in Gadchiroli district for caste
certificates on the Polygon blockchain.
Property Registration - Blockchain is being used
to store e-registration data for properties, creating a secure, shared ledger
for all stakeholders like buyers, government authorities, and financial
institutions.
Future of Web 3.0 and Metaverse -
Decentralized Finance (DeFi), Supply Chain Management, NFTs
(Avatars) Decentralized Autonomous Organizations (DAOs) could be some of
the hugely popular applications of Blockchain technology in near future. DeFi
applications are moving towards greater efficiency, accessibility, and
regulatory alignment, attracting both retail and institutional users. Many
banks and central banks (e.g., JPMorgan, Bank for International Settlements)
are already exploring and implementing the underlying blockchain technology for
more efficient backend operations, such as faster cross-border payments,
interbank transfers, and trade finance.
A Symbiotic Future -
Industry experts and current trends show that the three
technologies are converging to create a more integrated digital future:
·
AI as a Catalyst: Generative AI acts
as a powerful enabler, providing the tools needed to build more immersive and
dynamic virtual worlds and intelligent decentralized applications (dApps) with
better user experience (UX).
·
Web3 for Trust and Ownership: Web3's
decentralized nature offers solutions to AI's ‘trust deficit’ (e.g., verifying
AI-generated content using blockchain notarization to combat misinformation)
and provides a framework for digital ownership of AI-generated assets via NFTs.
·
Continued Growth Trajectory: Despite
the hype cycle cool-down, investment in Web3 and the metaverse remains robust,
with the market projected to experience significant growth in the coming years
as practical applications mature.
In essence, Web3 and Metaverse remain strategically important despite hype cycles. Generative AI has shifted public attention but is actually an enabler for an integrated digital future in a collaborative technological landscape.
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Prashant Pimpalekar
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