Web3 is a term that refers to the next generation of the internet, where decentralized applications (dApps) run on peer-to-peer networks, without intermediaries or central authorities. Web3 aims to create a more open, fair, and secure web, where users have more control over their own data, identity, and digital assets.
Web3 is powered by blockchain technology, which is a distributed ledger that records transactions and ensures their validity and immutability. Blockchain enables the creation of smart contracts, which are self-executing agreements that can facilitate various transactions and interactions on the web. Blockchain also enables the creation of cryptocurrencies, which are digital tokens that can be used as a medium of exchange or a store of value.
Web3 is expected to disrupt the internet in 2023, by challenging the dominance of the current web giants, such as Google, Facebook, and Amazon. These platforms have amassed huge amounts of data and power, often at the expense of user privacy and security. Web3 promises to offer users more choice, transparency, and sovereignty over their online experience.
Some of the applications of Web3 that are emerging or expanding in 2023 are:
- Decentralized Finance (DeFi): DeFi is a movement that aims to create an alternative financial system that is accessible, inclusive, and transparent. DeFi leverages blockchain and smart contracts to offer various financial services, such as lending, borrowing, trading, investing, and insurance. DeFi enables users to interact directly with each other, without intermediaries or gatekeepers. DeFi has grown rapidly in the past few years, reaching a total value locked (TVL) of over $200 billion in 20221.
- Non-Fungible Tokens (NFTs): NFTs are unique digital assets that can represent anything from art and music to collectibles and gaming items. NFTs are created and traded on blockchain platforms, such as Ethereum and Solana. NFTs enable artists and creators to monetize their work and connect with their fans in new ways. NFTs also enable users to own and display their digital collections in virtual worlds or metaverses. NFTs have exploded in popularity in 2022, generating over $10 billion in sales2.
- Decentralized Social Media (DSM): DSM is a new paradigm of social media that is based on decentralized platforms, such as BitClout and Steemit. DSM empowers users to own their own data and content, and to earn rewards for their contributions. DSM also enables users to create their own communities and governance models, without censorship or manipulation. DSM is gaining traction in 2023, as more users seek alternatives to the traditional social media platforms that have been plagued by scandals and controversies3.
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