What is it?

• The concept of Web3, also called Web 3.0, is used to describe a potential next phase of the internet.
• The model, a decentralised internet to be run on blockchain technology, would be different from the versions in use, Web 1.0 and Web 2.0.
• In web3, users will have ownership stakes in platforms and applications unlike now where tech giants control the platforms.

What is the difference between Web1 and 2?

• Web 1.0 is the world wide web or the internet that was invented in 1989.
• The internet in the Web 1.0 days was mostly static web pages where users would go to a website and then read and interact with the static information. Even though there were e-commerce websites in the initial days it was still a closed environment and the users themselves could not create any content or post reviews on the internet.
• Web 2.0 started in the late 1990s itself though 2004 was when most of its features were fully available. It is still the age of Web 2.0 now.
• The differentiating characteristic of Web 2.0 compared to Web1.0 is that users can create content. They can interact and contribute in the form of comments, registering likes, sharing and uploading their photos or videos and perform other such activities.
• Primarily, a social media kind of interaction is the differentiating trait of Web 2.0.

Need for Web3

• In Web 2.0, most of the data in the internet and the internet traffic are owned or handled by very few companies. This has created issues related to data privacy, data security and abuse of such data.
• There is a sense of disappointment that the original purpose of the internet has been distorted. It is in this context that Web3 is significant.

How does it function?

• Web3 will deliver a decentralized and fair internet where users control their own data. 
• Currently if a seller has to make a business to the buyer, both the buyer and seller need to be registered on a “shop” or “platform” like Amazon or ebay or any such e-commerce portal. What this “platform” currently does is that it authenticates that the buyer and seller are genuine parties for the transaction.
• Web3 tries to remove the role of the “platform”. For the buyer to be authenticated, the usual proofs aided by block chain technology will be used. The same goes for the seller. With block chain, the time and place of transaction are recorded permanently. Thus, Web3 enables peer to peer (seller to buyer) transactions by eliminating the role of the intermediary. This concept can be extended to other transactions also.
• The spirit of Web3 is Decentralized Autonomous Organization (DAO) which is that all the business rules and governing rules in any transaction are transparently available for anyone to see and software will be written conforming to these rules. Crypto-currency and block chain are technologies that follow the DAO principle. With DAO, there is no need for a central authority to authenticate or validate.

Concerns

• From a technology perspective, Web3 will require deviation from the current digital architecture.
• Another concern is that web3 is built on blockchain, which can sometimes be very energy-intensive, contributing to carbon emissions and climate change.

Why in News?

• As per a recent survey released by NASSCOM (non-governmental trade association and advocacy group), Web3 is potentially growing in terms of providing jobs to almost 11 percent of the world’s web3 talent.
• This makes India the third largest in the workforce segment in web3.
• India’s rapid adoption of new-age technologies, its growing startup ecosystem, and large-scale digitally skilled talent potential is cementing the country’s position in the global Web3 landscape.

Reference:

https://www.businessinsider.com/personal-finance/what-is-web3?IR=T