What Does Web3 Mean?

Web3 is an iteration of the internet that values decentralized control over data and online transactions.


In the Web3 view of the internet, internet transactions are going to be supported by distributed ledgers instead of by central authorities. This version of the internet is expected to be:

  • Open – Content platforms will be built on open-source software.
  • Distributed – Devices, users and services will be able to interact without authorization from a central authority.
  • Trustless – Zero Trust architectures will extend security to all Internet of Things edge devices.

Another important prediction for Web3 is that users will finally be able to monetize the data they produce. A home owner, for example, would be able sell the metadata their smart TVs collect and earn monthly micropayments issued in cryptocurrency.

Proponents of Web3 believe that traditional business models on the internet will change significantly as data controls become decentralized and distributed data marketplaces gain popularity. Other predictions about Web3 include the following:

  • Organizations of all types will use smart contracts to automate administrative tasks, manage supply chain risk and verify that contracts are being executed according to their terms.
  • Web publishers will request payment when AI researchers web scrape their content.
  • Banks will either use blockchain to improve security or become obsolete.
  • The metaverse will become pervasive in all aspects of everyday life as headsets, smart glasses and controllers improve.
  • Potential attack surfaces will be significantly smaller and difficult to identify.

Techopedia Explains Web3

It’s often said that Web3 combines the best parts of of previous internet generations: the community-governed spirit of Web 1.0 and the interactive, high-engagement nature of Web 2.0.

Web 1.0 = read
Web 2.0 = read/write
Web 3.0 = read/write/own

Iterations of the World Wide Web

Web 1.0 was essentially a bulletin board where people could create read-only text threads. There was a focus on open protocols that were decentralized and community governed. Web 2.0 changed this by adding multi-media and allowing users to interact with websites as if they were applications.

Web 2.0 also introduced engines that allowed non-technical users to search for information using keywords. This was a step forward, but keyword searches don’t always return relevant results.

If a 2.0 user searches for information about an insect called a camaro, for example, it’s likely that search engine results pages (SERPs) will include information about the automobile Chevy Camaro.

In contrast, Web3 search engines will analyze the user’s historical data across multiple blockchain platforms and use artificial intelligence to predict the context of the query context and return information about the insect, not the car.

Web3 Challenges

As Web3 becomes more widely adopted, there is likely to be increased regulatory scrutiny from governments. Laws around data privacy and sovereignty will have to be updated to protect user-owned data.

Ensuring that Web3 technologies and applications comply with existing regulations — while also developing new regulatory frameworks that are appropriate for the decentralized nature of Web3 — is expected to be a significant challenge. Other challenges include the following:

  • Blockchain technology can be slow when tasked with handling large volumes of transactions and latency issues could prevent the technology from being scalable at the enterprise level.
  • Companies and internet service providers will have to make huge investments in edge computing to move computing capacity closer to users.
  • Interoperability standards and protocols will need to be developed to enable real-time communication between different blockchain systems.
  • Non-technical users will need to be taught how to use cryptocurrency and other Web3 technologies.

Web3 vs. Web 3.0

The terms Web3 and Web 3.0 are often used as synonyms, but they do not always share a common meaning. Web3 (a term coined by Ethereum co-founder Gavin Wood) is used to describe a decentralized ecosystem built on blockchain technology.

In contrast, Web 3.0 is used to describe all the technologies and trends that are expected to shape the future of the internet. They include:

  • Machine learning (ML)
  • Artificial intelligence (AI)
  • Augmented reality (AR)
  • Virtual reality (VR)
  • Generative AI (i.e. ChatGPT)
  • Advanced Networking (i.e. 5G, 6G)
  • Geolocation Services
  • Responsible AI governance frameworks

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Margaret Rouse

Margaret Rouse is an award-winning technical writer and teacher known for her ability to explain complex technical subjects to a non-technical, business audience. Over the past twenty years her explanations have appeared on TechTarget websites and she's been cited as an authority in articles by the New York Times, Time Magazine, USA Today, ZDNet, PC Magazine and Discovery Magazine.Margaret's idea of a fun day is helping IT and business professionals learn to speak each other’s highly specialized languages. If you have a suggestion for a new definition or how to improve a technical explanation, please email Margaret or contact her…