The term Web3 is often used as a shorthand for discussing the new phase of the Internet. It describes the transition from the era of centralized social networks and mass e-commerce platforms to a utopia of user-controlled data. Web3, colloquially, is just a generic marketing term for anything related to cryptography.
To bring clarity to this topic, the research team has released a new report detailing the nature of the real Web3. These key insights are invaluable for investors to understand in order to separate facts from fundamental misconceptions.
Blockchain network and decentralized network
Research’s “Web3: Marketing Noise or Tech Revolution?” makes a clear distinction between a “blockchain network,” which is the integration of blockchain technology into a network, and a decentralized, permissionless, trustless alternative to the Internet known as a “decentralized network.”
Download this free report on the research terminal.
The blockchain network has fueled the growth of ecosystems of non-fungible tokens, decentralized autonomous organizations (DAOs), and GameFi that veterans of the cryptoverse will know about. Ideally, there is no central authority in these ecosystems, and value is created through the creation of scarce digital assets. The report explores how these ecosystems can infiltrate the real world with the help of blockchain technology and improve the efficiency of traditional industries.
The decentralized web aims to break the oligopoly of content delivery websites in today’s Web2 world. This goal is achieved by creating a new network based on the principle of decentralization, without permission (everyone can participate) and without trust (the code is so reliable that it eliminates the need for third-party authorities).
Are we already there? No.
There is a long way to go regarding the implementation of the idealistic principles of decentralization in both the blockchain network and the decentralized network.
A blockchain network built on top of an existing internet infrastructure requires hosting services for communication between users and applications. Unfortunately, 60% of all these nodes in Ethereum are hosted on Amazon Web Services. This gives one centralized authority the power to shut down most of the entire blockchain network. The report shows how even DAOs face the challenge of consolidating voting power for a small group of whales, coupled with low levels of user participation.
The decentralized web, unfortunately, is not much better, but there is reason for optimism. At present, due to monopolies such as Google, Amazon, Meta, Apple, Microsoft, and Tencent, there is very little decentralization when users go online. However, alternatives using technologies such as distributed hash tables allow the creation of decentralized versions of popular applications.
The research department of includes some of the best specialists in the blockchain industry. Combining academic rigor and filtered practical, hard-won experience, the researchers on the team strive to provide the most accurate and insightful content available on the market.
Demelza Hayes, PhD, is director of research at . Hayes has assembled a team of subject matter experts from across finance, economics and technology to bring to market the premier source of industry reporting and in-depth analysis. The team uses APIs from various sources to provide accurate and useful information and analysis.
The opinions expressed in this article are for general informational purposes only and are not intended to provide specific advice or recommendations to any person or any particular security or investment product.