What is Web 3.0?

The evolution of the internet can currently be divided into three stages. We started off with Web 1.0 which was the earliest version of the Internet. All the sites were read-only which means it was a place where you could consume content.

The first website in the world was launched in August of 1991 and was dedicated to the World Wide Web project itself and was hosted on Berners-Lee's NeXT computer. If you want to see what it looked like, click on this link. This was a static page and offered little in the way of interaction. Content generation was handled by a select few, and information was hard to find.

In October 2004 we saw the introduction of Web 2.0 and the launch of YouTube in 2005. With this, it was now also possible to write, publish and make a contribution. Before long, we were all creating, sharing, and commenting on content instantaneously from the palms of our hands. If Web 1.0 was the read-only iteration, Web 2.0 could be seen as the read/write upgrade, or what we know as the internet today.

If web 1.0 was read-only, 2.0 was read and write, 3.0 is read, write and own. For cryptocurrency developers and enthusiasts, Web 3.0 incorporates the technologies and concepts that are at the heart of crypto: decentralization, token-based economies, and blockchain.

Democratization lies at the heart of web 3.0 because it decentralizes ownership away from the large dominant players into the hands of the network. Who got rich off Facebook? The 3 billion users or Mark Zuckerberg and the shareholders? The answer is clearly the latter. Web 3.0 sees the removal of control from the dominant big data companies and other central authorities and handing it to the masses.

DeFi aims to revolutionize the financial sector, removing the need for central authorities such as banks, payment processors, and other intermediaries. In their place would be a peer-to-peer financial system that lives on the blockchain.

No one loves their bank. In a world where people tattoo brands like Harley Davidson, Netflix, and Apple, why is it that there are no bank logos on body parts? If banks launch a new product, do people call up their friends, arm of a posse of disciples with camping chairs and a basket of sandwiches, and camp overnight outside the branch waiting desperately for it to open so they can storm in and fondle the new service? Do people sneak out of the office early on a Friday, head straight home, storm through the front door, and log into their bank accounts so that they can binge-watch the educational video on internet banking? Do people spend hundreds of dollars on hipster leather biker jackets with their bank logos emblazoned on their backs?

I think not because banking is as enjoyable as sucking on Gandhi's dusty thong. The Millennial Disruption Index reports 71% of millennials would rather go to the dentist than listen to what banks tell them. That is a monumental kick in the nuts of the banks. Millennials would rather lie flat on their backs, open their mouths, and have sharp needles and drills perforate the soft vulnerable skin tissue around their teeth than interact with their banks. You do not need to be Alan Turing (the genius that cracked the German Enigma code) to decipher the takeaway of this nugget of information. Banks suck and technology is going to drive many of them out of business.

Blockchain technology allows us for the first time in modern history to imagine a world without centralized banks. Defi would reduce fees, boost transaction speeds and allocate capital more efficiently. As with most Web3 applications, there would also be enhanced transparency, given all loan amounts, collateral, and other data are available for anyone to see on publicly accessible blockchains.

Importantly for certain jurisdictions, accessibility is also enhanced. DeFi would be accessible to anyone with an internet connection, without the need for paperwork or third-party verification. Most of what banks and other financial intermediaries offer can be achieved through DeFi, argue its proponents. This includes bank deposits, lending and borrowing, asset trading, and insurance, among others. A few examples of popular DeFi protocols include Uniswap (UNI), Aave (AAVE), and Chainlink (LINK), which are designed to carry out financial transactions.