web 3.0

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What is Web 3.0? The Beginner’s Guide

Web 3.0 became a hot topic in 2021. What is Web 3.0 and why is it such a revolutionary concept? This article is the Web 3.0 beginner’s guide. We’ll go through the evolution of the internet and learn what Web 3.0 is all about.

Web 1.0 era

Before we can understand Web 3.0, we must go back in time and learn about Web 1.0 and Web 2.0 too.

The word ‘web’ refers to World Wide Web (WWW) developed by Tim Berners-Lee in the late 1980s and early 1990s. When we talk about Web 1.0, we are referring to the early days of the internet. This means roughly the period from 1991 to 2004.

Back then, web pages were static. The most important services were e-mail and online news. Many people also learned how to use search engines and online banking in the late 1990s.

Below is a picture of Netscape Navigator. It was a popular web browser in the mid-1990s. Mozilla Firefox was developed from Netscape Navigator about ten years later.

netscape navigator

When we think about technologies and protocols of the Web 1.0 era, there are three acronyms that stand out: HTML, URL, and HTTP.

HTML comes from Hypertext Markup Language. It is the language used to create web pages. URL means Uniform Resource Locator and it is the address of the website. HTTP refers to Hypertext Transfer Protocol. It transfers information from the webserver to your browser.

Web 1.0 was the era of the static internet. There was very little functionality on websites and close to zero multimedia. Slow internet connections wouldn’t have made it possible to build content-heavy apps anyway.

Web 1.0 was owned by corporations, and they also built the content. It was read-only internet where users couldn’t impact the information given to them. There weren’t any algorithms handing you useful content either.

Web 2.0 era

The Web 2.0 era has revolutionized the use of the internet. Boring and statics websites of Web 1.0 have been replaced with interactivity, social media, and user-created content. Web 2.0 has made it possible for anyone to reach millions of people in a matter of seconds.

Javascript, CSS, and HTML5 have become familiar to all web developers. These technologies have made it possible to create content-rich & interactive apps. The web infrastructure has also improved massively. Everyone can transfer megabytes in seconds even with mobile devices.

Web 2.0 started around 2004. We are currently living in this era of the internet. Facebook, Twitter, Youtube, and Instagram are good examples of the Web 2.0 era.


The current era of the internet has been titled as social web. One of the key characteristics of Web 2.0 is user-created content. Sure, news sites and search engines still exist from Web 1.0, but it’s social media that has seen the biggest revolution.

Some could argue that discussion boards of the 1990s were the first steps of Web 2.0. One of the pioneers is Wikipedia, where users are creators and moderators of the content.

One thing hasn’t changed. Popular websites are owned by large corporations, which have grown to global giants in the past ten years. Facebook, Google, and Twitter have all made boatloads of money in the Web 2.0 era. Users get a free app because they are the product.

Mobile devices, social media, and cloud services

The most popular creations of the Web 2.0 era exist thanks to mobile devices, social networks, and cloud services.

Billions of adults have a smartphone with a fast internet connection these days. Web 1.0 was used at home or at work with a PC. A modem was needed, which created the internet connection via phone lines. Internet usage was low and expensive.

Mobile internet has changed our lives. More and more people are online 24/7. Mobile apps are alerting users day and night.

In the video below, Apple CEO Steve Jobs presents the first-ever iPhone in 2007. This was one of the catalysts for Web 2.0.

Internet wasn’t a very social place in the early days. It was also quite anonymous. Then came services like Friendster, MySpace, and Facebook. Social media apps attract users to create content and get rewarded by friends with likes and comments.

The Web 2.0 era has also seen the rise of the platform economy with apps like Uber and Airbnb.

The third piece in the puzzle is cloud services, which are responsible for hosting the most popular websites. Cloud services (AWS) have data centers all around the world. They sell computing power and hosting. This has made it possible to build massive apps without having to invest in the hosting infrastructure yourself.

Possibilities and concerns of Web 2.0

Web 2.0 apps have made it possible to earn money in a whole new way. A content creator could make a living out of blogging or Youtube videos. Web 2.0 has created something called the gig economy. It is a flexible form of economy where people earn living by driving Uber, renting their house on Airbnb, delivering food, etc.

All this couldn’t be possible without mobile payments. Nobody was using a mobile phone for payments in the early 2000s, but the rate of change has been amazingly fast in the past ten years.

uber driver

There are also concerns. The most popular Web 2.0 apps are run by giant corporations, who control user data and privacy. Web 2.0 apps are also “walled gardens”. Even if you could reach one million Instagram followers, you can’t export your audience to a different platform.

The term de-platforming has unfortunately become a trend in the past years. Many popular Youtube channels and Twitter accounts have been closed by the corporations running them. This has raised the discussion of freedom of speech. It’s been a hot issue, especially during the pandemic.

Of course, the corporation running the service can choose its users. But many have felt the de-platforming has been arbitrary. Closing a social media account can also cause severe financial losses if you lose a huge audience (and related income) that has taken years to build.

Web 3.0 is open and decentralized

Blockchain technology and tokenization are seen as solutions to previously described problems. Bitcoin was invented in 2008 and made decentralized digital money possible first time in history. It has inspired and enabled further innovations in the past ten years.

For example, smart contracts, DeFi, NFT, DAOs, and play-to-earn games couldn’t exist without Bitcoin. The umbrella term for everything is the internet of value. Applications are no more owned and run by big corporations. Users are now involved in creating and owning the services.

Web 3.0 is all about decentralization and running services without centralized parties. Web 3.0 apps are mostly built with open-source code, and they use a public blockchain. Anyone can verify the data 24/7. For example, Ethereum is a popular platform for DeFi applications. All the data in the Ethereum blockchain can be browsed via Etherscan.

There is also freedom of participation. Anyone can download a Web 3.0 wallet and create an account without any restrictions. This is usually a cryptocurrency wallet too, which the user controls fully. No one can close such an account but the actual owner.


See the image above. MetaMask is one of the most popular cryptocurrency wallets and Web 3.0 wallets in the market. It runs as an add-on to Chrome and Brave browsers.

In Web 3.0 trust is the key, or the fact, that you don’t need it. It’s all about decentralized applications run on peer-to-peer networks operated by other users. This economy has been built from the ground up without central planning or billion-dollar corporations.

Financial incentives in Web 3.0

The open and decentralized environment of Web 3.0 incentives its users to benefit financially. This is where cryptocurrencies are used. It’s typical that core users of Web 3.0 apps are rewarded with tokens, which can be then exchanged to fiat currencies or stablecoins on decentralized exchanges.

Web 3.0 apps can also decide what kind of tokens they use. Almost all DeFi tokens are so-called governance tokens. It means that holders get to vote on the future of the protocol. It’s almost like owning a share of a company.

Tokenization is so powerful because it incentivizes people to grow the application. They can get real benefits from being owners, just like owners of real companies see the valuation of their stocks go up.

Companies will tokenize some (or all) of their stocks in the future. This makes it possible to even airdrop tokenized stocks to people’s wallets. It is also very likely that celebrities will launch their own social tokens in the future, which would give a de facto valuation for a person’s popularity.

Previously mentioned airdrops are important in Web 3.0. They mean simply giving free tokens to people by “dropping coins to their wallets”. One of the most famous airdrops was done by Uniswap in 2020. Everyone who had used the protocol received 400 UNI tokens. The value of those tokens peaked at $17,600.

The challenges of Web 3.0

Web 3.0 sounds almost like a dream. The power will be taken out of the big corporations and given back to the people. Everyone can get a slice of success instead of the 1% elite making all the money. The reality is not quite so rosy. There are still big challenges in Web 3.0.

The first issue comes from technology. It’s quite difficult to use Web 3.0 apps compared to Web 2.0 apps. A user must learn how to use a Web 3.0 wallet and how to back it up and store passwords safely. You must also learn how to buy, transfer, and store cryptocurrencies.

DeFi apps used to only run on Ethereum. This has now changed. There are popular apps on dozens of platforms, which all require different wallets and other knowledge.

Web 3.0 apps must also still rely on centralized tech companies. Previously mentioned cloud services are good examples. For example, the interface of a decentralized app must be hosted on a centralized server. Even the use of the internet is done via central servers.

Below is the front page of the popular PancakeSwap application. It’s a decentralized exchange (DEX).


IPFS technology will offer some solutions, but it’s too difficult to use for the mainstream. You can read more about this subject from our Filecoin guide.

One of the key features of Web 3.0 is the ownership of applications. Even if everyday users can and will own Web 3.0, the question is, who is making the big bucks? Twitter founder Jack Dorsey kicked the hornets’ nest in December 2021 with the following tweet about Web 3.0.

According to Dorsey, the beautiful idea of decentralized Web 3.0 ownership doesn’t hold water. He claims that DeFi apps are controlled by VCs. There are also facts to support this claim.

Uniswap is the most popular decentralized exchange. Even if the smart contracts of Uniswap are decentralized and even if the UNI token was airdropped to users, there is a tech company building the app. And this company was financed by VCs, who make boatloads of money when Uniswap becomes more valuable.

All popular crypto projects have started in recent years with private funding rounds. This is where the VCs join the project and get the cheapest tokens. When a standard user can invest in the project, VCs have already done 100x with their initial investment.

DAOs could change the ownership structure in the future. It’s also a fact that anyone can pull a 100x in the crypto market even if you couldn’t join as early as the VCs. Many airdrops done by DeFi apps have also become worth thousands of dollars.

Even if there are still challenges, Web 3.0 is at least a step in the right direction.

Photo by Charles Deluvio on Unsplash, Photo by Paul Hanaoka on Unsplash, Photo by Souvik Banerjee on Unsplash