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The concept of centralization has powered many innovations in the tech space, but at the same time, it handicapped billions of people onboard the World Wide Web. Centralization in the internet space has given the prime power to a handful of central entities to unilaterally decide on the limits and accessibility of the people using the World Wide Web (WWW).

To address this dilemma, Web3 has surfaced as a boon to centralization. It replaces the Web monopolized by huge tech organizations and powers decentralization into the World Wide Web. Web3 distributes power equally into the hands of each web user instead of limiting it to some tech corporations for centralization. Before we start the detailed journey of Web3, let us explore the process of how the Web has evolved in these years.

People mostly perceive the Web as a constant support in modern life where they can surf for information and do their necessary activities like making payments, booking tickets, etc. However, the Web now is quite different from its initial form. To comprehend the Web from its initial stage, we will have to understand Web1.0, Web2.0 and Web3.0 separately.


Web1.0 was invented by the renowned computer scientist Tim Berners- Lee in 1989 and is the actual version of (WWW). It is also known as the read-only Web. Web1.0 constitutes static content that is majorly informational and linked through different hyperlinks. This version of the Web existed till the year 2004.


Web 2.0 is our era’s dominant Web, developed in 2004 and known as the read-write Web, providing dynamic and active websites wherein users can generate content and communicate across multiple platforms. It contributed to the development of apps that were extended to mobile devices and gave several opportunities, such as e-commerce.


Web 3.0, often known as the Semantic Web, is an expansion of the World Wide Web that intends to make the internet robust by regulating content through machine readability. The objective of web 3.0 is to integrate everything on the internet at the data level so that any changes to data inside one platform are reflected concurrently on other platforms. If you switch your employment and modify it on LinkedIn, it will be reflected on other sites such as Facebook.

Now that we have a clear picture of the evolution of the Web let’s see what Web3 comprehensively holds for us. This article will guide you through the nitty gritty of Web3 in the most detailed possible manner.

What is Web3?

The term Web3 has surfaced as the decentralized version of the internet since its innovation and evolution over time. Unlike the centralized and controlled form of the Web, Web3 is a decentralized and distributed network based on blockchain. As it is developed with blockchain as its fundamental technology, Web3 powers its users by giving full control and ownership of their data. The data stored within the Web3 network is not under any authority or controlling body. Instead, several blockchain nodes are distributed throughout the network, and these nodes keep a copy of all the data to regulate network transparency.

Web3 was coined by the co-founder of Ethereum, Gavin Wood, in 2014. He initiated this term to reclaim the data ownership from all the Web2.0 corporations that have been dwelling all over the WWW. Gavin Wood coined the term Web3 with a motive to return users’ data ownership via self-sovereign identities and decentralized storage in a community-driven environment.

This has only been possible because of cryptocurrency wallets like Venly, MetaMask or TrustWallet, in which the users securely store keys to their confidential data and identities. They can interact with other blockchain applications in the same way and take hold of who has access to their data. In the Web3 network, developers build and deploy applications that can run on multiple servers with no central authority to control them. They also store their data on a shared and open database.

Now that we are clear with the basic definition of what Web3 is let’s differentiate it from Web3.0 in the next section.

How is Web3 different from Web3.0?

Many people are confused about the distinction between Web3 and Web 3.0 as the internet moves closer to its third version and faces numerous technological developments and contentious debates. While most talks about the third generation of the Web tend to indicate that web3 and web 3.0 are interchangeable, they are really fundamentally distinct. Web 3.0 emphasizes Tim Berners-Lee’s concept of a connected or semantic web, whereas web 3 is a decentralized, blockchain-based version of the Web.

Below given is the tabular differentiation of Web3 and Web3.0 for your clear understanding:

Point of Difference



Data control and identity

Web3 puts major emphasis on empowerment and privacy by giving back the data control and identity to its original owners.

Web3.0, or the semantic web, majorly focuses on efficiency and intelligence by linking and reusing data across different websites.

Data storage

In Web3, users store their data in a crypto-secured wallet, which can only be accessed using their private keys.

In the semantic web, users’ data is stored using a central place called a pod, and this enables the users to handle third-party access to their data.

Tech stack

Web3 uses technologies like blockchain, digital wallets, digital contracts, decentralized browsers, etc.

Web3.0 uses certain data interchange technologies like OWL, RDF, SPARQL and SKOS.

Data modification

In Web3, it is difficult to tamper, modify or delete the data as it is scattered across multiple nodes.

In Web3.0, the data can be easily tampered with, deleted or altered.

Data access

The assets data stored on Web3 can be accessed using the private keys stored in the crypto wallets.

The data stored on Web3.0 is centralized, which means that it is controlled by authority and can be accessed by anybody on the Web.

Now that we can easily differentiate Web3 from Web3.0 let us understand its importance in the world of technology and how it powers decentralization.

Why is Web3 important?

People are now compelled to give their data out by using their Facebook or Google login to access various online services. Individuals will, nonetheless, own their identities in Web 3. Web3 unleashes completely new business models and value chains where centralized middlemen are no longer preferred by taking the place of third parties with the blockchain. In the end, Web3 returns control to the people by removing the intermediaries.

In reality, we are already witnessing this with NFTs (non-fungible tokens).

Recently, many writers, musicians, and other creators have begun experimenting with different ways to get the majority of the money generated by their work.

Smart contracts, which are predefined contracts embedded into a blockchain and automatically execute whenever certain conditions are satisfied, can be attributed to much of this. With NFTs specifically, smart contracts enable secondary royalty systems, ensuring that artists get compensated each time their work is sold on the open market.

Creators are making more money than ever as a result of this fundamental shift in the value chain, which is progressively changing the tragically accurate caricature of the “starving artist.” That’s the main reason one should think about the credibility and importance of Web3.

What are the core features of Web3?

The following are the core features of Web3:


In an unprecedented way, Web3 offers users control of their digital assets. Let’s take the scenario of playing a web2 game. An in-game item that the player buys is linked to his account immediately. He will lose these things if the game’s developers terminate his account. Or he will lose the value of the in-game asset he purchased if he quits playing the game.

Direct ownership is possible with Web3 thanks to non-fungible tokens (NFTs). Nobody, not even the game designers, has the authority to revoke players’ ownership. Additionally, the player may sell or trade his in-game possessions on open marketplaces to recover his worth if he decides to stop playing.

Censorship resistance

Users’ data is stored on the blockchain in Web3. They may take their reputation with them when they decide to leave a platform and plug it into a different interface that more closely reflects their ideals.

Censorship resistance is a built-in component of a Web3 platform, whereas Web 2.0 demands that content creators put their confidence in platforms to keep the rules the same.

Decentralized autonomous organizations

In addition to owning their data in Web3, users can also use tokens that function like shares to own the platform collectively. DAOs enable decentralized platform ownership coordination and future platform decision-making.

DAOs operate using predetermined smart contracts that automate decentralized decision-making over a resource pool (tokens). Users who own tokens can vote on how resources are allocated, and the code executes the results of the vote automatically.

However, a lot of Web3 communities are referred to be DAOs. Different levels of decentralization and coding-based automation exist in each of these groups.

Digital identity

Traditionally, a person will set up an account for each site he uses. For instance, he will have a Twitter handle, a Facebook account, and a Reddit account. Now the question is, would he want to update his display name or profile picture?

Yes! in certain circumstances, social sign-ins are used. However, this brings up an old problem: censorship. These platforms may shut the person out of his whole online existence with a simple click. Worse, in order to make an account, many platforms also ask to trust them with personally identifying information.

Web3 overcomes these issues by giving users control over their digital identity. Using a blockchain-based address allows a reliable, censorship-resistant, and anonymous single login across platforms.

Native payments

Web2’s payment system is based on banks and financial gateways, which excludes those who do not have bank accounts. Web3 sends money directly to the browser using tokens such as SOL or ETH, eliminating the need for a trusted third party.

Let us now understand how We3 is distributed into distinctive layers in the next section.

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How is Web3 distributed in different layers?

Web3 is distributed into 3 fundamental layers, and each of these layers has sub-layers as given below:

Layer I

I.I Core layer

The core layer is the most essential and basic, and it consists of multiple blockchain protocols, cryptocurrencies, storage systems, and identity administrators.

The core layer has the following sub-layers:

  • Blockchain protocols
  • Cryptocurrencies
  • Decentralized storage systems
  • Identity managers

I.II Transactional layer

This layer comprises the basic layers’ transactional operations, such as marketplaces, custodians, transactions, and wallets. The first layer facilitated the emergence of the following:

  • Cryptocurrency exchanges
  • Cryptocurrency custodian services
  • Payment gateways
  • Cryptocurrency wallets

Layer II

II.I Layer 1 solutions

This layer comprises scaling, interoperability, auditing, monitoring and rating solutions and platforms to fill the gaps that occurred due to Layer I:

  • Polygon sidechain sacling solution
  • Blockchain development platforms like Alchemy
  • Auditing platforms like and
  • Parachains for interoperability
  • Blockchain monitoring platforms like

II.II Vitamins

Vitamins consist of various utilities and tools for seamless integration of Web3 applications. It includes:

  • UX improvement tool for blockchain
  • Open-source platforms for creating seamless and secure dApps
  • Cutting-edge writing platforms for converting creative writings into NFTs
  • DAO governance tools for voting
  • Blockchain data analytics system
  • Decentralized exchanges

II.III Services

Services involve manual work, in contrast to the earlier layers, which incorporate greater automation and software development. The following are its components:

  • Smart contract ecosystems like Mattereum
  • Cryptocurrency exchange platforms
  • Cryptocurrencies for international money transfers
  • Cryptocurrency platform for digital assets
  • Institutional trading platforms for widespread cryptocurrency adoption

Layer III


A number of NFT markets are flourishing, and NFTs have emerged as a key use case for the blockchain. This layer consists of:

  • User-friendly portals for NFT marketplace development
  • NFT staking in smart contracts
  • NFT service providers like white-label marketplace solutions
  • Ready-to-use NFT marketplaces

III.II Communication

  • Web3-based secure messaging protocols
  • Notification protocols for users to receive protocols
  • Open-source and secure instant messaging network

III.III Services gaming

  • Blockchain-based gaming platforms
  • NFT-based gaming platform

Let us now understand the Web3 technology stack comprehensively in the next section.

Web3 tech stack

The web3 tech stack consists of a set of tools and technologies that are different from the Web2 stack. With Web3, open, decentralized technologies like blockchains replace the functions of databases and centralized systems. This shift is intricate and natural. Going from a client-server structure to a decentralized web is not a big change. The tiers of the Web3 technological stack are as follows:

Layer 0: Infrastructure

The infrastructure layer, upon which the rest of the web3 stack is constructed, is composed of the underlying blockchain architecture. The functions of this web3 stack tier are as follows:

  • Mining as a service (MaaS)
  • Blockchain networks to run various decentralized applications
  • Virtualization to create virtual resources like OS, storage, etc for network
  • Decentralized computation of multiple computers
  • Nodes to regulate and keep track of the distributed data
  • Tokens for trading, storing and transferring digital assets
  • A decentralized storage unit for autonomous and secure storage

Layer 1: Protocols

The different consensus techniques, protocols, participation criteria, and virtual machines are all components of the web3 stack’s protocol layer:

Consensus algorithms

  • Proof-of-Work
  • Proof-of-History
  • Delegated-Proof-of-Stake
  • Proof-of-Elapsed-Time
  • Stellar Consensus Protocol

Side chains

Tokens and other assets can flow from one blockchain to another through the unique sidechain method. Developers have a lot of potential with sidechains since they can build decentralized apps without affecting the main chain. Sidechains are autonomous blockchain network units that manage their own security. If one sidechain is hacked, just that one sidechain will be impacted, not the others.

Type of blockchain networks

  • Public/Permissionless blockchain
  • Private/Private blockchain

Virtual machine

Virtual machines are made to uphold security and run unstable programs from all of the network’s computers.

Layer 2: Utilities

This layer comprises the following:

  • Multi-signature
  • Oracle
  • Wallet
  • Digital assets
  • Smart contracts
  • Digital identities
  • Distributed file storage

Layer 3: Services

This technological layer includes all the tools required to build and monitor the dApps layer. Data feeds, off-chain computation, governance, state channels, and side chains are included in this tier.

Layer 4: Applications

The dApp browsers, application hostings, user interfaces, and dApps are all part of the web3 stack’s application layer.

What is Web3 storage, and how does it work?

Through decentralization, Web3 storage allows users ownership over their data while retaining complete access to storage and communication. This user-focused online version operates on blockchain networks and substitutes thousands of distributed computers (or “nodes”) throughout the world for centralized single servers. Instead of using conventional channels and procedures, they communicate with users utilizing decentralized applications.

Web3’s foundational architecture is based on blockchain technology. A blockchain needs decentralized storage since blockchains aren’t meant to store a lot of data. The foundation of blockchain consensus is the speedy and efficient sharing of tiny quantities of transaction data between nodes for validation. It is technically feasible to store data in these blocks.

One of the prominent examples of Web3 storage is Filecoin. It is a peer-to-peer network that holds files that were created by Protocol Labs, the same firm that created IPFS. It contains built-in economic incentives to ensure that files are reliably stored over time. Users can use Filecoin to pay for storage solutions. Storage providers are systems that store files and can demonstrate that the information has been appropriately preserved over time. Anyone who wants to save files and gets rewarded for it can use Filecoin. A single firm does not set storage prices and availability. Instead, Filecoin allows everyone to participate in an open market for storing and retrieving data. Filecoin has both a blockchain and its own cryptocurrency (FIL). Storage providers can get FIL units for storing files.

What are the use cases of Web3?

Web 3 Use Cases and Applications

Following are the core use cases of Web3:

Metaverse and metaspaces

The metaverse projects can use the web3 ecosystem and its networking properties to improve the autonomous experience for users. With technologies like IoT and artificial intelligence, Web3 further strengthens the metaverse and enables realism inside it.

Next-gen dApps

Blockchain technology is used by decentralized apps, which are not owned or managed by a centralized authority. Web3 provides advanced development that is both feature- and usability-rich. Web3 dApps include those for metaverse, DeFi, NFT, and gaming. Web3 projects benefit from the true decentralization and interoperability of dApps.

Decentralized finance

DeFi gains from Web3’s various advantages, which include easy accessibility to an open source ecosystem, cheaper transaction costs, quick payment processing, and more autonomous & transparent governance.

P2E gaming

Play-to-earn, NFT, and play-to-own games are examples of blockchain-based games that have evolved into Web3 games. The creation of next-generation games that enable players to own, sell, and manufacture in-game assets to earn revenue from the game is facilitated by the usage of technologies like blockchain, NFTs, and underpinning gaming infrastructure in these web3 games.

Maintaining data privacy

The most widely used technology with the potential to decentralize the future is undoubtedly blockchain. However, “full transparency” occasionally raises privacy concerns in users. Web3 makes it possible for blockchain infrastructure to use cutting-edge ideas like zero-knowledge proof and cryptography to maintain total secrecy for improved privacy in decentralized digital infrastructures.

Social media

A new generation of social media networks powered by Web3 highlight the creator-driven economy with a primary focus on giving users content ownership instead of any centralized institution. Social networking apps like Facebook, Instagram, and Snapchat will be replaced with the Web3 version. Web3 apps allow for anonymous access to users through wallet addresses and private keys, which is a huge development.

Advance NFT use cases

NFTs are a crucial component utilized in the blockchain. On the web3 ecosystem, NFTs have a wide range of applications, including rewarding viewers, granting users digital ownership, and storing immutable information on the blockchain.

Virtual real-estate

A variety of “new” Web3 real-estate ventures have been created that leverage NFTs, virtual reality, and 3D technologies to verify possession and transfer NFT-based real estate properties now that web3 is offering a more robust and broad ecosystem for real estate.

Remote workplaces

Companies are using web3 technologies to create 3D realistic places of work that transform their physical workplaces, allow employees’ avatars to work inside the digital workplaces, interact with their co-workers, and participate in fun events just like the real workplaces because Web3 facilitates the creation of high-end metaverse projects.

What is the role of a DAO in Web3?

A DAO’s main benefit in Web3 is that it is completely transparent because of blockchain, unlike traditional businesses. Anyone can view and examine all of the DAO’s activities and financing. This openness avoids the censorship of crucial information and considerably lowers the possibility of corruption.

Additionally, it guarantees that the DAO keeps its commitment. This is due to the fact that DAOs, like NFTs, operate on smart contracts that can cause an action to be taken whenever specific criteria are satisfied. A smart contract, for instance, can make sure that ideas that obtain a particular number of affirmative votes are automatically implemented in the case of a DAO.

DAOs function with a uniform hierarchical structure, in contrast to typical top-down organizations, which almost all businesses and non-profits are, giving all members a voice in important decisions that affect the entire group rather than just the major stockholders.

What is Web3 in EdTech?

While Web3 is still in its infancy, it has already begun to upend the economy and the creative world. As Web2 is being overtaken, the education industry will also need to adjust. Everything will need to be changed, from the curriculum to the administration. This represents a substantial change in how schools engage with digital information. Every piece of information—including grades, reports, and medical histories—will be uploaded to the blockchain. Additionally, schools will have new options for structuring their infrastructure, and successes will be immediately evident and verifiable.

With Web3 in EdTech, a school can develop its own token to serve as the basis for an internal economic system in which students and instructors can participate. This can be a method for schools to counterbalance their budgets and reduce their reliance on government assistance. A similar evolution can happen with PLNs (Personal Learning Networks), which could mature into DAOs where worldwide groups may drive the education landscape in new ways.

What is Web3 in finance?

In contrast to Web2 payments, decentralized Web3 payments are free of anybody with the ability to obstruct transactions. Anonymity is provided by blockchain technology. Web3 is also supported by advanced computers located all over the world. As a result, even if one node fails, another one replaces it removing the single failure points.

The revolutionary peer-to-peer web3 payment architecture makes deploying apps to production considerably easier and faster.  As a consequence, users will be able to transfer money to others without having to register for banking services. Buyers can transfer money online without registering for banking services or allowing corporations access to their financial and personal information since Web3 data is secured.

What is Web3 in gaming?

Web3 gaming is a decentralized gaming process in which the actions of a gaming ecosystem or a game platform, especially gaming asset ownership and decision-making in all elements of gaming, are assigned away from any centralized power.

Mechanism of Web3 Gaming

Web3 games are created by incorporating blockchain into the gaming environment, allowing players to vote on when and how the game should progress. Web3 gaming also creates the groundwork for gamers to profit while playing by allowing asset trading, tradeable game tokens, and possibilities to earn in cryptos.

Web3 gaming offers the gaming industry fair virtual markets where players may access and completely control in-game digital goods. These assets are unique and are saved in the form of gaming NFTs.



Web3 is a revolutionary concept, although it is still in its early phases and has yet to grow. Many sectors have begun to deploy web3 use cases in order to remodel their company infrastructure and transition to Web3 architecture. DAOs and the metaverse are two major instances of web3 use cases that are assisting enterprises in realizing their full commercial potential. With the passage of time and the advancement of technology, new web3 use cases will emerge to address existing business inefficiencies.

As the Web3 ecosystem has grown in popularity, businesses have begun to create creative decentralized apps on top of Web3 technology. Developers change to the new layer as each layer of Web3 architecture advances to generate more stable and future decentralized solutions.

Find out more about our Web3 development services if you’re planning to develop a Web3 application.

Author’s Bio

Akash Takyar

Akash Takyar
CEO LeewayHertz
Akash Takyar is the founder and CEO at LeewayHertz. The experience of building over 100+ platforms for startups and enterprises allows Akash to rapidly architect and design solutions that are scalable and beautiful.
Akash’s ability to build enterprise-grade technology solutions has attracted over 30 Fortune 500 companies, including Siemens, 3M, P&G and Hershey’s.
Akash is an early adopter of new technology, a passionate technology enthusiast, and an investor in AI and IoT startups.

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