What Is Web3? A Beginner’s Guide to the Future of the Internet

The Internet is entering a new chapter, the one where people have more power. What is Web3? A key question anyone may be curious about today.

Simply put, Web3 is the next version of the web that provides you more control. Instead of relying on big tech companies, you can manage your data with Web3. It gives you ownership of your digital identity, assets, and interactions.

Many web developers and content managers have begun to explore this field. As a curious explorer, you must understand how Web3 is the future of the Internet.

In this guide, we’ll break it down in the simplest way possible. Get thrilled to know how Web3 could change the way we use the Internet. Let’s get rolling!

What is Web3?

First, let’s define what web3 is.

Web3 is a new idea for how the Internet could work. This term, ‘Web3,’ was initially coined by Gavin Wood, a co-founder of Ethereum, in 2014.

At that time, it’s defined as the future version of the Internet that’s more open and user-focused. It aims to provide a web where people have more control.

Currently, most websites and apps are run by large companies that decide how your data is stored and used. Now, Web3 aims to change that by using technologies like blockchain to give users more say. 

In this version of the Internet, you can manage your own data. In fact, it lets you shape your online projects and interact without needing a central authority.

Stay amazed because the market value of Web3 in 2023 was $2.86 billion. The growth outlook of 44.5%. It’s expected to grow $6.15 billion in 2025 with a compound annual growth rate of 38.9%.

With that, let’s move on to checking out its major features.

Major Features of Web3

Web3 has six main features that you must understand to know about the core of Web3. Let’s go!

1. Decentralization

Whether you’re posting on social media, storing files, or making payments, all of these things go through tech giants via the Internet. These companies have centralized servers and rules, and can decide how your data is used.

If those companies shut down or decide to remove their data, then everyone feels its impact. Now, what Web3 does differently is that it’s based upon the concept of decentralization. In fact, Web3 is usually referred to as a ‘decentralized web.’ 

Meaning, your data isn’t stored in a single location or controlled by a few centralized servers. But it’s spread across a network of computers globally. 

Not a single organization can lock you out, change the rules without notice, or sell your data without your permission. This reduces SPOFs (Single Point of Failure). 

• You who choose where your data lives—not a company.
• You pay directly for services like storage or access without any middlemen.
• Your data is copied across multiple locations, so it stays safe and consistent.
• You can sell your own data if you want to, instead of giving it away for free.

Hence, decentralization is all about distributing power and decision-making. It’s still early days, but the goal is clear: a more open, fair, and user-controlled web.

2. Semantic Web

Tim Berners-Lee had originally introduced the semantic web. Now, it’s a key concept that Web3 focuses on. Simply put, the semantic web tries to make Internet data understandable by machines and not just readable by humans.

Previously, computers could just see the numbers and words. But the semantic web lets them grasp the meaning and context, too. That’s due to metadata (data about data) and AI. As a result, applications can now carry out sophisticated tasks. 

Let’s take an example. A semantic web-based search engine can offer accurate and relevant results. It’s because such a search engine doesn’t just perform keyword searches but truly understands your intent.

That’s how the semantic web can let Web3-based applications understand the content and relationships between data. It really improves Internet technology by creating, sharing, and connecting content through proper analysis.

Get ready for more intelligent and personalized online experiences with Web3.

3. Improved Privacy and Security

Next, Web3 strongly focuses on the need for enhanced privacy and security. This can be gained with innovative technologies and architectural principles.

The list below includes some of the security characteristics that Web3 aims for:

• Advanced Cryptographic Techniques: Encryption and digital signatures make it hard for unauthorized data access or modification. With digital keys, your data is locked, and you can only grant or revoke access to it.
• Decentralized Storage Solutions: Here, data is divided, encrypted, and distributed across computer networks. So, this minimizes security risks, including data breaches, hacking, and SPOF.
• Blockchain Technology: This provides data transparency. Meaning, when your data is added on a blockchain, it can’t be changed and becomes a tamper-proof record.

Therefore, Web3 uses strong security practices. In addition, it applies ‘self-sovereign identity’ models. So, you’ll get direct control over your digital data and better security on your online experience.

4. Interoperability

Another Web3 highlight is its interoperability that aims to generate a highly connected and fluid digitized environment. Meaning, it’s the capability for apps, platforms, and devices to connect and share data without interference.

Here are some examples:

• Effortless Data and Asset Transfer: Your digital data and assets are fully portable and easily transferable across different Web3 applications.
• Breaking Down Silos: It connects diverse decentralized applications for a seamless interaction and novel combinations of isolated services.
• IoT Connectivity: Integrates with IoT devices, extends the web’s reach to the physical world, and lets smart objects interact with decentralized systems.

Hence, the interoperability of Web3 lets your digitized tools and assets work together in a unified environment.

5. Trustless and Permissionless

In Web3, interactions and transactions can occur directly between you and the recipient without the need for trusted intermediaries. So no need for banks or large tech companies. 

Different consensus mechanisms and cryptographic proofs allow the foundation of the ‘Trustless’ nature in Web3. As a result, it maintains the integrity of the system; trusting one another among participants is not required at all.

On the other hand, ‘Permissionless’ means that anyone can participate in the network. Plus, there’s no need for approval from a central authority. As a result, you’ll get inclusivity and open access.

6. AI and Machine Learning

Guess what? AI and machine learning are also Web3 features to make applications smarter and more responsive. They can generate more personalized and predictive experiences through the analysis of user behavior, preferences, and datasets.

In fact, using AI in Web3 will make your experience efficient, process automatically, and give distributed data-driven insights.

The growth of using AI tools on blockchain technology in 2025 is 86%. Around 4.5 million digital wallets are used daily to interact with AI apps on such networks.

With that, let’s move into the next section of this guide.

Web3 Core Components and Examples

Web3 also contains a set of components, which are a stack of innovative technologies that it’s built on. Now, check out those core components working collaboratively to build a decentralized and user-centric Internet.

Let’s start!

1. Blockchain Technology

The most fundamental backbone of Web3 is blockchain technology. It’s just like a digital ledger that’s shareable and continuously updating across the distributed network with computers (called nodes). 

Did you know? Over 560 million people are using blockchain technology in 2025 globally. That’s around 3.9% of the world population.

Here’s everything revolving around blockchain technology to make you understand how it establishes the future of Web3.

• Immutable Records: Here, information is saved in blocks that are permanently linked. So, it’s hard to make changes to the recorded data.
• Consensus-Based: If you want to add new information, then it’s possible only when most of the networking computers agree. That’s why everyone will get access to the same data you store.
• Decentralized Control: One person or company doesn’t own your data, but every node on the network has a copy. So, power is given to each individual.

For instance, Ethereum is a popular blockchain platform. Based on it, several Web3 applications are built to offer many decentralized programs.

2. Smart Contracts

When we mentioned decentralized programs, one of them was smart contracts. It’s a self-executing program or agreement saved right on a blockchain.

Simply put, these programs automatically execute certain activities if the predefined conditions are met. Hence, these offer immutability and transparency. This makes no need for intermediaries and human interaction for execution. 

One example can be Uniswap. It’s a decentralized exchange that uses smart contracts to automate cryptocurrency trades between you and your friend.

In fact, the arena of smart contracts is estimated to be worth $2.69 billion in 2025.

3. Cryptocurrencies

You may have heard or known about this one! Cryptocurrencies are digital assets that work as a medium of exchange on decentralized networks. So, it doesn’t require central banks and governance. You do your own thing.

Moreover, it uses strong cryptography to secure financial transactions. Plus, you’ll get more control over creating additional units and even verify the asset transfer.

In 2025, the expected number of cryptocurrency users globally is said to reach 861 million.

The best example of cryptocurrencies is Bitcoin ‘BTC.’ Actually, it’s the first and most popular one used to digitally store the value. In fact, Ethereum, the blockchain, is another cryptocurrency, too.

Check out our review on CoinGate, a WordPress plugin for cryptocurrency.

4. Non-Fungible Tokens (NFTs)

Non-Fungible Tokens or simply NFTs, are those digital assets on a blockchain that have a unique identity on each record. So, each NFT is distinct and not like other interchangeable cryptocurrencies.

Did you know? In 2025, Statista revealed the estimated revenue of the NFT market is said to reach $504.3 million. 

Here are some features of NFTs:

• Distinct Digital Ownership: NFTs offer distinct proof of ownership for digital goods. This makes your digital files valuable and unique.
• Different Representations: These tokens can represent a wide range of things, whether digital or physical. So, it can be digital art, music, and even parts of a real item.
• Empowerment: Anyone can use NFTs to sell their work. Creative workers and artists can sell their illustrations and paintings through NFTs. This lets them earn royalties from future sales and maintain needed authenticity.
• New Experiences: In addition, you can even build new digital experiences with NFTs. This includes ticketing and membership levels for exclusive access to your work, like visual art exhibitions.

5. Decentralized Apps (dApps)

One of the core components of Web3 is the interactive software, dApps (Decentralized Applications). dApps run on a decentralized peer-to-peer network, which is generally on blockchain.

In addition, they use smart contracts for the automation of their functionalities and smooth delivery of the services. So, their rules are well-coded and self-executing.

Here are some more characteristics of dApps:

• Open-source and Transparency: dApps are usually open-source, so their code is easily accessible. This makes it transparent for boosting innovation.
• Tokenized: Similarly, dApps can also use digital tokens so that people can participate and contribute quickly. You can even earn rewards from it.
• Resistant to Censorship: As it follows decentralization, dApps become highly censorship-resistant. This means they resist being shut down.

Currently, you can check out various dApps in different areas. This includes gaming, social media, and supply chains because they provide innovative methods to interact and perform actions.

In fact, Web3 gaming is the most growing market. It’s predicted that Web3 gaming will increase from $37.55 billion in 2025 to around $182.98 billion by 2034.

For instance, a popular dApp game where you can earn cryptocurrency and own in-game NFTs is Axie Infinity.

You may have heard about the Brave Browser. It’s known for its privacy-focused browsing experience. That’s also because it’s a dApp that rewards you with cryptocurrency. Amazing, right?

6. Decentralized Finance

If you want to explore more dApps, then you can check out DeFi, which stands for Decentralized Finance. It’s one of the most revolutionary dApps that offers financial services through the Web3 technology.

Guess what? According to Statista, around 46% of all mobile apps using the keyword ‘Web3’ are actually finance apps as of May 2022.

Simply put, DeFi creates an internet-based financial system. No involvement of banks, brokers, or exchangers is essential as the operation takes place seamlessly.

In fact, it’s built on blockchain technology and uses smart contracts. So, you don’t need to trust a bank to hold your money.

Plus, you can access and use your data or money with a simple crypto wallet and internet connection. Just having that provides several financial services you need. Yes, your location, financial background, or credit history doesn’t matter at all.

As you can maintain full control over your digital assets, the following are some financial services that DeFi offers:

• Borrowing and Lending: You can borrow funds or lend your cryptocurrencies with interest. It’s manageable with smart contracts.
• Trading: Say bye to the central order book. You can directly trade cryptocurrencies through DEXs (decentralized exchanges).
• Insurance: With decentralized insurance, you’ll get protocols built to provide insurance with protection against security risks.

Overall, using these financial services with DeFi can be way quicker with reduced fees than most traditional finance. One example of a DeFi protocol is Aave, which lets you lend and borrow cryptocurrencies.

How Web3 Differs from Web1 and Web2?

Undoubtedly, you must check out the evolution of the Internet through its phases to understand the importance of Web3.

1. Web1 (Read-Only Web of Around the 1990s to Early 2000s)

The first version, Web1, was the ‘static’ internet. That’s because websites were built for storing and showing information. For example, newspapers.

Meaning, you could read content, and that’s it. You weren’t able to create your own content or interact with others.

Thus, sites had general functionality with the main purpose of showing information. The earlier versions of Yahoo! and some static personal web pages fall under it.

2. Web2 (Read-Write and Social Web of Around the 2000s to Present)

Moving on to this Web2 era, websites have gotten more interactive, contain user-generated content, and support making social connections. Yes, solutions like Facebook, Wikipedia, and YouTube are all part of the Web2 evolution.

These platforms are way more powerful than users like you in the case of Web2. Note that Web2 websites generally use a central platform that bridges the gap between servers and users.

They collect enormous amounts of data and can monetize it via advertisements or any other service. Although such websites let you read, write, and share content, Web2 also brings data security, privacy, and censorship concerns. 

3. Web3 (Read-Write-Own and Decentralized Web of this Emerging Era)

Now, Web3 is all about addressing the drawbacks of Web2. The power that used to be with the tech companies in Web2 is now shifted back to users like you. 

As mentioned before, it uses blockchain and other technologies following decentralization. Thus, it’s not just about reading and writing data, but you ‘own’ it as well. So, the ownership of your data is all up to you.

Comparison Table on Web1 vs Web2 vs Web3

Along with that, find out the differences between Web1 vs Web2 vs Web3 here!

Pros and Cons of Web3

Like any other technology, Web3 also has both pros and cons that you must be aware of. Let’s check them out!

Pros of Web3

• Users get true ownership of their data. So, you can decide and control if you want to share or monetize your data on your own.
• Decentralization offers peer-to-peer interactions along with a reduction of the fees and censorship.
• The immutable nature and use of blockchain’s cryptography make the data more secure and resistant to privacy risks.
• Trustless transactions by not needing to trust third-party intermediaries. 
• Creators can monetize their digital work with verifiable ownership.
• Provides new financial opportunities that are more transparent.
• Offers uptime service by reducing the single points of failure.

Cons of Web3

• These technologies are complex and have a steep learning curve for users.
• Blockchains lack scalability, so conducting many transactions can be slow.
• It’s expensive to develop and deploy Web3 applications and requires skills.
• Lacks proper legal frameworks that impact adoption rates.
• Volatility of cryptocurrencies and NFTs may result in loss of assets.

The Future of Web3

The components and features of Web3 aren’t limited here. The arena of Web3 is rapidly growing with an intense and debatable future. 

Here are some possible enhancements in Web3 that you may likely see in the future. Check them out to know how they may reshape the Internet. Let’s start!

• It’s expected that the decentralization of Web3 will go deeper. Meaning, more elements will get spread across the networks. 
• With the growth of AI, the use of AI on Web3 will increase for the creation of decentralized applications, which are intelligent and personalized.
• We’d likely get more scalable Web3 technologies. Many research and development efforts are ongoing to overcome the previous limitations.
• The positive influence of Web3 is recognized by governments. So, there may be more regulatory frameworks for consumer protection.
• Currently, tokens are often generated for digital products. Now, real-world assets like real estate can be on the blockchain for more opportunities.
• Web3 can dive into newer industries, such as gaming, entertainment, governance, etc. This empowers everyone to monetize and get its benefits.

These potential revolutions are possible. But it requires continuous technological advancements, collaborative implementation, and increasing adoption by both developers and users.

Conclusion

That’s a wrap! Hopefully, you now understand the big question, ‘What is Web3?’

Now, you may have likely figured out that Web3 has huge potential in changing sites’ functionality and your involvement. It’s delightful that its components, like blockchain technology, smart contracts, and cryptocurrencies, have to offer. 

Which area are you most curious about? Comment down your queries. We’ll help!

If you’re a tech enthusiast, then check out our other guides on JPG vs PNG vs WebP and the tutorial on using Cloudflare CDN on WordPress for free.

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