Web3 - Technology and Business of a Decentralized Future

Those who love the idea of having control power over their belongings must get excited about the future that Web3 promises. “Power to the People” - where each individual has full control over what they own and what they share. But diving deeper into the core of all buzzing and abstract concepts, we believe Web3 is a new way of doing business - as every time that has happened in the past: innovative technology is the base for new businesses. So, what kinds of Web3 technology will make what kinds of business in our decentralized future?

Web3, Web 3, or Web 3.0?

Firstly, let’s clarify the correct form of the term. Is it “Web3” or “Web 3” (with space) or “Web 3.0” (with space, a dot, and “zero”)? Which is the correct term for “Web3” that you are thinking about?

I believe “Web 3.0” is the term used by Tim Berners-Lee (from 2006), which refers to his belief in “Semantic Web” [1], but currently leans into “Decentralized Internet” as in the Solid project that he is leading [2].

“Web3” as we think of it today was introduced in 2014 by Gavin Wood [3], one of the co-creators of Ethereum. I believe this term is more associated with blockchain technology and is being used widely within the blockchain community.

Another term “Web 3” (with a space) is ... hmm …, possibly from the speaking form of the term or from the convenient writing (often with space) of some writers.

Let’s draw a line between these terms! “Web 3.0” should be used when referring to a technology direction (the decentralized Internet as of Solid project) that focuses on Web standards. On the other hand, “Web3” should refer to the protocol that utilizes Blockchain technology and decentralized financial tools to facilitate new business models. Solving “decentralization, identity, and privacy” while doing business is the goal of any Web3 project.

(Fun) Sidenote: The Web3 Foundation has the title indicates “Web3” but they call it again “Web 3.0” in other paragraphs. It seems a majority of writers out there would consider these two terms interchangeable.

Image: Screenshots from Web3 Foundation - some unclear, mixed use of “Web3” and “Web 3.0”.

The vision & purposes

In some aspects, the vision of Web 3.0 (not using Blockchain) and Web3 (using blockchain) is overlapping: giving users control of their data.

Quote from Solid project:

“... empowerment towards ‘an equitable, informed and interconnected society’... to realise a space where individuals can maintain their autonomy, control their data and privacy, and choose applications and services to fulfil their needs.”

The vision evokes many purposes once completed, but two are at most clear: (1) to prevent any big/centralized companies from misusing users' data, and (2) to provide users opportunities to benefit from their data.

From my point of view, Web 3.0 (no blockchain) focuses more on the first purpose while Web3 (with blockchain) the second. Let’s digest some published opinions to clarify my point.

Web 3.0, in Solid project:

Image: Screenshot of Solid project website

Tim Berners-Lee also said, “When you try to build those things on the blockchain, it just doesn’t work.”[2] And he is partially correct in saying that. We agree that the amount of real-world data that needs to store on the Internet is out of the scope of any blockchain network to scale. A hybrid solution that relies on off-chain storage and on-chain proofs is preferable. However, his saying is not fully correct, in my opinion. When combining blockchain technology with external decentralized storage, Web3 can achieve a similar scalable solution.

Regarding the second purpose, Blockchain technology on the other hand will surely provide many financial tools that can bring users many opportunities to benefit from the data. Blockchain will bring internet-native wallets, on-chain payments & marketplaces, and many other DeFi solutions for users to receive both “loyalty” and “royalty” value contribution.

While respecting the efforts of the Solid project team, we find the learning curve for it is high, while it still lacks solutions for native payments (i.e., lack of solutions for the second purpose). Web3 also has new paradigms that require learning but it has a wider community and is evolving faster with many adoptions. In the short future, we will see more efforts of Web3 (using blockchain and decentralized storage) to complete both described purposes. Only then the execution may be complete and will fully offer interoperability, speed, scalability, and privacy. And only then, the business of Web3 would begin.

Side note: After the above discussion, we will use only the term Web3 from now on. The term refers to a protocol that is built on top of blockchain and related decentralization technologies for new business models - with or without Web standards from Web 3.0.

A decentralized business

A decentralized business is based on each individual’s control of their digital belongings/assets in a decentralized environment. The business provides users tools to manage and benefit from their assets (including data).

We here briefly describe 8 fundamental modules that are necessary for the implementation of a decentralized business with Web3:

Identification

On-chain identity management

2. Asset registration

Assigning which asset belongs to whom. For example, an NFT or a token belongs to a wallet address. A digitalized asset belongs to a wallet address.

3. Encryption

Encrypting the asset and associated resources to prohibit unauthorized access.

4. Decentralized storage

Storing encrypted data in the WWW for permanent access.

5. Access control

Managing who can access.

6. AI Oracles & Oracles

Mechanisms to fetch data to and from blockchain networks in order to trigger smart contracts.

7. Wallet & Zero/low trust transaction protocols (preferably, cross-chain)

Making exchanges and earning from sharing assets.

8. Marketplace and DeFi platforms

Gaining royalty or passive income while participating in community activities.

Web3 development at Oraichain

Oraichain’s effort for Web3 is clear and continuous. We are designing and developing a strong framework as a template for decentralized business models. Besides AI Oracle mechanism which is our distinctive solution, we provide other modules for facilitating the following list of services:

Wallets: 3 wallets (Oraichain Wallet Mobile, Oraichain Wallet Extension, OWallet mobile)
Oracle: AI Oracles, VRF, pricefeed
Marketplaces: aiRight for NFTs, DINO Hub for Data and AI
Decentralized exchange: OraiDEX
DeFi tools: yai.Finance, Royalty protocol
DApps: Kawaiiverse
Developer tools: CosmWASM IDE

Future available:

Encryption
Registration
Decentralized storage
Access control

Parallel with building open-source technology, Oraichain also follows and integrates regulatory requirements in order to ensure a sound environment for Web-native generations.

So much is yet to be created to solve hard problems in trust, identity, and decentralized finance. Oraichain Labs as the project team behind Oraichain welcomes the community to build with us and develop a strong foundation for a new economic system. Everyone is welcome to raise a proposal to Oraichain at https://scan.orai.io/proposals?type=ParameterChangeProposal. Proposals discussions are welcome at https://commonwealth.im/oraichain/.