If you are reading this, it means you have most definitely heard, read or looking to understand what is web3 and why is there alot of hype around it.
Jumping right in, I'll start by explaining web2 and contrast it with web3. Let's go!
Web2 is the version of the internet most of us know today. It focuses on giving users the capability to generate their own content and ease of use. This is refered to as internet of information. Sharing information has become an easy thing to do because of this. Information can be shared across large distance seamlessly, in the blink of an eye and this can be done by anybody (there's no access restriction to who can share information)
Web3 is an emerging version of the internet that focuses on internet of value. It is doing this by providing a decentralized interent. Yeah, its that buzzword you've been hearing but haven't really figured out what it means. It basically means an internet of interconnected devices where no one person or organizatin owns it, control it and can shut it off whenever they feel like.
Web3 promises to deliver an internet where value (tangible or non-tagible assets) can be shared as easily as you can share information (say an image).
Alot of web3 applications in its infant stage are focused on economy and finance. As we're moving to a digital economy and globalization, focus on technologies that provide: CONNECTINETY, ACCESSIBILITY AND INTEROPERABILITY is important
On a maco-economic level, countries need to have local currencies of all contries she transacts with. With web3 technology, this is no more needed, and this frees up large sum of cash and this could drive down the prices of goods (as liquidity is improved).
SETTLEMENT OF FUNDS.
Blockchain Technology and crypto-assets makes it easier to handle payments across borders instantly (or near instant) hence eliminating or replacing milddlemen.
ASSET TOKENIZATION
Buying and selling assets like stocks, bonds are complex. (banks, brokers, clearing houses etc.) web3 simplifies the process by tokenizing these assets on the blockchains. Real world assest such as houses, arts can also now be tokenized
LENDING
Lending using traditional banks is with high interest rate (because of monopoly) and complicated. DeFi (Decentralized Finance) is now operating in the lending sector. It allows any one to borrow and lend money in simple, secuse and inexpensive way with no restrictions.
TRADE FINANCE
Web3 now streamlines trade finance by making internationl trade accurately track goods. across the world, provicle a higher level of transparency through a shared ledger.
SAFER AGREEMENTS.
Contracts exists to protect indviduals and businesses when they enter into an agreement, but this comes at a cost as it requires lots of manual work by legal experts. Smart Contracts on a blockchain can automate this agreements in an immutable public ledger
DATA INTEGRETY AND SECURITY
web3 enables streamlined processes that automate data verification and reporting, digitize KYC/AML data. This reduces risk of fraud and decrease cost of handling data for financial institutions.
Nit: The potential benefits of web3 are more than just economic or financial.
Decentralization is the key component of web3. This is currently achieved with Blockchain or DAG (Directed Acyclic Graph) or Hashgraph. The blockchain technology is mostly used of these three.