What is Web3? Understanding the core logic and development opportunities of the new Internet era

Conceptual Confusion and the Resulting Cognitive Crisis

The term “Web3” has been widely misused in recent years, with almost every emerging project claiming to be part of it, leading investors into a recognition dilemma. To understand what Web3 truly is, we need to trace back to its technological essence and developmental evolution.

The Dual Definitions of Web3

There is no complete consensus in the industry about what Web3 actually is. However, the statements of two key figures are worth noting:

In the 1990s, Tim Berners-Lee, the creator of the World Wide Web, envisioned that users should control their own data and have full ownership rights.

Gavin Wood, co-founder of Ethereum, interprets Web3 from another perspective: it should be a network protocol that resists censorship, opposes monopolies, and has low barriers to entry, capable of reliably protecting user information.

From a technical standpoint, what is Web3? It is the third-generation internet based on blockchain as its core foundation. Compared to the previous two generations, the most fundamental shift in Web3 is—users upgrade from being information recipients or content contributors to true owners of data and assets.

Web3 Inherits All Characteristics of Blockchain

Since Web3 is built on blockchain technology, it naturally possesses all the attributes of blockchain: decentralized operation, immutable data, complete transparency of information, traceability of transactions, permissionless mechanisms, and trustless intermediaries. These features fundamentally change the power structure of the internet.

Why Do We Need Web3: Solutions to Real-World Dilemmas

Imagine a content creator publishing works on a social platform, accumulating followers, and monetizing through advertising—seemingly mutually beneficial cooperation, but with underlying contradictions:

• Who owns the rights to the content published by the creator?
• How are platform advertising revenues distributed?
• Will user identity information be leaked or misused?

These questions reflect the core pain points of centralized platforms—data oligopoly, risks of centralization failures, and frequent privacy breaches. The mission of Web3 is to use blockchain, smart contracts, and other tools to achieve data security, property protection, and privacy control rights.

In short, Web3 aims to solve systemic issues left over from Web1.0 and Web2.0: eliminate unnecessary intermediaries and restore rights originally belonging to users back to them.

Without this transfer of power, platforms will ultimately face difficulties—users who lose trust will leave, making the ecosystem unsustainable. This results in losses for both sides.

The Evolution Logic of the Three Generations of the Internet

The development of the internet in three stages shows distinctly different architectures:

Web1.0 Era (1990-2004)
User Role: One-way information receiver, only able to read content
Identity Management: No unified identity system
Economic Model: Lacking clear monetization mechanisms
Technical Foundation: Static HTML web pages
Data Control: Owned by website operators

Web2.0 Era (2004–Present)
User Role: Read-write, becoming UGC content creators
Identity Management: Username-password systems
Economic Model: Dominated by advertising revenue
Technical Foundation: Dynamic HTML and various applications
Data Control: Controlled by centralized platforms

Web3.0 Era (2014–Present)
User Role: Read, write, own, becoming asset owners
Identity Management: Decentralized identity protocols
Economic Model: Cryptocurrency and token incentives
Technical Foundation: Blockchain, smart contracts, AI, etc.
Data Control: Fully autonomous by users

This evolution reflects the shift of the internet from “information democratization” to “ownership democratization.”

The Ecological Relationship Between Web3 and Related Concepts

Blockchain forms the underlying technological foundation of Web3. Concepts such as cryptocurrencies, NFTs, the Metaverse, and DeFi are applications built on Web3—they all aim to achieve the same goal: enabling users to have complete ownership of their data, assets, and identities.

The relationship between technology and applications:

• Blockchain = Underlying infrastructure
• Web3 Vision = Application framework
• Cryptocurrency = Economic incentive tool
• NFT = Digital asset rights confirmation tool
• DeFi = Decentralized financial services
• Metaverse = Immersive application scenario of Web3

In short, Web3’s goal of full ownership restitution relies on blockchain technology and is driven by innovative tools like cryptocurrencies and NFTs.

Opportunities Distribution in the Web3 Investment Track

The Web3 sector exhibits cross-characteristics with NFT, data storage, infrastructure, and other fields, forming a comprehensive ecosystem.

According to market data, the total market cap of Web3 is approximately $23 billion, accounting for 2.18% of the global crypto assets, ranking in the middle among various sectors. There are over 200 related projects, with notable ones including Polkadot(DOT), Chainlink(LINK), Filecoin(FIL), ApeCoin(APE), etc.

However, numerous projects do not imply equal investment opportunities. Many remain at the conceptual stage without substantial progress. Truly noteworthy projects are those that address core needs and have tangible results—such as DOT solving cross-chain infrastructure, Chainlink providing oracle services, and Filecoin improving distributed storage. These projects have built deep moats, maintaining resilience in bear markets and potential for explosive growth in bull markets.

Rational Evaluation of the Future Prospects of Web3

The concept of Web3 has been proposed for a long time, but systematic development has only just begun, and its relatively small scale is understandable. The industry does not rule out the possibility of short-term speculative bubbles—similar to the early AI boom, which experienced rapid hype followed by capital withdrawal.

But this does not negate the long-term value of Web3. Its goal is not to create false needs but to address real dilemmas in everyday life. Although current results have not yet met expectations, the development direction and trend of Web3 are inevitable.

Therefore, for participants optimistic about this track, a rational strategy is to allocate assets appropriately and control risk exposure. The answer to what Web3 is will ultimately be tested by market practice.