The term Web3 is often used as shorthand for discussing the new phase of the internet. It describes leaving the era of centralized social media and large-scale e-commerce platforms, and arriving at a utopia where users control data. In a colloquial sense, Web3 is just an umbrella marketing term meaning anything adjacent to cryptocurrencies.

To clarify the topic, the Cointelegraph research team has released a new report detailing the true nature of Web3. These key insights are invaluable for investors in understanding facts versus fundamental misconceptions.

Blockchain Networks and Decentralized Networks

Cointelegraph Research’s “Web3: Marketing Boom or Technology Revolution?” draws a clear distinction between “blockchain networks” that integrate blockchain technology into the network and decentralized, permissionless and A trustless alternative to the internet.

Download this free report on the Cointelegraph research terminal.

Veterans of the crypto world will be aware of blockchain networks that facilitate the growth of non-fungible tokens, decentralized autonomous organizations (DAOs), and the GameFi ecosystem. Ideally, these ecosystems lack a central authority and value derives from the creation of scarce digital assets. The report reveals how blockchain technology can be used to extend these ecosystems into the real world and bring new efficiencies to traditional industries.

The decentralized web aims to break the current oligopoly of content delivery websites in the Web2 world. This goal is achieved by building a new network around the principles of decentralization that is permissionless (everyone can participate) and trustless (code so robust that it does not require third-party authorization).

Are we there yet? Do not.

There is still a long way to go to implement the idealistic principles of decentralization in blockchain networks and decentralized networks.

Blockchain networks are built on top of current internet infrastructure and require managed services to communicate between users and applications. Unfortunately, 60% of all these nodes on Ethereum are hosted on Amazon Web Services. This gives a centralized authority the power to shut down large parts of the entire blockchain network. The report revealed that even the DAO had problems with a small group of whales consolidating voting power and low user engagement.

Unfortunately, the decentralized web isn’t much better, but there’s reason to be optimistic. Right now, beset by monopolies like Google, Amazon, Meta, Apple, Microsoft, and Tencent, there are few decentralized ways for users to get online. However, alternatives using technologies like distributed hash tables are starting to make it possible to build decentralized versions of popular applications.

Cointelegraph Research Team

Cointelegraph’s research department is comprised of some of the best minds in the blockchain industry. Combining academic rigor with practical experience, the researchers on the team are committed to delivering the most accurate and insightful content on the market.

Dr. Demelza Hays is Head of Research at Cointelegraph. Hays has assembled a team of subject matter experts in finance, economics and technology to bring to market the premier source of industry reports and insightful analysis. The team utilizes APIs from various sources to provide accurate and useful information and analysis.

The opinions expressed herein are for general informational purposes only and are not intended to provide specific advice or advice to any individual or to any particular security or investment product.

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