Web3 is the next version of the internet as it uses blockchain to give users control over their data and assets. There are no middlemen so transactions happen directly between users using cryptocurrencies and smart contracts. This makes the internet more open and decentralized.
In this guide, we’ll focus on how crypto drives this change.
But first of all, let’s see how the internet evolved. So, we can connect the dots to understand what is Web3 in Crypto.
How Did the Internet Evolve?
The internet changed in phases. Each phase redefined how people used it. Web1 allowed reading. Web2 enabled interaction. Web3 introduces ownership.
So, you must understand this timeline before jumping into Web3.
Web1: The Read-Only Web
Web1 marked the first public version of the internet, often referred to as the “static web.” This phase, which spanned from the early 1990s to the early 2000s, was characterized by one-way communication.
It was a static, read-only version of the internet where users could only consume information but had no role in creating or interacting with it. It laid the foundation for the internet, but it was largely closed and limited in scope.
Internet users could visit a site, read what was there, and leave. They couldn’t post or comment. Because content came from publishers, not users. Most websites looked basic—just text, links, and maybe a few images.
There were no likes, no shares, and no timelines. No search engines at first. No chatrooms unless you used IRC. You visited a page the same way you’d read a flyer pinned to a wall.
Consider it like this: companies built the web and you just used it. It was simple but closed because you were a reader, not a participant.
Web2: The Centralized Social Web
Web2 changed everything when it began in the early 2000s. The internet became interactive. Users could write, post, comment, and share. So, that’s how weblogs, social media, and forums reached their peak. Even platforms like Facebook, YouTube, and Twitter allowed users to create and share content.
The web shifted from static to dynamic. But control didn’t stay with the users.
Big tech companies took over as they stored user data, tracked their behavior, and even sold ads against your activity. In fact, users needed permission to access services of each business site. This is what led internet users to give up privacy for convenience. The web became a business. People created the content, but platforms owned it.
In short, it’s like that Web2 gave users a voice but then charged rent for using it.
Web3: The Read, Write, and Own Revolution
Web3 wants to give the internet back to you. It uses blockchain to shift control from platforms to users. You can read, write, and own. Data lives on decentralized networks. No single company controls your identity. You keep your wallet, your tokens, your keys. You vote on changes. You earn from your activity.
Tokens have replaced ads and smart contracts have replaced middlemen. NFTs, DAOs, and DeFi open new ways to build, trade, and govern.
We can say that Web3 promises digital freedom. It rewards users, not just shareholders. But it’s early. Tools are clunky. Risks are real.
Still, Web3 challenges the system—by letting you own your corner of the web.
Web4: The Symbiotic Web
Web4 represents the next stage in internet evolution, integrating AI, machine learning, and ubiquitous connectivity to create a seamless, intelligent digital ecosystem.
It moves beyond Web3’s decentralization by incorporating predictive technologies that anticipate user needs, offering personalized experiences in real-time. AI and ML will enable systems to understand user behavior, providing smarter and more intuitive interactions across various platforms.
The hallmark of Web4 is its ubiquitous connectivity, which is powered by technologies like 5G, IoT, and edge computing. Only to ensure that users are always connected, facilitating real-time interactions between smart devices and systems.
The internet will become fully integrated into everyday life, allowing for continuous engagement at home, on the go, or through wearable technology.
In fact, Web4 will extend decentralized systems from Web3, all while enhancing privacy, identity management, and secure communication. Blockchain technology will ensure that users retain control over their personal data, even as they engage with more advanced, AI-driven systems. This decentralization combined with smart systems will ensure that privacy and security are maintained while enhancing user experiences.
Finally, Web4 will introduce human-machine collaboration. AI systems will work alongside users, not just by executing tasks but by understanding context and adapting to needs. We’ll see how it enable immersive experiences using AR/VR, and real-time decision-making in areas like autonomous vehicles and healthcare systems. All that makes technology more intuitive, responsive, and connected to the physical world.
So, What is Web3 in Crypto?
Web3 in crypto is the next phase of the internet. It shifts power from centralized platforms to individual users.
It’s simple to say that Web3 in crypto refers to a blockchain-powered internet where users own digital assets, access decentralized apps (dApps), and interact through crypto wallets instead of centralized platforms.
So, in Web2, platforms like Instagram or Twitter own your data and control how it’s used. You create content, but they profit from it. Web3 changes this. Here, you own your data through tokens. You interact with decentralized apps (dApps) directly, using crypto wallets instead of relying on a central platform.
Let’s take Uniswap as an example. It’s a decentralized exchange. You don’t need a broker or a company. You connect your wallet, swap tokens, and the blockchain handles everything.
Or let’s consider OpenSea, where NFTs (non-fungible tokens) represent digital art or game items. Traders buy, sell, or trade directly on-chain.
Web3 in crypto shifts control from companies to users—using smart contracts, digital currencies, and public blockchains.
Features of Web3 in Crypto
Web3 in crypto comes with several key features that set it apart from previous iterations of the internet. Each feature empowers users by providing greater control, privacy, and ownership over their digital lives:
- Decentralization
In Web3, control is distributed across a network of computers, rather than being held by a single entity or company. This decentralization means there’s no central authority dictating rules or controlling data. Instead, power lies in the hands of the users, who interact directly with platforms using blockchain technology.
For example, Uniswap allows users to trade tokens directly on a decentralized network, without the need for a centralized exchange.
- Ownership of Data and Digital Assets
Unlike Web2, where platforms own your data, Web3 allows you to own your data and digital assets. This ownership is made possible through cryptocurrencies and non-fungible tokens (NFTs). With Web3, you can hold and transfer assets like digital art, game items, and even real estate, all recorded on the blockchain.
For instance, on OpenSea, NFTs representing art or in-game assets are owned directly by users, allowing them to trade and control their digital creations.
- Smart Contracts
Smart contracts are self-executing agreements that run on the blockchain. They automatically execute actions when certain conditions are met, removing the need for intermediaries. In decentralized finance (DeFi) platforms like Aave or Compound, smart contracts allow users to lend, borrow, or earn interest on their assets, all governed by code.
This ensures transparency and trust while eliminating third-party involvement.
- Cryptocurrency as Native Payments
Web3 uses cryptocurrencies as the primary means of exchange. Digital currencies like Ether (ETH) and Bitcoin (BTC) allow for fast, secure, and low-cost transactions without relying on traditional banking systems.
So, these cryptocurrencies enable users to participate in a decentralized economy, paying for goods, services, and even interacting with smart contracts, all without a central authority.
- Permissionless and Trustless Interaction
Web3 allows permissionless access: anyone can participate without needing approval from a central entity. It’s major benefit is that it creates a more open and inclusive environment.
It’s also trustless—which means users don’t need to trust a middleman to process transactions. Instead, they rely on blockchain technology and smart contracts to ensure that transactions are secure and transparent.
So, it’s lending on Compound or trading on Uniswap—users can interact with the system directly, with the blockchain ensuring trust without the need for intermediaries.
- Privacy and Security
Web3 emphasizes enhanced privacy and security. Through crypto wallets, users have control over their own private keys, which secure their digital assets and data. Transactions on the blockchain are cryptographically encrypted, which makes it much harder for malicious actors to tamper with or steal information.
So, Web3 platforms use decentralized networks to ensure that no single party has access to users’ personal data.
- Interoperability
Web3 platforms are designed to be interoperable, meaning they can easily communicate with each other across different blockchains and networks. This feature enables the seamless transfer of assets and data between dApps, creating a smoother and more efficient user experience.
For example, assets from one dApp can be used on another without requiring manual intervention or intermediaries.
- Governance and DAOs
Web3 incorporates decentralized autonomous organizations (DAOs), which allow users to participate in the governance of platforms or projects. DAOs give token holders the power to vote on key decisions, such as protocol changes or new feature implementations.
This participatory model ensures that Web3 projects are community-driven, with decisions made by the people who actively use and contribute to them.
Why Crypto and Web3 May Never Be Mainstream?
So, if you head over to Reddit or other major formus and platforms, you’ll see a lot of people discussing the very real barriers that stand in the way of crypto and Web3 becoming something that everyone uses.
For example, in a post titled “Crypto and Web3 will never be mainstream,” a Reddit user points out that in its current form, crypto—especially things like cold wallets and hot wallets—is just too complicated for most people. I mean, we’re talking about managing private keys, understanding gas fees, and navigating complex user interfaces.
It’s a lot for someone who’s just trying to make a simple transaction, right? Even platforms like Binance, which are considered user-friendly in the crypto world, still need a bit of technical know-how, and that’s something a lot of people just aren’t ready to tackle.
Then, there’s this interesting comparison someone made between crypto and gold. Now, stick with me here—while gold is still valuable, most people don’t buy it physically. Instead, they go for things like gold-backed ETFs because they’re easier to deal with. The Reddit user says that crypto could end up following a similar path—used behind the scenes in things like ETF-style investments but not something regular people are actively involved in.
You’re not physically holding it or managing it. It’s more like the infrastructure of the financial world, rather than something everyone uses day-to-day. Maybe Web3 and crypto will just stay as backend tech, like a hidden engine driving things rather than a mainstream product.
Now, when it comes to Web3, one of the biggest hurdles is the user experience. Think about the early days of the internet—how clunky and difficult it was to use. Fast forward to today, and websites are much smoother and easier to navigate. Web3, though, is still working on that smoothness. Most of the decentralized apps (dApps) are pretty rough around the edges. To really use them, you need to understand how to manage wallets, sign transactions, and, frankly, it can feel like you’re dealing with a lot of extra steps.
But let’s not lose hope yet! A lot of people are still optimistic, and they’re drawing comparisons to the early days of the internet.
Here’s another thing, though—there’s also the possibility that Web3 and crypto might not need to be mainstream in the way we think. Instead of being something people interact with directly, it could just power the back-end of all kinds of services. Look at how blockchain is already being used by big companies like JPMorgan for Ethereum-based projects. Most people don’t even know that blockchain is at play behind the scenes. In the future, crypto and Web3 might become part of the infrastructure of our digital world, and we won’t even realize we’re using it.
What are the Challenges of Web3 in Crypto?
Web4 in Cyrpto might not be for everyone just yet. There are serious barriers to adoption—complexity, user experience issues, and just the fact that most people don’t want to deal with the technical side of things.
- Scalability issues slow down transactions and raise fees
- Onboarding is hard for beginners unfamiliar with wallets or seed phrases
- Security risks include smart contract hacks and phishing scams
- Regulation remains unclear across many countries
- Public blockchain data creates privacy concerns for users
- High gas fees make everyday use expensive
- Many Web3 tools lack user-friendly interfaces
- Centralized platforms still dominate key infrastructure
- Token value is volatile and often driven by hype
- Permanent transaction records leave no room for mistakes
Is Web3 the Real Future of Crypto?
Web3 has been showing up in headlines, startup decks, and crypto memes. Right? But the majority of critics call it a buzzword because they see hype, not substance. It’s like: big promises with little proof.
We have seen many Web3 projects fail as quickly as they are launched. Even some are cash grabs. Others are clones.
Still, Web3 isn’t empty. Real tools exist. For instance, Ethereum powers thousands of decentralized apps. NFTs unlocked new creator economies. DeFi offers loans, swaps, and staking without banks. DAOs raise millions and vote on-chain.
So, it’s clear that Web3 may be early and clunky. But like the internet in the ‘90s, it’s building something. It may not be perfect—but it is definitely not fake.
What’s the Bottom Line?
Web3 reshapes how people use crypto. You don’t simply hold coins. You use them to trade, vote, earn, or build. It gives users more control. It cuts out middlemen. It opens access to apps, games, and finance without banks or borders.
Still, the road is messy. Scams, crashes, and weak regulations hold Web3 back. The tech is real, but adoption is slow.
In short, Web3 is a shift in how crypto works and we’ll soon see how remarkably it shapes everything.
