Science and Technology > IT & Computers > Communication technology
- As per FICCI-EY's 2022 report, Web 3.0 and blockchain can add a staggering $1.1 trillion to India's GDP by 2032.
WHAT IS WEB 3.0?
- Web 3.0 is used to describe a potential next phase of the internet.
- It is a decentralised internet to be run on blockchain technology, would be different from the versions in use, Web 1.0 and Web 2.0.
- In web3, users will have ownership stakes in platforms and applications unlike now where tech giants control the platforms.
- Three key pillars of Web 3.0:
- Blockchain that enables ‘decentralisation’.
- Artificial Intelligence (AI) and Machine Learning (ML) that help to sort data intelligently to offer the best choices to a user.
- Internet of Things (IoT) that adds interoperability, connecting the Internet to smart devices in homes and workplaces.
- Web3 is in its very initial days and there is no consensus if it will take off like Web 1.0 or Web 2.0 did.
WEB 1.0 AND WEB 2.0:
- Web 1.0
- Web 1.0 is the World Wide Web or the internet that was invented in 1989. It became popular from 1993.
- Web 1.0 is considered the first phase, where most of the web accessible to people was Read-only, allowing users to simply read content and not really interact with it.
- This included content like news sites, portals and search engines.
- The entire web around this time was essentially like one large website with multiple pages all hyperlinked into one another.
- Web 1.0 lasted until 1999.
- Web 2.0
- Web 2.0 started in some form in the late 1990s itself though 2004 was when most of its features were fully available.
- It is still the age of Web 2.0 now.
- The differentiating characteristic of Web 2.0 compared to Web1.0 is that users can create content.
- They can interact and contribute in the form of comments, registering likes, sharing and uploading their photos or videos and perform other such activities.
ADVANTAGES OF WEB 3.0:
- Decentralized and fair internet:
- As we move towards Web 3.0, one major trend is expected to be decentralisation.
- This is basically a concept that takes power and/or control away from a single person or body, and gives it to the masses.
- Web 3.0 enables peer to peer transaction by eliminating the role of the intermediary.
- A good example of this is cryptocurrency, which is essentially decentralised currency that is not governed or monitored by a single government.
- Ability to decentralize corporate hierarchical control:
- Web 3 has the ability to decentralize corporate hierarchical control in favour of community ownership of businesses.
- With decentralized autonomous organizations, or DAOs all customers have a role in decision-making.
Decentralized Autonomous Organization (DAO):
- The spirit of Web3 is Decentralized Autonomous Organization (DAO) which is that all the business rules and governing rules in any transaction are transparently available for anyone to see and software will be written conforming to these rules.
- Crypto-currency and block chain are technologies that follow the DAO principle.
- With DAO, there is no need for a central authority to authenticate or validate.
- Less chance of an internet service outage:
- Web 2.0 services, for instance, may crash when the servers of a particular platform go offline at the headquarters.
- This, however, wouldn’t be possible with a Web 3.0 platform that essentially is run by everyone using it, in multiple, simultaneously updated copies via a P2P (peer-to-peer) network, like torrents.
- Quicker and more convenient transactions:
- Web 3 will allow for quicker and more convenient transactions.
- For example, at present the borrowers must go through the time-consuming mortgage application procedure that, which mainly relies on human judgement.
- This procedure gets quicker and more equitable in a web-3 world. Borrowers only need to link their wallets, and an algorithm may then instantaneously respond with "yes" or "no" based only on their financial profile and blockchain-based transaction history.
- Supports the digital assets and other block chain based tech:
- Blockchain would be a big element of Web 3.0.
- Blockchain, the backbone of cryptocurrency, is also key to how ownerships of digital assets will be verified and validated in the years to come.
- Just like NFTs (non-fungible tokens) other blockchain-based tech is expected to come up, where only verified content owners will gain monetary benefits of assets, and not middlemen.
Non-fungible tokens (NFTs):
- Connectivity and ubiquity:
- With Web 3.0, information and content are more connected and ubiquitous, accessed by multiple applications and with an increasing number of everyday devices connected to the web—one example of which is the Internet of Things.
WHY WEB 3.0 IS IMPORTANT FOR INDIA:
- Potential to contribute to GDP:
- According to estimates, Web 3.0 has the potential to contribute over $1 trillion to the Indian GDP by 2031.
- With over 845 million internet (out of 4.95 billion users globally) and 518 million social media users in 2021, and increasing base rapidly, India is the second-largest internet user in the world.
- India’s strong ecosystem:
- According to reports, global investors have agreed to spend millions of dollars on Indian Web 3.0 start-ups, citing India’s strong ecosystem of 4 million engineers, experienced tech operators, and a well-knit web 3.0 community.
- India has been a frontrunner in IT & Software:
- India has been a frontrunner in IT & Software, and right now, global investors are investing huge capital in Indian-made crypto and blockchain ventures.
- Web 3.0 in India can simultaneously flourish with the right people (founders), investments and the policy.
- Early adoption of Web 3.0 in India:
- India has been one of the early proponents of Web 3.0 technology.
- It was also ranked first in terms of global crypto adoption, according to a survey conducted by Finder, a global research platform, in July 2022.
- Additionally, according to the Cryptotech Industry in India 2021 report by NASSCOM and WazirX, India is home to more than 230 Web 3 start-ups already.
THE DRAWBACKS OF WEB 3.0:
- Increase in Cyber Crimes:
- According to some experts, regulating Web 3 would be difficult.
- They further claim that decentralisation can bring new types of cyber-crime in the picture. It might lead to an increase in cyber-crime and online abuse, among other things.
- For example, Cryptocurrency-based crime remains a significant issue to address, especially given that rising overall transaction volumes mean the value of illicit transactions is increasing.
- Ambiguities in the regulatory framework:
- The regulatory space for Web3 and crypto industries is still evolving.
- Government of India, with the introduction of tax reforms (the budget imposed a 30% tax on income from virtual assets), has recognized the industry as a mainstream sector which is positive development for the sector but a clear regulatory framework for it is still awaited.
- On a global scale too, many countries are yet to warm up to space and have clearly defined protocols for it.
- Requirement for a stronger platform:
- Web 3 won't work on devices with lower tech levels.
- Web 3 will require a faster processing unit.
- Older devices won't be able to use Web 3. Upgraded devices with superior specs are required.
- Existing businesses based on apps and websites will need to adapt to Web 3, and investment will be required to be relevant in the competitive markets.
- Web 3 can be difficult for novice users to comprehend and use.
- The government should acknowledge the potential of Web 3.0 and should empower startups, small digital businesses, and consumers, and should create an enabling environment to help realise such potential.
- To begin with, MeitY can lay down overarching principles for governing 3.0, with a focus on self and co-regulation, given that any rigid law is likely to be outdated soon. Knee-jerk reactions such as outright bans should be avoided, and nuanced risk-based regulations will be essential.
Q. Discuss the benefits and drawbacks of the web 3.0 technology and explain why it is important for India.