What is Web3?

Imagine using different apps with the same digital wallet, without creating a new account each time. And instead of a digital item existing only in one company’s database, its ownership is recorded on a shared network. That’s one of the core ideas behind Web3.

In so-called Web2, platforms usually manage the accounts, the data and the access rules. Web3 apps move part of this function onto the blockchain, a shared ledger maintained by many computers. They also use smart contracts, meaning programs that execute predefined rules on the network.

For example, in a decentralized app (dApp) for swapping tokens, you connect your wallet and approve a transaction. The smart contract carries out the swap, instead of a company recording the transaction solely in its internal system. Using the network may come with a fee.

Why it matters

If you own crypto, Web3 connects your wallet with services such as decentralized finance (DeFi), NFTs and blockchain games. The same digital asset can be used in more apps, as long as they support it. It doesn’t automatically become useful everywhere.

We consider it essential that users can keep control of their keys and publicly verify transactions. That doesn’t mean, however, that every Web3 service offers full privacy or genuine decentralization. Web3 is a broad term, not a single product or a new version of the internet that replaced the previous one.

What to watch out for

Connecting a wallet is not the same as approving a token transfer. A malicious signature or token approval can let third parties move your assets. Check exactly what the app is asking for and never give out your seed phrase.

There are also smart contract bugs, scams and dependencies on centralized infrastructure. An app may be marketed as Web3 while its team keeps the power to change critical rules. The label alone doesn’t guarantee security or user control.