The Best Uses for Web3 in 2023

The idea of Web 3.0 doesn't just refer to the third generation of the internet. It also refers to a new class of use cases that may evolve with that third generation. These are use cases that won't just change how we communicate online, but how we experience life.

Like with all things tech, the dynamics of these use cases are changing as quickly as Web 3.0 is evolving. However, some Web 3.0 use cases are primed to be quite important in 2023, and this article will outline some of them.

DeFi

DeFi is the most important use case for Web 3.0 and was the reason the first blockchain code was written.

DeFi simply means decentralized finance and refers to a fully decentralized financial system that exists on the internet.

The primary assumption of DeFi is that centralized banking services are too dangerous — in terms of the vices it allows like inflation — and give too much power to a centralized entity. Of course, many would argue that DeFi is also just as dangerous — or even more dangerous.

DeFi's solution to this problem is to give everyone the power to be their own bank through the blockchain. In the past few years, a lot of networks — like Ethereum— have provided that exact service.

Now, people can be their own bankers on the Internet and never have to worry about the systemic issues of the centralized banking system.

However, DeFi isn't just about people owning their banks just like banks aren't just about deposits. DeFi extends to a lot of other financial ventures, and the ecosystem is currently creating the parallel of virtually every centralized banking service on the blockchain.

There are now DeFi lenders and even DeFi insurance providers. The one thing that all these services have in common is that they are decentralized. This means that data concerning them is transparent and hosted on a blockchain.

The amazing thing about this use case is that DeFi is solving all the legacy problems of traditional financing in one fell swoop.

It's solving the problem of cost by eliminating intermediaries. It is solving the problem of international transactions by powering Web 3.0 payments that are a lot faster than most bank payments.

It's also solving the problem of transparency by hosting relevant information on public ledgers that everyone can view. This means that if your financial partner is in a money bind, you could be the first to know.

Aside from providing a better parallel of the centralized banking system, DeFi is also introducing a new class of assets. NFTs, for example, are a new and unique asset class that allows enterprising artists to make money off of and market their art in a different way.

And as usual, this profit is transparent and decentralized.

However, for DeFi to work at a large enough scale, it needs to be a lot safer than it is right now. Thankfully, there is a new class of asset-oriented networks, like Radix, that are changing the way assets can move on a blockchain and the way smart contracts are created and executed.

Sovereign Identity

In recent years, Web 2.0 companies like Facebook and Google have had to face important questions about their privacy policies. The open secret about these companies is that they make money from selling the data that their users generate.

What this means is that anyone who uses these sites can have their data mined by a third party without their express approval. The Web 2.0 company doesn't even have to sell the data — they can just be hacked like anyone else.

This situation leads to thousands of people having their data stolen every year.

Web 3.0 puts a complete end to this state of affairs. For one, with Web 3 wallets, people don't even have to use passwords anymore. They can simply prove their identity through their wallet.

They can also store the data they submit to websites on decentralized encrypted forms. This means that hackers will have nothing to hack.

There are now exciting technologies like zero-knowledge proofs that allow Web 3.0 sites to prove that a certain statement is true without even knowing the statement. This means that sites can allow users to generate their passwords, without even knowing those passwords.

Decentralized Autonomous Organizations

Web 3.0 doesn't just democratize the internet; it also allows users to organize themselves democratically. And that's precisely what a DAO is.

A DAO is an internet community that allows anonymous people to donate to and participate in a project with minimal legal and financial roadblocks.

By leveraging smart contracts and crypto assets, DAOs can perform similar functions to become companies that invest in certain projects and share their profits.

The great thing about this sort of group is that anyone can join them from anywhere in the world. To replicate a similar arrangement in Web 2.0, users would have to pass through multiple financial and legal roadblocks that would distract from the main mission.

Web 3.0, on the other hand, allows people to organize themselves in whatever way they want without worrying about legal or financial implications. The public and transparent nature of these DAOs also means that their capacity for good is a lot higher than those of parallel Web 2.0 entities.

Gaming and The Metaverse

Web 3.0 isn't only about finance and identity. It can also be about fun and games. The main difference between a Web 3.0 game and a Web 2.0 one lies in how the backend of the game is structured, not in the front end of the game.

One of the biggest problems in gaming today is that players are beholden to large platforms that dictate the player's fortunes. They can delete accounts at will, kill beloved titles, and control in-game economics with absolutely no oversight whatsoever.

Web 3.0 solves that problem by applying the ideas of DeFi, DAOs, and Sovereign Identity to the backend of games. This means that Web 3.0 games are built on decentralized platforms where users have more autonomy.

DAOs mean that players can even contribute towards developing a game, and Sovereign Identity protocols mean that gamers don't have to be scared of hackers throughout the entire process.

Decentralized Social

The most visible example of Web 2.0 companies are the likes of Facebook, Twitter, and Instagram. These companies are also perfect examples of just how wrong things can go under a centralized ownership structure.

They suffer regular hacks, control data they shouldn't have any control over, and then sell insights from that data.

The problem with these companies isn't the front end that users engage with. Instead, the issues lie with the backend and the structure of information. Web 3.0 companies disrupt this by creating social media but with decentralized information pathways.

This means that users will always have complete control over their accounts.

Social media companies that leverage DeFi don't have to depend on selling user data or even advertising. They can raise money through alternative means and provide the highest level of security and safety for their users.

Of course, it's a tall order to ask present Web 2.0 companies to adopt this model. In fact, they probably won't. That's why Web 3.0 is just ripe for new and innovative projects built on Web 3.0 principles.

Conclusion

In the end, Web 3.0 is merely a new and beneficial way to organize information flow on the internet using the blockchain. That singular innovation is what gave birth to all Web 3.0 use cases, and it's the reason why these use cases will continue to get even more robust in time.

To learn more about these five use cases, read this report here: The Five Use Cases of Web3 that Will Dominate the Next Market Cycle.