The exponential growth of the internet over the last decade has been an astonishing phenomenon. At its inception, the internet used open protocols that established the basis for building the World Wide Web ecosystem. The first version of the internet, Web1, provided the foundation for developing some of the most popular web platforms and assets. In the second version, commonly referred to as Web2, closed protocols introduced centralization while surpassing open protocols in terms of features.

Now, the latest version of the internet, Web3, also known as the decentralized internet, has become a popular topic of discussion in the tech industry. The wide range of Web3 applications and uses cases is probably one of the main reasons why Web3 has attracted a lot of attention. Below, we will highlight some practical uses of Web3 in today’s world.

Top Use Cases of Web3 That You Should Know

The countless features of Web3 prove its capabilities for transforming the World Wide Web as we know it. Is Web3 just about bringing new UI/UX features in online services and applications? On the contrary, the top Web3 use cases paint a different picture.

Decentralized Autonomous Organizations (DAOs)

One of the main Web3 use cases is Decentralized Autonomous Organizations (DAOs). DAOs are basically online communities that are owned and governed by members of the community. The prominent characteristic of DAOs is the structure of governance that is based on the consensus of members. In fact, you can easily identify some main attributes of Web3 in DAOs like autonomy and decentralization.

A centralized entity or individual cannot change the rules of a decentralized autonomous organization. Moreover, DAOs enforce autonomy by relying on smart contracts to implement decisions and count votes. DAOs are a good Web3 use case example that has a lot of potentials to transform the internet.

Decentralized Finance (DeFi)

Another popular Web3 use case is decentralized finance (DeFi). This is a new innovation that is founded on the use of decentralized applications in finance and economics. Decentralized applications use a combination of smart contracts, commonly referred to as protocols, to define specific functionalities in the applications. The main benefit of decentralized in DeFi is that is valid and enforceable as long as the underlying blockchain infrastructure exists.

Moreover, decentralized applications created on open blockchain networks allow any computer in the network to participate. Currently, more and more people are choosing decentralized finance platforms over traditional financial institutions. For instance, DeFi has led to the development of crypto borrowing and lending, where crypto owners can get loans that are secured against their crypto holdings

Digital Infrastructure and Privacy

One of the main characteristics of blockchains or distributed ledger technologies is complete transparency. There is no shortage of Web3 applications that are dedicated to improving digital infrastructure and privacy. Technological advancements in cryptography, like zero-knowledge proofs, allow mathematical proofs of validity without disclosing sensitive data.

For instance, a person can prove to a website that they know the password to a certain user account without revealing the password to the websites. This means that a user’s password would never be saved on a website’s database.

These are just some of the many use cases for Web3.