The Interplay Between Web 3.0 And Blockchain Technology -By Victoria Chiwendu Egbuna

INTRODUCTION

In recent times, there has been a paradigm shift in technology around the world. Migration from an innovation to an iteration of a better technological advancement has been the order of the day. Having innovated the web 1.0 which had its defaults, Web 2.0 was innovated to be the solution to Web 1.0. However, Web 2.0 met its confrontations which border on the fact that the web was being controlled by the “Big Tech”. Web 3.0 was borne out of the necessity for a free and decentralized distributed ledger where anyone could read, write, and own data.

Blockchain, on the other hand, is a distributed ledger that is decentralized and run independently of humans. It is a digital innovation where transactions cannot be manipulated by humans. It is transparent, reliable, trustable, and immutable. Blockchain is not only concerned with crypto coins. This innovation can be used in the banking sector, copyright, insurance, legal and other spheres. Blockchain and Web3 are frequently regarded as complementary technologies. Many people associate these buzzwords with cryptocurrencies and occasionally misunderstand them. Web3 is an ecosystem of interoperable, decentralized technologies that allows for transparent data management and storage, decentralized authorization, and much more. 

This article is bent on juxtaposing the interplay between Web 3.0 and Blockchain technology, the evolvement of Web 3.0, blockchain technology, types of blockchain technology, advantages and disadvantages of blockchain technology, and smart contracts. Blockchain technology is an emerging technology. The rate at which the ecosystem is going digital cannot be underrated. Before we delve into the concept of Web 3.0 we will examine how the world evolved from Web 1.0 to Web 3.0. 

CONCEPTUALIZING WEBS 1.0, 2.0 & 3.0 AND BLOCKCHAIN 

Web 1.0 – The Static Web

The earliest stage of the World Wide Web’s evolution is referred to as Web 1.0. This evolved between 1991-2004. The original intention of Web 1.0 was to make information public to anyone, there was zero interaction. Personal web pages were common, consisting mainly of static pages. There were no things such as authentication, comments, and analytics. Internet users were only consumers. This web version is sometimes called “read-only Web” because it lacks the necessary forms, visuals, controls, and interactivity we enjoy on today’s Internet.

Web 1.0 was made up of static pages connected to a system via hyperlinks. It made use of HTML 3.2 elements like frames and tables. HTML forms were sent through e-mail. The information originates from the server’s file system, not a relational database management system. It features GIF buttons and graphics. Web 1.0 was just a one-way communication. The challenges faced with Web 1.0 necessitated the iteration of Web 2.0.

Web 2.0 – The Social Web

Web 2.0, known as the social web is the second stage of the internet, it is described as the wisdom, people-centric, participative, and dynamic web. Web 2.0 started forming in 2004. Unlike Web 1.0, Web 2.0 allows more control over users, interactivity, social connectivity, and user-generated content. At this stage, the users not only consume but also interact and send information to the website. However, web 2.0 allows many users to interact, connect, participate, and contribute, but it is being controlled by few a people.

Users can retrieve and categorize data collectively by using Web 2.0’s free information sorting service. It includes interactive material that changes based on input from the user. Also, Application Programming Interfaces (API) that have been developed are utilized. Podcasting and other forms of interaction are permitted, and self-usage is encouraged.

The emergence of social networks and mobile Internet access have both significantly accelerated the growth of Web 2.0. The widespread use of mobile devices, such as iPhones and Android-powered gadgets, is another factor contributing to this boom. Furthermore, the development of Web 2.0 allowed apps from YouTube, Twitter, and TikTok to proliferate and take over the internet. The primary issue with Web 2.0 is related to the absence of data privacy in the sense that an intermediary holds complete authority. Web 3.0 was introduced to do away with the entire centralized programs and create a decentralized web where there is no intermediary.

Web 3.0 – Decentralized Web

Web 3, also known as decentralized web, is an idea for a new iteration of the World Wide Web which incorporates concepts such as decentralization, blockchain technologies, and token-based economics. Some journalists and technologists have drawn comparisons between it and Web 2.0, arguing that data and services are centralized in a small number of businesses sometimes known as “Big Tech.” Gavin Wood, a co-founder of Ethereum, first used the term “Web3” in 2014. In 2021, venture capital firms, major technology companies, and cryptocurrency enthusiasts began to show interest in the concept. In 2013, the ideas behind Web3 were first presented.

With the help of search and analysis, users can create, share, and connect content on the semantic web, where web technology is evolving. It is based on comprehension of words instead of numbers and keywords. It integrates machine learning and artificial intelligence. These ideas combined with Natural Language Processing (NLP) make a computer that leverages Web 3.0 to become more intelligent and user-responsive.

It affords the connectivity of a couple of gadgets and programs via the Internet of Things (IoT). Semantic metadata makes this manner possible, permitting all to-be-had statistics to be successfully leveraged. In addition, people can connect to the Internet anytime, anywhere, without needing a computer or smart device.

It offers users the liberty to interact publicly or privately without having an intermediary expose them to risks, therefore offering people “trustless” data. Without requiring permission from a governing body, it makes participation easier and is permissionless.

Web 3.0 Can Be Used For: Metaverses: A 3D-rendered, boundless, virtual world, and unlimited. Blockchain games: Users have actual ownership of in-game resources, following the principles of NFTs(Non-Fungitive Tokens). Privacy and digital infrastructure: The web includes zero-knowledge proofs and personal information is secured. It is trustworthy and reliable. Decentralized finance (DeFi): The web is used for payment Blockchains, peer-to-peer digital financial transactions, smart contracts, and cryptocurrency. It holds every record of transactions. Decentralized autonomous organizations: Ownership of online communities belongs to the members of the community. Web 3.0 will enable a wide range of decentralized applications, including decentralized finance (DeFi), decentralized social networks, and decentralized marketplaces. These applications will be built on blockchain technology and will be powered by smart contracts. The bottom line in Web 3 is that data is shared rather than owned. Web 1.0: The consumers read-only; Web 2.0: The consumers read, write, and access social media, etc.; Web 3.0: The consumers read, write, and own data. Web 3.0 is built on peer to peer network of computers as they talk to each other without a middleman. In a decentralized web, no single individual owns any data or anything. Everything is completely visible to the public. 

BLOCKCHAIN TECHNOLOGY

Technology has been defined by diverse ink. According to Black’s Law Dictionary, technology is defined as “Information application to design, production and utilization of services and goods and organizing human activities”. However, what is common in the definition of technology is the advancement or innovation of products or services.

What Is Blockchain? According to IBM, “Blockchain is a shared, immutable ledger that facilitates the process of recording transactions and tracking assets in a business network. An asset can be tangible (a house, car, cash, land) or intangible (intellectual property, patents, copyrights, branding). Virtually anything of value can be tracked and traded on a blockchain network, reducing risk and cutting costs for all involved.”

As the name implies, blockchain is a chain of blocks, these blocks are linked together by using cryptography. It can be considered a distributed digital ledger. Each block contains a cryptography hash of the previous block, a timestamp, and transaction data. Blockchain technology is not only related to crypto coins. All network participants have access to the distributed ledger and its immutable record of transactions. With this shared ledger, transactions are recorded only once, eliminating the duplication of effort that’s typical of traditional business networks.

TYPES OF BLOCKCHAIN TECHNOLOGY

There are majorly four (4) types of blockchain. They include;

1. Public Blockchain

A public blockchain is a permissionless, nonrestrictive, distributed ledger technology. Anyone with an Internet connection can sign up for a blockchain platform to become an authorized node and join the network. Public blockchains are available to everyone to participate in the blockchain process that is used to validate transactions and data. These are used in the network where high transparency is required.A public blockchain does not have any restrictions, it is completely involved in following the concept of decentralization. A public blockchain has its advantages. It is trustable in terms of identifying fraudulent activity. It is secured, and due to its large size, there is a greater distribution of records that are secured. It is anonymous in nature and decentralized.

However, the rate of transaction process is quite slow due to its large size. It consumes energy. No central authority is there so governments are facing the issue of implementing the technology faster. Traditional financial systems can be replaced by public blockchain technology, which is secured by proof of work or proof of stake. Bitcoin, Ethereum, and Litecoin are some examples of public blockchains. On these networks, any user can volunteer to operate as a node. These nodes are responsible for verifying transactions and maintaining a copy of the distributed ledger. smart contract that allowed this blockchain to support decentralization is its more sophisticated feature. Public blockchain can be used for voting and fundraising.

2. Private Blockchain

Private blockchains are managed by one central authority. This authority decides who is allowed to participate in the network, verify transactions, and maintain the shared ledger. Therefore, these networks are only partially decentralized as public access to these blockchains is restricted. In other words, it is centralized and limited. Only a specific institution of members is allowed to view and confirm transactions; this guarantees that untrustworthy people cannot get the right of entry to or benefit from the manipulation of the community. It is a permission-based blockchain that is used in a closed network.

Since private blockchains have a smaller community with fewer members, they may be less difficult to manage, go through much less downtime, and offer the most uptime. Also, there is the simplest critical authority, making it less difficult to obtain compliance necessities in the ecosystem. A private blockchain is typically utilized in an organization or within a company where few persons are allowed to participate in the network. It can be used to track and verify assets as well as Internet voting.

3. Hybrid Blockchain

Hybrid blockchain combines the features and benefits of private and public blockchain. In this network, only a portion can be made public, leaving the rest of the network data private. Building a private, permission-based system alongside a public, permissionlesssystegivesss businesses the flexibility to control which Blockchain data is made public and to whom. The benefit of this type of blockchain is security. 

By operating in a closed environment, hybrid blockchain keeps outside hackers from attacking the network in a 51 percent fashion. It also lowers expenses. In addition, it protects confidentiality while permitting communication with outside parties. The demerit of hybrid blockchain is its lack of transparency and less Incentive: Real estate, retailers, and highly regulated markets like the banking sector maximize this blockchain effectively. Examples of Hybrid Blockchain are the Ripple network and XRP token.

4. Consortium Blockchain

Just like the hybrid blockchain, consortium blockchain has both private and public blockchain characteristics. A creative approach that solves the needs of the organization. This blockchain validates the transaction and initiates or receives transactions; it is also known as Federated Blockchain. This is an innovative method to solve the organization’s needs. 

However, it is unique in that it involves the cooperation of several organizational members through a decentralized network. In a consortium blockchain, the consensus techniques are managed by predefined nodes. The initiator, recipient, and validator node of the system is in charge of these functions. Member nodes are capable of initiating and receiving transactions.

The first blockchain is the Bitcoin blockchain; in the world today, there are many blockchains, the recommended one for a beginner is the Ethereum blockchain. This is because there is a lot of technical support firm.

Smart Contracts

A smart contract is a software stored on a blockchain-based platform that automatically executes an agreement. Smart contracts are self-verifying, self-executing, and tamper-resistant. The self-execution of smart contracts is what makes it very important. Smart contracts are digital contracts stored on a blockchain that are automatically executed when predetermined terms and conditions are met. They are typically used to automate the execution of an agreement so that all participants can be immediately certain of the outcome, without any intermediary’s involvement or time loss. They can also automate a workflow, triggering the next action when predetermined conditions are met. In technical terms, a smart contract is immutable. It can be used for banking, copyright, insurance, and many other sectors.

Benefits Of Blockchain

No participant can change or tamper with a transaction after it’s been recorded in the shared ledger. If a transaction record includes an error, a new transaction must be added to reverse the error, and both transactions are then visible. It provides greater trust among users and provides greater security among data as well as reduces the cost of production. It improves speed, invocation, and tokenization.

Disadvantages Of Blockchain

Data modification is not possible due to transparency and lack of control by an individual or a group of persons. It requires large storage for a large database. The owner cannot access the private key again if they forget or lose it. These are the fundamentals of Web 3.0 and Blockchain.

THE INTERPLAY BETWEEN WEB 3.0 AND BLOCKCHAIN TECHNOLOGY

Web3 technologies are built on top of decentralized technologies such as Blockchain and distributed ledger technology. These technologies enable the creation of secure and transparent systems without needing a central authority or intermediary, which are key characteristics of Web3 technologies and equally those of blockchain.

The Web3 space offer several benefits, including decentralization, security, transparency, and privacy. They also offer increased security through Blockchain and distributed ledger technology. The interplay between Web 3.0 and blockchain technology includes;

Financial Technology

Web3 technologies can disrupt many industries, including finance, healthcare, education, supply chain management, and social networking. For example, with Web3 technologies, it is possible to create decentralized financial systems that allow multiple users to execute peer-to-peer data and finance transactions without needing a traditional bank to authorize the transaction. 

Decentralized Applications (dApps)

Decentralized applications (dApps) represent one of the main points of intersection between Web3 and Blockchain. These are programs designed to run on decentralized platforms like Blockchain, giving users the same kind of interaction with decentralized systems as they would with conventional online programs. Given that blockchain alters the structure of data in the web’s backend, it serves as the cornerstone of Web 3. Decentralization is the primary characteristic that establishes it as the basis for Web 3.

Security And Speed

Web3 and blockchain are essential components of the developing digital economy. By leveraging these powerful technologies, organizations may experience cost savings, faster transactions, enhanced security, and increased transparency. As blockchain offers cryptographic proof of a series of transactions, its use in Web3 is critical, particularly in terms of boosting trust among users. Technically speaking, Web3 is an assortment of blockchain-based protocols that aims to change the wiring of the internet’s backend.

Transparency

Web3 technologies and blockchain can create more transparent systems, allowing for the secure and transparent tracking of data and transactions. In addition, Web3 technologies enable greater privacy for users, as they do not rely on a central database that unauthorized parties could potentially access. Web3 technology, which creates transparent and safe online systems through the use of decentralized technologies, is closely associated with blockchain technology.

Smart contract

Blockchain and Web 3.0 both use smart contracts to automate the execution of agreements so that all parties can know for sure what will happen right away, without having to wait for a middleman or lose time.

Trustable

The Interdependence between the two technologies can be deemed significant as blockchain is the underlying technology on which Web 3.0 is built. With features like trustless payments, decentralized governance, cross-chain interoperability, and earning digital assets while playing games blockchain

Immutable

Its decentralized, immutable, and secure nature makes it the perfect fuel for building decentralized apps such as non-fungible token marketplaces, social media networks, and decentralized finance (DeFi) platforms.The architecture of Web3 is mostly built on the principles of decentralization, distributed computing, and peer-to-peer networking. That’s exactly why Blockchain is a key feature of the next generation of the internet.

ROLES OF LAWYERS

The emergence of Web 3 and blockchain technology has birthed a legal area of specialization that requires legal practitioners maximum attention. With the advancement in technology, the legal profession is not exempted as the law is not static, rather, it evolves as society evolves. The roles of legal practitioners in the world of blockchain technology and Web 3.0 are sine qua non and cannot be overemphasized, they include; Legal practitioners have an instrumental role in helping organizations navigate through complex legal aspects like intellectual property rights and privacy issues associated with blockchain. Lawyers are also proficient in drafting legally enforceable smart contracts. Educate clients on the legal implications of any transaction within the technology. Ensure regulatory compliance. Resolving disputes through the application of Alternative Dispute Resolution (ADR) or Litigation. 

LEGAL FRAMEWORK

Web 3 and blockchain technology present a number of legal issues that must be resolved. Determining jurisdiction and liability in the event of disputes or illegal activity on Web 3.0 is one of the major legal challenges. The decentralized and global nature of blockchain network makes it challenging to determine the relevant legal framework and to pinpoint the entity or person accountable for a given transaction or activity. 

Generally, there is no specific or primary enactment regulating the sector. However, to prevent cybercrimes and safeguard intellectual property rights such as patents, copywrites, trade secrets, and other irregularities, Legal practitioners can make use of subsidiary legislation. Section 4(1) of 1999 Constitution of the Federal Republic of Nigeria (As amended) provides that “The legislative powers of the Federal Republic of Nigeria shall be vested in a National Assembly for the Federation which shall consist of a Senate and a House of Representative.” This implies that the National Assembly has been empowered to make laws for the Federation. 

The subsidiary legislation governing Web 3 and blockchain technology are as follows. National Blockchain Policy 2023. Nigerian Finance Act. Copyright Act. Patent Design Act. National Information Technology Development Agency Act 2007. Securities and Exchange Commission (SEC) Rules on Issuance, Offering Platforms and Custody of Digital Assets. The Nigeria Data Protection Act (NDPA), 2023. Nigerian Startup Act, 2022. Cybercrimes (Prohibition, Prevention, etc) Act, 2015. The Money Laundering (Prohibition) Act, 2022. The Terrorism Prevention Act, 2012 (as amended);The Terrorism Prevention (Freezing of International Terrorist Funds and other Related Matters) Regulations, 2013; The Economic and Financial Crime Commission (Establishment) Act, 2004; The National Identity Management Act, 2017;The Finance Act (as amended each year).

____________

Victoria Chiwendu Egbuna is a penultimate law student at Federal University Wukari. She is an intern at J.A Abi & Co (Rapha Chamber), and she has completed several virtual internships with various law firms. She was also an Intern at the 6th edition of the Hilton Top Solicitor Female Internship program.  

REFERENCES 

1. J. Terra, “What is Web 1.0, Web 2.0, and Web 3.0? Definitions, Differences & Similarities” (2023) <https://www.simplilearn.com/what-is-web-1-0-web-2-0-and-web-3-0-with-their-difference-article> accessed 2 March 2024.

2. ¬“Evolution of Web: Web 1.o, Web 2.0 and Web 3.0 Explained” <https://www.gymaesthetics.com/blogs/live4well/evolution-of-web#:~:text=Web%201.0%20definition%20%E2%80%94%20The%20Static%20Web&text=At%20the%20time%20of%20Web,presence%20as%20today’s%20sites%20do> accessed 1 March 2024

3. F. Mark and J. Paulius, The Contested Meaning of Web3 and Why it Matters for (IP) Lawyers (January 27, 2022) <SSRN 4017790 or http://dx.doi.org/10.2139/ssrn.4017790> accessed 3 March, 2024.

4. H. Alford, “Crypto’s networked collaboration will drive Web 3.0” (2021)<https://en.m.wikipedia.org/wiki/Web3#cite_note-crunch-2> accessed 3 March 2024.

5. S. Scarpulla, B. Newman and D. Cass, “Blockchain, Smart Contracts, Crypto, and Web 3.0 for Business Lawyers” (2023) <https://www.americanbar.org/groups/business_law/resources/business-law-today/2023-may/blockchain-smart-contracts/> accessed 3 March 2024.

 6. ¬ “The Complete Guide for Types of Blockchain!” <https://www.simplilearn.com/tutorials/blockchain-tutorial/types-of-blockchain#types_of_blockchain> accessed 3 March 2024.

 7. A. Hayes, J.R. Brown and S. Kvilhaus, “Blockchain Facts: What Is It, How It Works, and How It Can Be Used” <https://www.investopedia.com/terms/b/blockchain.asp> accessed 3 March 2024.

 8. CNBCTV18.com “Private blockchain and their use cases” (19 July 2022)<https://www.google.com/amp/s/www.cnbctv18.com/cryptocurrency/blockchain-private-and-their-use-cases-14166142.htm/amp> accessed 3 March 2024.

 9.¬ “Types of Blockchain” <https://www.google.com/amp/s/www.geeksforgeeks.org/types-of-blockchain/amp/> accessed 3 March 2024.

10. IBM, “What are smart contracts on blockchain?” (2024) <https://www.ibm.com/topics/smart-contracts> accessed 3 March 2024.

11. Blockchain Council, “Understanding the interdependence of Web3 and Blockchain” (January 2024) <https://www.blockchain-council.org/web-3/understanding-the-interrelationship-between-web3-and-blockchain/#:~:text=One%20of%20the%20primary%20ways,similarly%20to%20traditional%20web%20applications.> Accessed 3 March 2024.

12. L. Rosencrance, “Understanding the Relationship Between Web3 and Blockchain” (Techopedia, June 2023) <https://www.techopedia.com/understanding-the-relationship-between-web3-and-blockchain#:~:text=The%20main%20feature%20that%20makes,of%20the%20emerging%20digital%20economy> Accessed 3 March 2024.

13. Magnus Mage (Pvt) Ltd “Interdependence of Web 3.0 and Blockchain” <https://www.linkedin.com/pulse/understanding-interdependence-web-30-blockchain-magnusmageltd?utm_source=share&utm_medium=member_android&utm_campaign=share_viaain> accessed 3 March 2024.

14. K. Ashwani, “Explaining the Relationship Between Blockchain and Web3” (April 2023) <https://www.devopsschool.com/blog/explaining-the-relationship-between-blockchain-and-web3/> accessed 3 March 2024.

15. RahulDev, “Blockchain Attorney Crypto Legal Compliance Job: Role of Blockchain Lawyers” <https://patentbusinesslawyer.com/blockchain-attorney-crypto-legal-compliance-job/#:~:text=They%20play%20an%20instrumental%20role,crafting%20legally%20enforceable%20smart%20contracts.> accessed 3 March 2024. 

16. Section 4(1) Constitution of the Federal Republic of Nigeria 1999 (as amended). 

 17. S. T Koleolu and C.S Okpo “The Regulation Of Blockchain Technology In Nigeria-Guidance For Businesses” (August 22, 2023) <https://www.mondaq.com/nigeria/fin-tech/1357396/the-regulation-of–blockchain-technology-in-nigeria—guidance-for-businesses> accessed 15 April 2024.