WEB3: THE GOOD, BAD AND THE UNICORN

by Priya Gnanasekaran , Vice President Of Security Engineering at Goldman Sachs

In recent years the term Web3 has become a buzzword in the tech world. It refers to the decentralised web which promises to transform the way we interact with the internet. However, with every new technology comes new challenges, and Web3 is no exception. In this article, we’ll explore the good, the bad and the unicorn of Web3.

The Good

Let’s start with the good news. Web3 is all about decentralisation, which means data and applications are spread out across a network of computers rather than being stored in a central location. This approach has several advantages. First, it eliminates the need for intermediaries like banks or social media platforms, which can be slow, expensive and prone to censorship. Instead, users can interact directly with each other, making transactions faster and cheaper.

Second, Web3 is built on blockchain technology, which provides a high level of security and transparency. Blockchain is a decentralised ledger that records every transaction in a public database. Once a transaction is recorded it cannot be changed or deleted, making it tamper-proof. This makes Web3 ideal for applications like voting where trust and transparency are essential.

Finally, Web3 is designed to be open and accessible to everyone. Unlike the current internet, which is dominated by a few tech giants, Web3 is a level playing field. Anyone can create an application or service and anyone can use it. This has the potential to democratise the internet and give power back to the people.

The Bad

Now for the bad news. Web3 is not without its challenges. The first challenge is scalability. Currently, most Web3 applications run on the Ethereum blockchain, which can only process a limited number of transactions per second. This means that, as more people use Web3, the network will become slower and more expensive. To overcome this developers are working on new blockchains and scaling solutions that can handle more transactions.

The second challenge is user experience. Web3 applications can be complex and confusing for nontechnical users. For example, to use a decentralised exchange like Uniswap you need to connect a wallet like Metamask to your browser, which involves several steps and can be intimidating for beginners. To make Web3 more user-friendly developers are working on new interfaces and tools that hide the complexity and make it easier to use.

The third challenge is security. While blockchain technology provides a high level of security, Web3 applications can still be vulnerable to hacks and attacks. For example, in 2020, the decentralised finance (DeFi) platform, bZx, was hacked, resulting in a loss of $350,000. To address this, developers are working on new security protocols and best practices to make Web3 more secure.

The Unicorn

Finally, the unicorn. Web3 has the potential to create a new internet that is more open, transparent and secure. It could revolutionise industries like finance, healthcare and social media, creating new opportunities and disrupting old business models. However, to realise this potential we need to overcome the challenges and build a robust and scalable infrastructure that can support the growth of Web3.

So, what does the unicorn look like? Imagine a world where you can vote in elections from your smartphone knowing that your vote is secure and tamper-proof. Imagine a world where you can invest in startups from anywhere in the world without having to go through intermediaries like venture capitalists. Imagine a world where you own your data and can decide who has access to it.

Decentralised finance (DeFi) is just one example of how Web3 could shake up the finance industry and provide more opportunities for innovation and entrepreneurship. DeFi is a financial system built on blockchain technology. It allows peer-to-peer transactions without the need for intermediaries such as banks. This gives users greater control over their finances and reduces the potential for fraud. www.linkedin.com/in/priyacyber

In conclusion, Web3 is a significant step forward for cybersecurity and data privacy. Its focus on security and privacy combined with its potential to disrupt industries and create a more democratic and transparent online ecosystem make it a technology worth exploring.

However, as with any new technology, Web3 comes with its own set of challenges, including its lack of standardisation, scalability issues and regulatory uncertainty. It is essential to approach Web3 with caution and take steps to mitigate potential cybersecurity risks.

As the world of Web3 continues to evolve it will be critical to keep cybersecurity and data privacy at the forefront of our minds. By doing so we can fully realise the potential benefits of this ground-breaking technology while minimising potential risks.