From Web2 to Web3: What technical improvements are needed?

Web1, Web2, Web3: What's the difference?

Web1 was the Internet in the 1990s and early 2000s. At the time, the Internet was a read-only directory of static HTML pages. User-to-user interaction is limited.

The era of Web2, also known as the read-write network, began around 2004 and is still the most relevant Internet generation in 2019. It consists of social media sites, blogs, and online communities that allow end users to interact and collaborate with each other anytime, anywhere.

Compared to Web2, Web3 is more difficult to define. In large part, this is because the era of Web3 is still in its infancy. Ethereum is Web3's leading blockchain network and was not launched until 2015. In 2019, many technologies are still being developed or improved to make the Web3 experience practical for end users.

Nonetheless, some key attributes are often considered to be the new era of the Internet. For example, Web3 aims to provide a more user-centric experience in an intermediary read-write network. Technology enables individuals to control data privacy and data ownership by default. Web3 also introduces a decentralized Internet, where rent-seeking third parties have less control over user interaction and value transfer.

In essence, Web3 technology provides the foundation for P2P (peer-to-peer) communications, payments, services, and markets. Blockchain technology and cryptocurrencies play an important role in shaping the current development and decentralization movement of Web3.

Web3 adoption in 2019

Since Bitcoin launched the world's first blockchain in 2009, blockchain technology has improved in several key areas. As of mid-2019, Ethereum has achieved the best results in any blockchain ecosystem to date-most developers (250,000 to 350,000), decentralized applications (over 2,200) and monthly active users (~ 140,000). Despite its success, the adoption of Web3 applications still lags far behind Web2. The goal of Web3 becoming the de facto global standard for the Internet is still an unattainable goal for Ethereum and other blockchain communities.

For the Ethereum blockchain ecosystem, what are the most prominent technical challenges in 2019? What solutions can be implemented to drive user adoption of Web3? Here are three main areas to consider.

Improved scalability


Lack of scalability is one of the biggest constraints the Ethereum blockchain faces in 2019. Whenever the Ethereum blockchain receives more traffic, the associated costs (gasoline fees) and the time to complete a transaction increase significantly. Ultimately, this hindered mainstream adoption. As of August 2019, the Ethereum mainnet can only process 15 to 25 transactions (tps) per second. There are other blockchains that can handle more transactions, but this usually comes at a cost (i.e. sacrificing the decentralization or security of the network). Most blockchains used today still fail to reach the level of scalability provided by Web2 / legal database technology. For example, Visa consistently reaches speeds of 1,700 tps and claims to be able to handle speeds of up to 56,000 tps. For Ethereum, the near-term goal is to reach at least 100,000 tps.


Even though some Ethereum scalability solutions have been implemented on the mainnet, most are in the research phase or in the process of being developed and tested on various testnets.

Layer 2 extensions make it possible to move transactions off-chain. All in all, this brings the benefits of blockchain (security, immutability, decentralization), while reducing costs (slow confirmation time, high / unstable gas costs). Subchains and state channels have become the two most well-known layer 2 scaling solutions developed and implemented in the Ethereum community in recent years.

Sharding is another scalability solution. It is a type of database partitioning. It can divide a larger database into smaller, faster, and more manageable parts, called data sharding. In the Web2 era, sharding can be very simple. An example is the placement of information related to various customers on different servers based on the geographic location of each user.

However, implementing sharding in a blockchain is a very complicated process. Traditional blockchains require that all nodes carry a history of all transaction data for a given blockchain. Although this makes the blockchain slower, it also makes transactions more secure and eliminates the double spend problem. Alternatively, sharding will allow nodes to securely process transactions using only part of the blockchain transaction data history, thereby speeding up transaction completion times. The shard chain is expected to be used on the Ethereum mainnet (Ethereum 2.0) sometime in 2020. However, in the initial release of Phase 1, the shard chain may not necessarily be used as an immediate scalability solution.

Outside Ethereum, sharding has been implemented. When Zilliqa launched its mainnet in January 2019, it became the first project to launch an operational sharded blockchain. Currently, the Zilliqa blockchain is capable of processing approximately 2828 transactions per second.

The beacon chain is expected to launch in the second half of 2019, marking the Ethereum mainnet's shift from proof of work (PoW) to proof of equity (PoS) as a means to verify transactions. With PoW, approximately 90% to 95% of the processing power will be used to generate the hash (random number). Once the numbers are generated, they will have no other utilities. From a computational point of view, this not only wastes PoW, but also causes other problems, such as higher transaction confirmation costs for cryptocurrency miners that have not been successfully mined, and severe environmental pollution caused by high-energy-consuming hardware mining platforms.

Several major blockchain projects (EOS, Tezos, Tron, Lisk, etc.) have implemented PoS. Compared with the PoW blockchain, the average number of transactions per second on the PoS blockchain is higher. Ethereum's move to PoS can immediately provide greater scalability for the Ethereum blockchain and the Web3 applications running on it. Research on Ethereum's PoS solution Casper CBC has been led by Vlad Zamfir since 2014. PoS (phase 0) and sharding (phase 1) are indispensable functions in the Serenity roadmap.

Vlad Zamfir talks about Casper CBC at ETH Paris 2019.

Handling data privacy


Although the Web2 era still plagues data privacy issues due to large-scale hacker attacks or business models that rely on sales of sensitive user data, Web3 has shown the ability to improve data security. Nevertheless, new challenges have emerged. Since the data stored on the public blockchain can be viewed publicly on the block browser, it becomes more difficult to commoditize it by centralized entities, as in the Web2 era. However, the fact that anyone can easily view the history of transaction data and the total asset value in real time, as long as they know the public address of others, this raises new privacy issues. In the world of traditional banking, for example, this is not even possible. Yes, public blockchains can support private transactions while maintaining compliance. However, private transactions are not the default standard for most options. For example, on the Ethereum blockchain, private transactions often have higher gas fees than public transactions.


The AZTEC agreement is a project that provides financial institutions with the means to conduct private Ethereum transactions. The AZTEC protocol's zero-knowledge privacy protocol is already on the Ethereum mainnet. It enables transaction logic to be verified, while also maintaining value encryption by combining homomorphic encryption and range proofs. Homomorphic encryption allows arithmetic checks on encrypted numbers, just as it does on unencrypted. Proof of range ensures that negative numbers (large positive numbers in a finite field) cannot break the double spend check. A standard deal with AZTEC requires 800,000 to 900,000 natural gas. Although this is within the average petrol fee (500,000-100,000 petrol) per ETH transaction, with the future update of the Ethereum blockchain, private transaction prices will be lower.

For example, if EIP 1108 is implemented, there are other competing private solutions on Ethereum in addition to AZTEC. An example is Zether, a completely decentralized, secure payment mechanism developed by a team of researchers at Stanford University. The other is EY Ops Chain Public Edition developed by EY.

The AZTEC protocol uses homomorphic encryption and range proofs to enable private transactions on Ethereum.

Improve UX / UI


In addition to the more interactive Internet, Web2 also brings a greatly improved user interface and user experience to the world. Gone are the days of high-pixel screens and Web1's difficult-to-use technology. That being said, non-technical users are usually not as accessible to the Web3 interface as the Web2 option.

Using and storing private keys to access funds stored in cryptocurrency wallets provides a new learning curve for those who use simple Web2 passwords. In addition, if funds are stolen or lost, there are few effective recovery methods. For those using blockchain technology, even sending (and losing) funds by entering the wrong hexadecimal 0x is easy to make mistakes.

The question of how the Web3 mobile experience can catch up with the Web3 experience provided by Web browsers remains unresolved. These are just a few of the many obstacles end users must be aware of when using Web3. The number of possible UI / UX friction points is much higher compared to scalability and data privacy issues. In addition, the criteria for whether Web3 applications are easy to use or difficult to use are very subjective and based on the opinions of each user. This makes it difficult to determine the "x factor" required for mainstream adoption.


Several effective techniques already exist to solve many UI / UX challenges of Web3. For example, MetaMask simplifies the process of securely storing funds (private keys stored in the browser) and improves accessibility (dApps connect to MetaMask). Human-readable wallet addresses can now be implemented via the Ethereum Name Service (ENS).

This will not only make it easier to remember your payment address, but also reduce the possibility of remittance of funds to the wrong 0x address. However, Web3 lacks many of the user protection features and mobile accessibility prominent in Web2. Even if these changes are actually small, many people who are new to blockchain and Web3 are still reluctant to accept an Internet experience that seems (at least on the surface) to be very different from their habits. Nevertheless, with continuous improvements to UI / UX, new non-technical users can more easily access Web3 applications.

In November 2018, MetaMask's Google Chrome browser extension reached over 1.3 million users.

What's next for Web3?

There are many existing blockchain technologies, especially the practical use cases of Ethereum technology. It is clear that the era of Web3 is not theoretical. The Internet, the global economy and governments have not fully realized the vision of Web3. Nevertheless, in 2019, the paradigm shift is already well underway. Significant progress has been made in solving these technical challenges through innovative solutions, and Web3's vision as a true competitor to Web2 is approaching realization.

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