Web3 vs. The Metaverse: What’s the Difference?

In recent years, the terms Metaverse” and “Web3” have become widely used across the internet. But these two concepts often get mistaken for one another, even though they are not one and the same. So, what’s the difference between Web3 and the Metaverse, and in what ways are they similar?

What Is Web3?

Web3 (also known as Web 3.0) is the third iteration of the internet. First came Web1 (Web 1.0), then Web2 (Web 2.0), and now, Web3 is in our sights. But what does this version of the internet look like, and how is it different from what most of us use today?

Traditionally, the internet has always been made up of centralized entities. Google, Instagram, Meta, Amazon, and most other web platforms use a centralized power structure, in which the majority of control lies with a small number of senior staff at the top of the employee pyramid. This seems like a logical structure and works in many cases, but a top-down power dynamic like this can lead to corruption and poor decision-making.

What’s more, centralized platforms are often exposed to malicious attacks because of how the data in and control of the ecosystem is distributed. If you harbor power in one place, it’s easier for cybercriminals to target. General technical issues can also cause problems more easily if the structure is centralized, as one failure can lead to a crash if it sits at the core of the system.

People are also concerned about censorship on centralized sites. As the internet becomes further relied on for news, education, and other useful information, the dangers of censorship have become clearer. Some governments have even chosen to block access to certain news and social media sites, which stops citizens from accessing content on such platforms.

Censorship can also be useful, especially in the removal of hateful and inappropriate content. But users are concerned about how platforms decide what should and shouldn’t be censored. The censorship rules employed by YouTube, for example, have long since frustrated content creators, with many believing that certain videos are being wrongly removed or demonetized.

So, there are various issues and risks associated with a centralized internet. But what’s the solution? Some would say Web3.

The term “Web3” was the brainchild of Ethereum co-founder Gavin Wood. The easiest way to distinguish Web2, our current internet, from Web3, is the former focuses on read-write (allowing for content creation as well as consumption), while the latter focuses on read-write-own. Let’s get into the elements that make this possible.

1. Decentralization

Web3 has a decentralized structure, meaning no one entity ever holds all the power or data present in a given network. Instead, information and control are spread across multiple connection points and devices (also known as nodes). Using hundreds or even thousands of separate devices essentially gives the network a lot more stability and resistance against technical errors and malicious attacks. After all, it’s much easier to target a handful of computers than a sea of them.

Within decentralized platforms, the users are in control, not any superior entity. This is where the “own” element of Web3 first comes into play. When a platform is controlled by its users rather than a small group of higher-ups, ownership essentially transfers from the latter to the former.

Web3 also makes use of blockchain technology to maintain a decentralized structure. Blockchains use distributed ledgers to record and store information. A distributed ledger provides users with a transparent yet immutable record of data. Bitcoin, Ethereum, and thousands of other cryptocurrencies also use distributed ledgers on blockchains.

Decentralized platforms allow any member of the network to view their distributed ledgers, which also makes Web3 trustless. This trustless element is further secured by the fact that Web3 doesn’t require third parties or middlemen. For example, if you want to trade crypto on a Web3 platform, you don’t need an intermediary to facilitate the transaction (though you would with typical financial services).

It’s also worth noting that Web3 is open-sourced, meaning anyone can access and make their own modifications to software code if they wish. This could be a big help in ironing out bugs and vulnerabilities.

2. Governance

Decentralized platforms also use a mechanism known as governance to give users a say in how things change and progress. This offers network members the chance to vote on certain proposals.

Updates, feature additions or removals, interface modifications, policy changes, and other platform alterations can be subject to governance voting, giving all users the opportunity to play a role in the platforms they love.

Take the UniSwap crypto exchange as an example here. This decentralized platform allows those who hold UNI tokens (the platform’s native currency) to take part in the governance voting process. When a proposal is submitted, users can use their tokens to vote on the outcome. This way, users can give their input on how things should move forward, allowing for a fairer system overall.

Some platforms also have dedicated governance tokens that users must have to take part in governance (such as the Algorand blockchain).

The governance process essentially allows regular users to become shareholders, with their own influence over how things change (which ties into the “own” element of the Web3). This is a key component of Web3’s additional focus on tokenization.

3. Tokenization

As you may have already guessed, tokens are a big part of Web3. Most of us buy services and products online using traditional money, such as USD, GBP, and EUR. But Web3 focuses on the use of cryptocurrencies for payments and governance participation.

Pretty much anything within Web3 can be tokenized, including assets, videos, platform access, apps, images, event tickets, and more. This tokenization aspect will also make NFTs very useful in Web3. People can buy and sell NFTs within Web3 to make money, gain perks, access certain information, and more. Again, this relates to Web3’s focus on ownership.

So, how does Web3 compare to the Metaverse? Are they at all similar to each other?

What Is the Metaverse?

The term “Metaverse” is quite vague, so it’s no surprise that it has been confused with other technologies, including Web3. First coined back in the early 1990s in Neal Stephenson’s sci-fi novel “Snow Crash”, it has taken years for the concept itself to somewhat approach reality.

The Metaverse is a digital space wherein virtual worlds can exist. Some believe this is what the future internet will look like, while others think the Metaverse could physically or mentally harm us. A single virtual world can also be referred to as its own Metaverse, though many refer to the entire concept as “the Metaverse”. Using the Metaverse, individuals can enjoy a real-time virtual reality experience where they can socialize with other users, buy assets, play games, and more.

The most focal component of the Metaverse is virtual reality, whereas Web3 does not require this technology. You don’t need a VR headset to use Web3 applications. You can simply use your desktop PC, laptop, smartphone, or similar device as you normally would.

While the Metaverse as a whole is still largely conceptual, there are various platforms out there today that may have a large prevalence in the final version. Take Decentraland, for example. This virtual reality-based digital platform (a Metaverse in and of itself) lets users socialize, buy plots of land and other assets, and essentially build their own worlds.

Decentraland uses decentralization, blockchain technology (specifically Ethereum), cryptocurrency, and NFTs within its ecosystem. It is this crossover that has often led to the mix-up between the Metaverse and Web3. Of course, Web3 also uses these technologies—but it applies them over a broader range of apps and services, not just those that support virtual reality.

Because Web3 and the Metaverse are also in their infancy, many don’t really know what the finished products will look like, which fuels confusion, assumptions, and even rumors. Much of the public still does not fully understand the core concepts behind the Metaverse and Web3, and it’s perfectly understandable why!

Web3 and the Metaverse Share Similarities But Are Not the Same

Web3 and the Metaverse both use similar technologies and have a focus on decentralization and tokenization. But Web3 casts a much wider net, encompassing an entire iteration of the internet. The Metaverse, on the other hand, takes up a small portion of the internet—be it Web3 or Web2. Time will tell whether these concepts are fully adapted or left behind for other, more useful alternatives.