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Web3 Explained: A Comprehensive Guide


Web3 is the third generation of the Internet, aimed at solving issues that the current data-driven era presents. Sanctum Invicta’s goal is to redefine Web3, making it as easy as Web2. In order to achieve this, people need to understand the context behind web3 to understand its potential.

History of the Internet

In order to understand what web3 is we must first understand the history of the internet. 

People take for granted the steps it took to grow the internet into a ubiquitous part of modern culture. By the year 2000, the global adoption rate of the Internet was at 5.8% compared to 60% in the year 2021.

What makes up the “internet” is not just one technology but a collection of multiple devices, software, and technology. Let’s go over the first two generations of the internet.


Initially, the first generation of the Internet, also known as web 1.0,  was a one-way source of information. The internet started on January 1, 1983 with the establishment of the Transfer Control Protocol/Internet Protocol (TCP/IP). This new communications protocol provided a standard way for computers to communicate with each other.

Although the internet became more accessible to the public in the 1990s, it had limited functionality at the time. However, developers created new protocols that gradually added functionality to the Internet. Search engines enabled people to navigate the limited available content. 

During the 1st generation of the Internet, developers created technology and protocols that defined key utilities, such as:

Internet Technology

FTP (File Transfer Protocol): a protocol that enables computers to transfer files between each other. FTP is essential for modern applications like video streaming, video calls, online gaming, file sharing, and cloud storage.

Email: This protocol allows computers to receive messages from others even if they are not online at the same time. Email applications such as Microsoft Outlook, Yahoo, and Hotmail have played a significant role in popularizing this protocol.

IRC (Internet Relay Chat): This protocol allows computers to receive synchronous communications from others, starting with chat applications such as AOL Instant Messenger (AIM). This paved the way for messaging platforms such as Twitter, WhatsApp, and Instagram.

HTTP (HyperText Transfer Protocol): This protocol is the foundation of the modern web and allows users to access a vast range of information, services, and applications over the internet.

HTML (Hypertext Markup Language): This standard language is used to create web pages and web applications, enabling developers to add text, images, links, and other elements on a web page.

URL (Uniform Resource Locator): This unique address identifies the location of a website, such as “” for YouTube or “” for Sanctum Invicta.

Wi-Fi (Wireless Fidelity): This protocol allows devices to connect to the internet without physical cables or wires, using radio waves to transmit data between devices. Wi-Fi has become ubiquitous in modern society, with most devices now able to connect to each other wirelessly.

Web 2.0

The 2nd generation of the internet brought in e-commerce, social media, and interactive web applications. User-generated content became popular, and social networking sites like Myspace, Facebook, and Flickr took the lead in the social media industry. Amazon and Ebay set the standard for e-commerce, while Youtube became the go-to platform for sharing videos and home-made content.

Today, a small number of big companies like Google, Youtube, Facebook, and Amazon dominate the internet, making up 80% of all internet traffic. These companies and their products have become synonymous with the internet for many people.

The Problems With the Current Internet

There are several obstacles hindering the full adoption of the 2nd generation of the internet.


Today, internet users lack control over their personal data, which is collected, bundled, and sold by companies. Users have little to no authority over data usage, financial benefit, or visibility to third parties.


Contrarian opinions, competition, and fair use that would otherwise be considered legally acceptable can be removed from platforms. Penalties may involve fines, visibility restrictions, or the removal of content altogether which typically doesn’t involve legal proceedings.


Users are required to submit sensitive information through various websites, leaving their digital identity in the hands of companies. Users are increasingly concerned about their digital privacy and what companies do with their data.


It is easier for hackers to target companies to exploit vulnerabilities in how they secure data. Cybercrime is projected to cost the world $10.5 trillion annually by 2025.

Cybercrime costs can include theft of money, financial and personal data, fraud, embezzlement, and other related issues. Data breaches are the main reason why companies spend a considerable amount of resources on cybersecurity protection and encryption technology.

Web 3.0

Web 3.0 refers to the third generation of the internet which is designed to be more open and secure. This is made possible by decentralized technologies like blockchain, which allows for the creation of secure, transparent, and censorship-resistant applications.

What is the role of blockchain in web3

In Web3, blockchain technology has an important role in ensuring the network’s integrity and security through cryptography. Blockchain uses dApps to build applications that work without intermediaries.

The Key features of Web3 include:

  • Decentralization: the absence of a central authority or intermediary reduces the risks of censorship and a single point of failure.
  • Transparency: every transaction is public and can be viewed by anyone on the network, enhancing trust.
  • Security: the use of cryptography ensures that the data stored on the network is tamper-proof and secure.
  • Immutability: data that is recorded on the blockchain cannot be altered, making it useful for record-keeping and verification purposes.
  • Programmability: smart contracts allows for the automation of processes and the execution of pre-defined conditions without human intervention.

What are the challenges and limitations of web3 adoption

Although Web3 technology offers significant benefits, its adoption faces several challenges and limitations, including:


Web3 technology can be difficult for many people to understand, even for those considered “web3 natives”. The use of technical jargon and unfamiliar concepts can be intimidating and hinder mainstream adoption. It’s important to shift the focus from what it is to what can be achieved with web3 technology.

A solution to this challenge is to highlight and prioritize products that develop solutions that address real-world problems. While there are many companies pioneering important technology for web3, future growth will ultimately come from brands that harness these tools into simple concepts for consumers to interact and engage with.

Another layer of this involves developers creating better user experiences and onboarding so that their applications are more intuitive. Every project and company is going to need to prioritize education and user onboarding to protect consumers and investors.


Scams in various forms have plagued the Web3 space, causing financial losses to investors. These scams, which include rugpulls, honeypots, abandonment, and insider trading, have raised concerns about the lack of transparency and governance in the industry. While the underlying blockchain technology is transparent, the management of platforms, cryptocurrencies, and NFTs lacks information about how they are designed, the privileges given to developers, and the rights of token holders.

While web3 technology is tamper-proof and censorship-resistant, scammers often exploit gaps in consumer awareness. For example, even though the cryptocurrencies themselves can’t be tampered with, scammers may try to trick people into sharing private keys to their wallets to make unauthorized transactions. Even though the code may be transparent for all to see, developers may take advantage of the fact that people can’t read and understand it to know the special privileges they’ve given themselves.

The absence of standards has encouraged bad actors to take advantage of the hype surrounding new projects, rather than focusing on solid business plans. To combat this, it is essential for founders, investors, governments, and Web2 companies to work together to establish standards to reduce fraud.


The unmistakable demand for crypto products puts the US at risk of allowing other nations to define the rules for how the cryptocurrency markets develop.

The key to solving this issue is to show the value of web3 technology and raise awareness for real brands that aim to bring value. for Congress to clearly define whether cryptocurrencies are securities or utilities, what the proper way to issue these to the public is, and what rights and protections investors have.

Frequently asked questions

What are DAPPs and how do they work in Web3?

In Web3, decentralized applications, also known as dApps, rely on blockchain technology to ensure the security and integrity of data. Unlike traditional applications that rely on a central server, dApps store information on a distributed network of computers all over the world, making it challenging for anyone to tamper with the data.

The rules that govern dApps are built into the code using smart contracts, which are like computer programs that execute automatically. For instance, a smart contract can facilitate automatic cryptocurrency transactions between users. 

How can web3 provide a more secure and trustworthy online experience?

Web3 creates a more secure and trustworthy online experience by using blockchain, smart contracts, and decentralized protocols to create a decentralized infrastructure. Data is stored across a network of multiple devices, making it difficult for bad actors to compromise the data or network. The yearly average cost of a data breach was $4.35 million in 2022. Hackers typically sell data on the interwebs or hold companies at ransom to rectify the situation.

Web3 uses encryption, digital signatures, and smart contracts to ensure data security, integrity, and transparency.

Decentralized protocols enable the network to operate without a central authority, making it resistant to censorship and interference. This makes sure that data and transactions are secure, and transparent, and that users have more control over their online interactions and data.

What are some examples of web3 applications currently in use?

1. Cryptocurrencies: Cryptocurrencies like Bitcoin and Ethereum, which enable peer-to-peer transactions without the need for intermediaries or centralized control

2. Decentralized finance (DeFi): Decentralized finance (DeFi) applications, such as lending and borrowing platforms and decentralized exchanges, which allow users to transact without intermediaries or centralized control.

3. Non-Fungible Tokens (NFTs): NFTs are unique digital assets that are stored on a blockchain. They are tokenized metadata used in a variety of ways, including for art, gaming, and other types of digital content.

4. Supply chain management: Web3 technology is being used to improve supply chain management by providing greater transparency and traceability of goods and materials as they move through the supply chain. This can help to reduce the risk of fraud, counterfeiting, and other types of supply chain disruptions.

5. Social media: Decentralized social media platforms that aim to provide greater privacy and control for users while eliminating some problems of centralized social media

6. Identity verification: Decentralized identity verification systems that enable users to control their identities and share their data selectively with others.

As Web3 technology continues to develop, we can expect to see more innovative use cases emerge.

What is the role of cryptocurrencies in web3

Cryptocurrencies are crucial for Web3 technology, as they facilitate decentralized, peer-to-peer transactions without the need for intermediaries or centralized control. They enable decentralized value transfer through the use of blockchain technology, which allows for secure and verified transactions. Cryptocurrencies like Ether can also be used to pay for the execution of smart contracts and incentivize users to participate in the network through mining or staking. Additionally, some cryptocurrencies can be used for governance, allowing token holders to vote on proposals and make decisions for the network’s direction to ensure it operates in the best interests of its users and stakeholders.

What is web4 and web5?

Web3 is the latest version of the internet built on decentralized technology, specifically blockchain. However, there is already discussion around the future of the internet beyond Web3, with theories on the nature of Web4 and Web5. These hypothetical versions of the internet would incorporate technologies like artificial intelligence, quantum computing, and brain-computer interfaces.

The integration of artificial intelligence into internet applications is becoming a reality in 2023, with companies like ChatGPT and Google already demonstrating its potential. Sanctum Invicta also plans to utilize AI to enhance some of its applications and utilities. 

Quantum computing is an experimental technology that makes it possible to make many calculations simultaneously. Quantum computers are many times faster and stronger than traditional computers and have the potential to solve problems our current technology can’t. With advancements in technology, it will become more accessible in the future.

Brain-computer interfaces (BCIs) use sensors to detect and interpret electric signals generated by the brain, allowing for direct communication between the brain and a computer or electronic device. BCIs have the potential to help people with disabilities and enhance human performance.

The evolution of the internet is an ongoing process, and new technologies and ideas will continue to shape its development over time. While Web3 represents an important shift towards decentralization and trustlessness, the future beyond Web3 is unclear, and new technologies may emerge to shape it.

What Comes Next

Sanctum Invicta’s goal is to simplify the complexity of web3 and make it as user-friendly as web2. Our company achieves this by dedicating itself to providing innovative solutions through product and branding strategies that will help usher in the future of the internet. By establishing a solid foundation, we plan to create a sustainable business model that will ensure our success in the long term.

Part of our focus is to showcase the benefits of web3 so that people can understand the usecase. As more people understand the potential of web3 technology, this will spur more innovation and growth in the industry.

Sanctum Invicta is looking to rebrand web3. Join our Waitlist to get announcements and reminders of our company as we look to go through our capital raise to get the ball rolling on a groundbreaking project.

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