Web2 and Web3 are terms used to describe different generations of the internet. Web2 refers to the current version of the internet, which is centralized and controlled by a few major corporations. Web3, on the other hand, refers to the future version of the internet, which is decentralized and controlled by the users themselves. These differences in structure and control have significant implications for product development. This article will explore the key differences between Web2 and Web3 product development.

1. Centralization vs. Decentralization

The most fundamental difference between Web2 and Web3 product development is the shift from centralized to decentralized systems. In Web2, products are developed by a single entity, typically a corporation, which controls the entire product. This includes the data generated by the product, the algorithms that drive the product, and the revenue generated by the product.

In contrast, Web3 product development is decentralized. Products are developed by a community of users, who collectively own and control the product. This includes the data generated by the product, the algorithms that drive the product, and the revenue generated by the product. This shift from centralized to decentralized control has profound implications for product development, as it requires a completely different approach to design, development, and monetization.

2. Data Ownership

In Web2 product development, the data generated by users is owned and controlled by the corporation that developed the product. This data is often used to generate revenue, either by selling it to advertisers or by using it to improve the product and attract more users.

In contrast, in Web3 product development, the data generated by users is owned and controlled by the users themselves. Users have the right to decide how their data is used and who can access it. This shift in data ownership requires a new approach to product development, as products must be designed to respect user privacy and give users control over their data.

3. Monetization

In Web2 product development, products are typically monetized through advertising or subscription fees. The revenue generated by the product goes to the corporation that developed the product.

In contrast, in Web3 product development, products are typically monetized through tokens or cryptocurrencies. The revenue generated by the product is distributed among the users who own and control the product. This shift in monetization requires a new approach to product development, as products must be designed to incentivize user participation and reward users for their contributions.

4. Transparency and Trust

In Web2 product development, the algorithms that drive the product are often opaque and controlled by the corporation that developed the product. This can lead to a lack of trust, as users do not know how their data is being used or how decisions are being made.

In contrast, in Web3 product development, the algorithms that drive the product are transparent and controlled by the users. This can lead to greater trust, as users can see how their data is being used and how decisions are being made.

5. Interoperability

Web2 products are often siloed and do not interact with other products. This is because each corporation wants to keep its users within its own ecosystem.

In contrast, Web3 products are designed to be interoperable. They can interact with other products and share data with them. This is because Web3 is built on open protocols that allow for interoperability.