# Eduard Sipos - Web2 vs Web3: Key Differences - Channel: [ETHCluj Meetup](https://streameth.org/ethcluj-meetup) - Date: 2026-04-09 - Duration: 35:41 - Watch: https://streameth.org/watch/yt-5bCkytOlO9E - YouTube: https://www.youtube.com/watch?v=5bCkytOlO9E ## Description Contrasts centralized (Web2) and decentralized (Web3) systems, focusing on control, privacy, and ownership. ## Transcript Hello everyone and welcome to web two versus web three key difference or how I like to call it a tale of web three. An introduction into a world where the future is not just something you browse but something you truly own and shape. But before we start, I have some questions for you. How many of you think about crypto when you hear the word uh blockchain? Did you wonder if there is more to blockchain than just another way to scam people on the internet? Is crypto the only use of blockchain? No. Okay. My name is Ship Edward and today I will tell you a story. At the beginning when I was in the college I heard a lot of people talking about blockchain technology and I was thinking in my head like I was like yeah everybody's talking about bitcoin the only cryptocurrency that was back then everybody was mining it. I was already working as a software developer in web 2 and after a short period of time covid came sent everybody home and I started having a bunch more time on my hand. So I decided that I will invest that time in researching a bit more about blockchain technology. I found out that there is a bit more to blockchain than just just crypto. But before we get into the what blockchain actually is, I would like to go with you guys into a history lesson regarding of how everything started. We started with web one. Web one was static web. It was all about consumption. Today you can find it in presentation pages or just simple pages that you are there to see and consume it. The challenge was that it was not interactable. So people were able just to see the information but not interact with it. So as a solution to that we have web two. Web two or the social web. The social web is all about participation. And today it be it became so powerful that everything that's around us is built on web too. If we look around, we have social medias, we have our phones, even the street lights outside, they are all built on web two. Even our vacuums, if you have smart vacuums, those are also built on web two. Okay. But we also know that web two is centralized and controlled. What makes web decentralized and control? The short the short answer is this guy or the hydrares actually are the giant companies that uh that own the center the center servers and data databases. One of the giants in the market is the China Telecom Information Park that has like 1 million squares. It's pretty big. So, we know that web 2 is interactive. It's centralized and is controlled. In the past couple of years, we have a lot of concern raised regarding the privacy of our data. And we all know that a lot of social media used our personal information and personal data to sell to advisors and advertisements. And this is not even the biggest issue that we face. We have our banking systems. All the banking system is held on web two. And in the banking, we have everything related to our money, our salaries, invoices are that are coming there, mortgages. And for example, if someone would decide to close that bank, it will you will stop having access to your own money. And this is not something just theoretically speaking. We already have an example right next to our border where Ukrainian banks frozen all assets for the Ukrainian people when the war came. Okay. So what would be a solution for this? A solution will be decentralization or web 3. Web three or decentralized web is all about ownership and decentralization. Web three is decentralized. It's about trustless systems and ownership. Decentralization specifically in web3 refers to a scenario where the power control and security are transferred from one central authority to several to several actors who join manage the system of interest. I know pretty big words. We will uh go into the into into that. One of the technology that is powering web 3 is the blockchain. So we can say that the heart of web 3 is blockchain. So if web3 is the body then blockchain is its heart pumping data, trust and value to every part of the system. So let's see then what blockchain actually is. The short answer to that, it's a great data center. Okay, great. But now you may wonder how blockchain differs from the traditional data center. At the surface they are the same. But let's dig deeper to see what is under the hood. A regular data center has a single point of failure. You can imagine it like one headed snake. Let's say if you cut its head it will die. Exactly like in the data center. If you unplug it, it will stop working and all the data from there it will get lost. Now blockchain could be represent is represented by a series of nodes which each node represents one to one copy of each other of each other nodes. Exactly like a multi-headed snake. Do you know how a multi-headed snake looks like? Looks like something like this where each head represents a node. So if you cut one head, the other will still work the same. Even more in time, another head could grow back. Exactly like the blockchain, a new node can be added at any time. Another example of this of centralized and decentralized, we can take for example the banking system. Everybody has their value in one place in the bank and this is centralized because if some bad actor will decide to take control of the bank everybody everybody's as will be at risk in block in blockchain in instead we have everybody has a copy of one to one from the assets. So if someone will take access of one point, the other will still work exactly the same. So if you want to take control of a network, you will have to control 51% of the nodes. That will that is that's the only way how you will be able to change or alter the data from the from the network. Okay. Now that uh we have an idea about how decentralization looks like let's talk about ownership to understand more ownership how ownership works on web three let's take a web two example we all have social media we all have used email and password to log in right we are we are safe to assume that our email address is our online identity have you ever wondered Where are your email and password stored? Actually, I have a better questions. Who is the owner of your email address? We all have been tricked into thinking that we own our email addresses, social media accounts. But the reality is that we only borrow them and we are allowed to use them as long as we respect the terms and conditions of the platform. Okay. In web 3, we have something different. We have something called the wallet in web three. The wallet is our digital identity and our footprint. And a wallet is created from two parts. We have a public address and a private and a private key. You can think of the public address like your email address. It's something that you share with everybody. So it's the it's your identity. Everybody will know who you are based on your public address. The p the private key is like your password. It's proof that you are truly controlling the wallet. And just like a password, you should never share your private key. When you want to login into web platform, instead of uh sending your data account, you just connect your wallet. So all your information will be will will remain in your control. The platform will only know your public address and based on the private with your private key you will be able to sign a transaction that will prove that you are the owner of that public address and the platform will give you access to the information from the platform. Okay, having these two two new terms we have transactions and we have sign. A transaction in web tree is just a set set of data. It's some instruction that are waiting to be executed on the blockchain. The sign is the moment when you let me give you an example to be much more uh to to be able to explain the sign even much more better. For example, we have a transaction and we want to let's say send a message to someone and we write the message. The message that we have written is the transaction, the data and the transaction that you want to send to someone. The moment when we press the send button and maybe we even confirm it with the face ID, it's the moment when you sign the transaction. A key difference here is that in web two or when you send the trans the message, you will be able to maybe delete it or revert it or change it or edit it. In web three once you sign the transaction the the transaction will be sent to the blockchain and will you will not be able to alter it or change it anymore. So the idea behind is that once a transaction is signed and out there there's no way to revert it or change it. Okay, what do we know so far? There's more to Web3 than just crypto. Web three is built on blockchain technology and blockchain is just a fancy word for a decentralized data center. Okay, let's see what other feature blockchain has. Blockchain also is transparent and secure. Blockchain is transparent because each transaction is recorded and saved and publicly available. So you can go to we have there are multiple websites that allow you to see what transaction was executed on the blockchain. For example, we have ether scan that will allow you to see all the transaction that happened on the Ethereum network. You can go there and see each transaction and you can trace them to see who sent the transaction and where the transaction went. This proves the transparency of the blockchain. Okay. Uh this is how u transaction looks like on uh ether on ether scan. I'm not sure if it's visible from this side is not very well. Uh we have it. It has multiple um parts. It has like a transaction hash that represents the basically the transaction ID. It has a block where it's the block number where the transaction was minted. We have a status of the transaction. We have a address from where it was sent. We have two a person to the who received the transaction. We also have a value in this in this transaction. In this case, someone sent one polygon to another person. And this is very easy to find like you just go to ethercan and if you know the public address you just have to know the public address and you will be able to see the entire history of that person. What makes blockchain secure? It's cryptography decentralization uh imu immutability smart contracts. I will take some of them and uh get into deep and see what um what they are what they are making the blockchain secure. For example, we have the cryptography and for crypto cryptography we have hash function and digital signatures. Hash functions are each each block in the blockchain contains um hash of the previous block and this is how the chain is formed. Changing changing any data would alter the hash and break the chain. A hashing a hash function it's just taking an input like a text or a file and it will produce a unique fingerprint of that particular data. It's also deterministic. So always the same input will deliver the same output. For digital signature, a user has to sign the transaction with its private key that we talked previously. Immutability. Once a block is added to the and validated, it becomes nearly impossible to change. So if you want to change any block in the chain, you will have to have control over the 51% of the network. That's the only way that you will be able to actually change a block in the ecosystem. Smart contracts. The smart contracts are the code that is executed on the blockchain. They are immutable and transparent. It's also known as financial programming. We are coding on contracts. As an example, I have difference between a web two and a web three code. So in web two we all know classes that for example we have here the contract that is vote and the vote class it's not it's in a way they are pretty similar there are some key differences here for example in the function of vote in the class vote you will have to send the sender so you you will know who is the person who actually voted in this case but on the contract side you don't need to send the sender because you have something called the sender the musu sender which is always registered based on the wallet who is making the call to the function. So in that case uh you cannot alter or change or rechange this sender. Instead in web two if you know a bit of uh byte code you will be able to change the sender. This would be a way of a difference between the web two and web three. Okay. Also in blockchain we have some digital assets and two of them that are very known are tokens and NFTTS. The tokens or fungeible tokens they are digital assets where each token is identical in value and functionality. We have two primary uh to two primary type of tokens. We have the native token which are used for chain operation. For example, in on the Ethereum network, the native token of the network is Ethereum. Also, for example, for Bitcoin is bitco for the bitcoin network, the bitcoin is the main um main token. We also have the token where token are used for whatever the user intend to use them. I write here that tokens are the creativity is the limit of the usage. For example, you can create a token just because you want to own the currency. For example, you can add your own rules. You can create it however you want. Also, tokens are used in governancy. You can create a platform where your token will allow the users to vote. It has a lot of the rules basically are what we are making it to be. tokens are used right now in usually for fundraising or in-game currency. It always depends on what the product that you will build will will want to use. We also have NFTs which are nonfgeible tokens. These are unique digital assets that represent ownership or proof of authority of a specific item in where each is one is here in the NFT each one is distinct. So you don't have like two NFT which are the same. They may look the same but back in in the background they are totally different. Each each NFT has each its own ID. For example, it was used for artworks, collectibles, houses, in-game items. Um, here, for example, a real world use for the NFTs. For example, in 2023, a property in Croatia was actually successfully sold over the blockchain and all the documents, all the paperwork were represented into an NFD. So today we actually have a property in Croatia that's is an NFD and who owns that NFT owns the particular property land. This is something that you everybody can check. It's it's pretty fun pretty fun uh use of NFD. Okay. We have in um blockchain as in web two we have applications in web three we have dabs or decentralized application. And here the most common is DeFi which is the decentralized finance industry. We also have in gaming. Uh we have in health and in real estates. Health and real estates are still in the part of um exploring. It's not yet a final version deployed there but there are people are working to bring blockchain into the health industry and also into the real estates on defi or financial applications. This is one of the most uh known use of blockchain because everybody start using crypto and crypto it's somewhere in this part of the blockchain. For example, one of the biggest uh exchange on crypto is unis swap. That's on Ethereum. And what unis swap does is allow you to swap tokens. For example, in a traditional way, you will take your money, let's say lei, and go to the bank to exchange it for euros. Okay. Now, there are a lot of fees. You have to go to the bank. It's a lot of process to do that. In blockchain, you just go to unis swap. You connect with your wallet and you will be able to swap tokens. For example, you will be able to swap from Ethereum to USDT where USDT is native. It's a token that represents oneonone comparation with the USD with the USD. Yeah. Here also we have an example of real use beside uh scamming people with the crypto. uh we know that uh in Argentina there was uh they suffered for from inflation and they have like the the inflation surpass one 140% in 2023 and due to this u inflation and the irregularity price people decided to take their funds and put them into the crypto for example they used the USDT. Also, this allowed them to open to a wilder market, not just to their country market, which was very inflational at that time. And this allowed people to protect their savings as access dollar backed assets without strict banking controls and participate into the global market. So this was the intention of the crypto not what actually became basically this was one of the actual use for where crypto came and find a solution. We also have crypto in gaming here it's usually blockchain was created allowed games to create new ecosystems models ownership systems and player experience. For example, in Steam marketplace, you will be able to buy items and sell them on the marketplace inside the Steam inside Steam. But if the developer decide to remove your item, then the item will disappear using the blockchain, you will be allowed to create an item and you will own that item. So let's say you decided to not play that game anymore. you will be able to go to secondary market and sell your item and the developer will know will not have access to your item to delete it whenever he likes. For example, here we have um Gods Unchained and Wolves of Rome. These are two card games that are using blockchain as their internal ecosystem and allowed user to swap cards to sell cards. The game itself, it only sells packages where you receive multiple cards and the user will allow with different rarity. And for example, if you bought a package and you have a duplicated card, you will be able to sell it on the second hand on the secondhand market. Some people use that to make a profit because they were lucky and received a lot of legendary cards which are much higher price. And also in gaming for example when uh because NFTs have a royalty system. So each time a card was sold on the secondary market the developer also got a part of the transaction because NFTs have this part of royalty system in the health industry. we have and we know that uh IBM is one of the companies that are researching how they can transform everything that's in the health system to make it much more secure and to allow them to not be controlled by one entity. For example, you go to a hospital and they will require you to complete all your data, all your um medical problems and they will keep it only for internal use. So if you go to another hospital you may you may be a you may be asked to also again complete those data do all the analysis that you have to do and they are trying to find a solution in which you with the blockchain use you will be able to go to any hospital and also have your data already there or you can take your data with you without having to recomplete every every form or whatever they will ask you to do. And also it will be kept at you you will be the owner of your data not the hospital. So they will not be able to sell them to the far pharmacy or whatever they may want to do with it. In real real estate uh we al we already have the Casia example where uh land was sold in with NFT but here there are also other examples where we can use NFTs for example let's say even inclusion if you want to buy an apartment they are pretty expensive right now but you gather with a lot of your friends and you all buy a fraction of that apartment. So each of one of you will have a fraction of it and with NFTTS you will able for example if you rent out that apartment when the money from the rent will come in each one will receive a part of it based on how how much they own based on the fraction that they own on that. This is another use of NFD in real estates. Okay. Now on blockchain we have also multiple type of blockchains. So how many type of blockchain are out there? We have public blockchains, we have private blockchains, we have federal blockchains and we have hybrid blockchains. For the public blockchain and the most the most used is the public blockchain. The public blockchain is both open to everyone. It's fully decentralized and anyone can read, write and participate. For the private blockchain has restrict access and control by a single organization. It's much faster and much more efficient than a public blockchain. Only selected participants can validate and view transaction. Usually the private blockchain is used in supply chains. For example, you inside your company, you would like to keep track of something specifically. And with blockchain, it allows you to make it a bit much more easier than just created into a web to program. Usually people are using the public blockchain because the public blockchain it's offering the exact decentralization where everybody can participate and it offer that trust that web three and blockchains are uh are talking about the federal blockchain it's controlled by a group of organization offers partial decentralization and it's much more trusted and coordination between non parties. is this is more in a direction of institutions like I don't know governancy where you would like to know some part specifically I don't know at this point uh if someone actually is using the this uh blockchain also we have the hybrid blockchain which is a combination of the public and the private features sensitive and the sensitive data remains private while The public data is open and has flexible governancy and control. I think the hybrid blockchain will be one of one implementation for hybrid blockchain will be the healthcare because there you would like to some information to remain private and only the institution to have access to it and other information you would like to be always public and to have everybody access to it. Okay. Now, web 3 is not completely perfect and we have some challenges and one of the challenges that we have in web3 are scalability, we have UX complexity, security risk, regulation, interop interoperability and adoption and trust. Regarding the scalability um at this point people are already started to adopt the blockchain but the layer one or the first blockchain that appear which are the most secure they have um they are struggling with high transaction volume that means that the transaction are getting a bit slower to be executed on the chain. Regarding the user experience, uh we have wallets, we have fees, private keys. Usually it brings a lot of confusion to nontechnical persons. If you're nontechnical and you look over this, you will be a bit overwhelmed by what everything means, how to use them, what actually how this is will help you. A solution for the UX uh complexity we already start having. It's uh people are starting to research more into how to bring to the everybody to open it to everybody. For example, MetaMask started to implement much more automation in their apps. So user will not have to think always about how much token they allowed or to be much more care about allowance. I just realized I don't not really talked about allowance. For example, in crypto, when you want to transfer some amount of money, you have to allow the contract to use your funds. So, back uh a couple of years ago, it always was set to max. So, let's say you wanted to send one token, but when you open the Metam Mask, it will be prefilled with the max. That mean maybe 10,000 or even more tokens. And this allowed a lot of third parties to create a contract, ask you to send one token, but you allow them to use all of your tokens. So that that allowed them to drain your wallets. It happened a lot of time in the a couple years ago. Right now, MetaMask it's specifically ask you to add the minimal amount and don't allows you to put actually big amounts there. We have also some security risk. For example, um one of them are um the smart contracts that are prone to bugs and hacks. We have also the users are responsible for their private key. So there is no pass password reset. Regarding the smart contracts, usually to be trusted and people to start using your system, you have to go through an audit and all your contracts have to be or the test coverage has to be 100%. So maybe in web two you will be allowed to deploy an app that has no unit test. Well, in web three you have to have you have to have 100% coverage of your uh of your code. Uh regarding regulation uh right now the governance may restrict or heavily regulate crypto and decentralized app here in uh in Europe in European Union we have we already have Mika which is the market in crypto sets regulation. So we already started having regulations on crypto that helps builders and help people to grow their businesses. Interoperability there are already a lot of blockchains out there and blockchains they are operated in silos. So for example if we have Ethereum network is not really compatible to communicate with the block with the Bitcoin network. But at this point we already start we already see starting developers to build bridges between them. So we have a bridge that will allow you for example to transfer funds from Ethereum to Binance network and vice versa. Adoption and trust. It's pretty hard at this point or hard it's difficult to get to people to new people and due to the information that got out regarding the crypto and everybody's a bit afraid of it. It's pretty hard to bring the technology and its actual value to the bigger market. Okay. So, what did we learn today? There's more to Web3 than just crypto. Blockchain is a fancy word for decentralization data centers. In Web 3, your identity is your wallet. So, keep it safe. Uh we have deps like Defi. Okay. Thank you for your uh participation and if there's any I think we have a lot quite some time for questions. So, if you guys have any questions or curiosities, anything. >> Yes. more accessible. How do you see it going main >> in retail? >> Yes. And how do you how much time do you think >> that's a very good question and to answer that I will answer first with another question. Did you heard about Epsi? Okay, let me explain. Epsi is the European Union blockchain and starting from uh next year 2026, they will enforce everybody to use their blockchain. So use epsi and what epsi will do it will change everything from e-ign and everything from uh diplomats. So the every uh university every school in European Union will have to complain to the FC rules and what that means that everything that's legal paper like your diploma or your bachelor degrees will be on the blockchain and also the um and why they want to do this. So this is already something uh European Union has and there are already people that are working to towards this. There are I think two wallets one here in Romania that started to uh grow to allow people to move their identity there and also they would like to stop using the e-ign and use the wallet as confirming your identity. So instead of using e-ign you will use a wallet to sign the documents that we are already using right now. So I think it will be I'm I'm not sure I'm not thinking that next year it will already happen but I know that starting from next year it will get even more um adopted because of uh because of the European Union and the FC blockchain.