Recently, the Finance Minister, in her address at the 75th Annual General Meeting of Indian Banks' Association, highlighted the use of Web3 and Artificial Intelligence (AI) technology in fraud detection and to generate early warning signs in an unforeseen event.
- Also known as Web 3.0, it is a decentralised internet to be run on Blockchain technology.
- Gavin Wood, the founder of Ethereum (a blockchain technology company) used the term Web3 first in 2014 and in the past few years, many others have added to the idea of Web3.
- It would be different from the versions in use, Web 1.0 and Web 2.0.
- In web3, users will have ownership stakes in platforms and applications unlike now where tech giants control the platforms.
Benefits of Web3
- Web3 will deliver a “decentralized and fair internet where users control their own data”.
- Web3 enables peer to peer (seller to buyer) transactions by eliminating the role of the intermediary.
- Currently, if a seller has to make a business to the buyer, both the buyer and seller need to be registered on a “shop” or “platform” like Amazon or Ebay or any such e-commerce portal.
- Platform authenticates that the buyer and seller are genuine parties for the transaction.
- Web3 tries to remove the role of the “platform”.
- The spirit of Web3 is Decentralized Autonomous Organization (DAO) which is that all the business rules and governing rules in any transaction are transparently available for anyone to see and software will be written conforming to these rules.
- With DAO, there is no need for a central authority to authenticate or validate.
About Blockchain Technology
- A blockchain is a distributed database that is shared among the nodes of a computer network.
- As a database, a blockchain stores information electronically in digital format.
- Blockchains are best known for their crucial role in cryptocurrency systems, such as Bitcoin, for maintaining a secure and decentralized record of transactions.
- It guarantees the fidelity and security of a record of data and generates trust without the need for a trusted third party.
About Indian Banks' Association (IBA)
Formed on 26 September 1946 as a representative body of management of banking in India operating in India – an association of Indian banks and financial institutions based in Mumbai.