Web3 vs Web2: where are we now?

A significant transformation can be seen in past decades on internet. We have moved from web1 (the initial iteration, was largely static) to Web2 (interactivity, social media, and user-generated content, but also centralized power in the hands of a few tech giants) and web3 (a decentralized, blockchain-based future). But the question arises: where are we now in 2025 in this evolution?

Understanding the Fundamentals

• Web2 refers to the version of the internet dominated by platforms like Google, Facebook, Amazon, and YouTube. It thrives on user-generated content, cloud computing, mobile accessibility, and centralized data ownership. While it brought unprecedented connectivity and convenience, it also raised concerns about privacy, surveillance capitalism, and monopolistic behavior.
• Web3, on the other hand, is built on decentralized technologies blockchain, cryptocurrencies, NFTs, and DAOs (Decentralized Autonomous Organizations). The core promise of Web3 is to return control to users: enabling data ownership, peer-to-peer transactions, and community-governed platforms without intermediaries.

Current State of Web2 (2025)

Despite growing criticism, Web2 platforms are still dominant:

• User Base:
  Billions still use Facebook, Instagram, and YouTube daily.
• Business Model:
  Ad-based revenue remains the standard.
• Data Control:
  Users still largely give up control of their data in exchange for free services.
• AI Integration:
  Web2 platforms are integrating advanced AI tools to enhance personalization and automation, solidifying their relevance.

However, there is increased regulatory scrutiny (especially in the EU and US) around data privacy, antitrust issues, and algorithmic transparency.

Where Web3 Stands Today

Web3 has made major strides, but faces challenges:

Successes:

• Crypto Adoption:
  Cryptocurrencies are increasingly used beyond speculation, including remittances, gaming, and DeFi (Decentralized Finance).
• NFT Evolution:
  NFTs have moved beyond art into gaming, ticketing, real estate, and identity verification.
• DAOs and Community Governance:
  Some projects like ENS, Gitcoin, and Arbitrum are experimenting with real community-led governance.
• Wallet Infrastructure:
  Tools like MetaMask and Coinbase Wallet have become more user-friendly and mobile-ready.

Challenges:

• Scalability:
  Despite improvements (Layer 2s, rollups), blockchain networks still struggle with scalability and high gas fees.
• UI/UX:
  Web3 platforms often remain technically complex for mainstream users.
• Security:
  Hacks, rug pulls, and smart contract vulnerabilities continue to plague the space.
• Regulation:
  Governments are catching up fast with new regulations around KYC, AML, and crypto taxation.

Bridging the Gap: Web2.5?

A new term has emerged in recent years: Web2.5 a hybrid model that leverages the decentralization ethos of Web3 while maintaining the accessibility and UX of Web2. Examples include:

• Reddit’s NFT avatars, =integrated into user profiles.
• Instagram and Twitter’s NFT integrations, now discontinued but proof of concept.
• Gaming platforms that use blockchain in the backend while retaining familiar interfaces.

This transition phase highlights that adoption may not be binary but rather a slow integration of Web3 principles into the Web2 ecosystem.

Where Are We Headed?

• Mainstream Web3 Adoption:
  Likely to come via gaming, AI-integrated platforms, and creator monetization tools.
• Better Regulation:
  More clarity will reduce scams and increase institutional trust.
• Decentralized Identity:
  Wallets as digital passports could become standard.
• AI + Web3:
  The intersection of decentralized systems and AI may unlock new opportunities in ownership and content provenance.