Unit 10 · Session 4
Web 2.0, Web 3.0, and Digital Strategy Synthesis
Today's Agenda
- The Evolution of the Web (Web 1.0 → Web 2.0 → Web 3.0)
- Architecture of Web 3.0 (Decentralization, Semantic Web, Smart Contracts)
- Business Opportunities & Governance (Tokenomics, Digital Assets, Trust)
- IT 231 Full Course Synthesis (Connecting Units 1 through 10 for BBA Managers)
🎯 Learning Objectives
By the end of this session, you will be able to:
- ✅ Compare Web 1.0, Web 2.0, and Web 3.0 across architecture, data ownership, and revenue models.
- ✅ Identify the core pillars of Web 3.0: Decentralization, Blockchain, and the Semantic Web.
- ✅ Evaluate business opportunities and managerial risks in decentralized applications (dApps).
- ✅ Synthesize the entire IT 231 curriculum into an actionable managerial framework.
The Evolution of the Web
The First Website (1991)
The Three Eras of the Web
Web 1.0 (1990s–2004)
"Read-Only"
Static HTML pages, corporate brochureware, centralized web servers, one-way content consumption.
Web 2.0 (2005–Present)
"Read-Write"
User-generated content, social networks (Meta, YouTube, TikTok), cloud platforms, targeted advertising.
Web 3.0 (Emerging)
"Read-Write-Own"
Decentralized ledgers, verifiable digital ownership, smart contracts, semantic data, edge computing.
🧪 Activity: Web 1.0, 2.0 or 3.0?
1. A 1998 company website with a phone number and no way to comment. → Web 1.0 (read-only)
2. Writing a product review on Daraz. → Web 2.0 (read-write)
3. Owning a digital ticket on a blockchain that you can resell without the organiser. → Web 3.0 (read-write-own)
4. Uploading a TikTok video. → Web 2.0
5. An insurance payout made automatically by a smart contract. → Web 3.0
🎬 Web 1.0 → 2.0 → 3.0
🏢 Web 2.0 Characteristics: Business Examples
- 👥 User-generated content: YouTube and Wikipedia are built by their users. TripAdvisor reviews sell hotels.
- 🤝 Participation and sharing: brands run hashtag campaigns, and customers do the marketing.
- 🧩 Platforms and APIs: Pathao and Foodmandu use Google Maps inside their apps.
- 📱 Rich, mobile, always-updating apps: Gmail updates without reinstalling, and there's no "version 2 CD".
- 📊 Data as the business: Facebook and Google earn from ads targeted using user data.
Web 2.0 = the web as a platform, where users create the value.
The Web 2.0 Paradox: Convenience vs Centralization
Web 2.0 unlocked global social interaction and frictionless e-commerce, but created severe structural dilemmas for businesses and consumers:
- Platform Lock-in: Businesses build audiences on third-party platforms (Instagram, TikTok) but do not own customer relationships or algorithms.
- Data Commodification: Tech conglomerates monetize user behavioral data without direct financial compensation to creators.
- Single Points of Failure: Centralized cloud outages take down thousands of corporate services simultaneously.
Core Pillars of Web 3.0
1. Decentralized Architecture
Rather than relying on central corporate databases (AWS, Google, Meta), Web 3.0 applications run on decentralized peer-to-peer networks.
- Decentralized Applications (dApps): Software that runs on a distributed computing blockchain rather than a single server.
- Decentralized Storage: Protocols like IPFS (InterPlanetary File System) distribute file chunks across global nodes rather than a single data center.
- No Single Point of Failure: Networks remain operational even if multiple participating nodes go offline.
Three Kinds of Network
⛓️ How a Blockchain Works (in 4 Steps)
- Transactions are grouped into a block: "Ram pays Sita 1 coin".
- Each block gets a hash, a unique digital fingerprint, and also stores the previous block's hash.
- Thousands of computers (nodes) keep copies and must agree before a block is added (consensus).
- Change one old transaction and its hash changes, which breaks every block after it. The other nodes reject it.
That's why blockchains are called tamper-evident: no single owner, and very hard to rewrite history.
🎬 What's Inside a Block
2. Semantic Web & AI Integration
Tim Berners-Lee’s original vision: enabling machines to understand the *meaning* and relationships of web data, not just keyword syntax.
- Contextual Intelligence: AI models parse semantic metadata, connecting user intent directly with services.
- Automated Agents: Autonomous software agents negotiate bookings, supply orders, and payments on behalf of managers.
- Interoperability: Data flows seamlessly between different corporate ERPs and consumer applications.
3. Digital Ownership & Tokenomics
Web 3.0 introduces verifiable native digital property rights without relying on central intermediaries.
| Mechanism | What It Enables | Business Application |
|---|---|---|
| Smart Contracts | Self-executing code when agreed conditions trigger | Automated escrow in international trade, instant royalty payouts |
| Self-Sovereign Identity (SSI) | Users own and control their digital credentials | Verifiable customer KYC without storing plain passwords |
| Tokenized Assets | Fractional ownership of physical and digital assets | Real estate crowdfunding, intellectual property licenses |
📜 Worked Example: A Crop Insurance Smart Contract
A smart contract is a program on a blockchain that runs automatically when its conditions are met. No clerk or claim form is needed.
IF rainfall in Chitwan < 50 mm during July
THEN pay each insured farmer Rs 20,000
- An official weather data feed (an "oracle") reports the rainfall.
- If the condition is true, money is paid out automatically, within minutes and to everyone.
- ✅ Fast, cheap and transparent. ❌ If the data feed is wrong, or the code has a bug, the payment is still made.
(These are illustrative figures. Real projects such as Etherisc have trialled parametric crop insurance in Kenya.)
🎬 Smart Contracts
Web 2.0 vs. Web 3.0: Strategic Comparison
| Dimension | Web 2.0 | Web 3.0 |
|---|---|---|
| Core Model | Client-Server (Centralized cloud) | Peer-to-Peer / Distributed Ledger |
| Identity | Login with Google / Apple / Facebook | Cryptographic Wallet / Decentralized ID |
| Data Control | Corporate platform owns user data | User retains cryptographic ownership |
| Trust Model | Institutional trust (banks, platform terms) | Algorithmic consensus (cryptography & code) |
| Monetization | Targeted behavioral advertising | Token economies, protocol microtransactions |
Managerial Challenges in Web 3.0
While promising, business executives must approach Web 3.0 with realistic risk governance:
- ⚠️ Regulatory Ambiguity: Evolving laws regarding digital assets, cross-border token taxation, and consumer protection.
- ⚠️ Scalability & Speed: Distributed consensus can be slower and more computationally expensive than high-speed centralized SQL databases.
- ⚠️ User Experience (UX): Managing private keys and seed phrases is still too complex for mainstream retail consumers.
- ⚠️ Smart Contract Vulnerabilities: Code bugs or logic flaws are irreversible once deployed on an immutable chain.
🌍 Real Case: The DAO Hack (2016)
- The DAO was a fund run entirely by smart contracts on Ethereum, with no managers. Investors voted with tokens.
- It raised Ether worth about US$150 million, making it one of the biggest crowdfunds at the time.
- In June 2016, an attacker used a bug in the code to drain about a third of the funds (about 3.6 million Ether, roughly US$50–60 million then).
- Ethereum's community voted to rewrite history (a "hard fork") to return the money. Those who refused kept the old chain as Ethereum Classic.
"Code is law" also means a bug is law, unless people step in.
🌍 Real Case: The Ronin Bridge Hack (2022)
- Axie Infinity was a "play-to-earn" blockchain game where players earned tokens, popular in the Philippines.
- Its Ronin network relied on just 9 validators, and attackers needed control of only 5.
- In March 2022, hackers stole about US$600 million in crypto. The FBI blamed North Korea's Lazarus Group.
- The network was "decentralised" in name but centralised in practice.
Managers should ask: who actually controls this system?
⚖️ Web 3.0 for Business: Opportunities vs. Risks
✅ Opportunities
Faster, cheaper cross-border payments
Automatic contracts with fewer middlemen
Supply-chain tracking (for example, proving tea is really from Ilam)
Customer loyalty tokens and digital ownership
⚠️ Risks
Code bugs and hacks (The DAO, Ronin)
Price swings in tokens
Unclear or strict laws (Nepal Rastra Bank has declared crypto trading illegal)
Energy use and scaling limits
🎓 Course Capstone Synthesis
IT 231: IT and Applications (BBA)
The BBA Technology Stack (Units 1–10)
🎓 Capstone Activity: Build a Digital Strategy
Business: a family-run handicraft (dhaka and pashmina) shop in Bhaktapur that wants to sell worldwide.
In groups, pick one idea from each:
1. 📱 Marketing (Unit 10.1): which channel?
2. 📊 Data / AI (10.2): what will you measure or predict?
3. ☁️ Cloud and security (10.3): SaaS store? How do you protect customer data?
4. 🌐 Web 2.0/3.0 (10.4): reviews and social, or blockchain proof of authenticity?
Five Key Takeaways for Future Business Leaders
- Technology is a Business Enabler: Never implement IT for its own sake; evaluate every investment by its ROI, efficiency, and risk mitigation.
- Data is an Enterprise Asset: High-quality, normalized databases and analytics drive competitive advantage; garbage data produces flawed decisions.
- Cloud Transforms IT Financing: Shift capital expenditure (CapEx) to flexible operational expenditure (OpEx) to accelerate time-to-market.
- Security is an Organizational Responsibility: Human error and weak policies breach systems faster than technical exploits; enforce digital literacy and compliance.
- Continuous Adaptation is Mandatory: From Web 2.0 to AI, contemporary technologies will continually rewrite the rules of competitive commerce.
💬 Final Reflection
1. Which IT 231 topic will matter most in the job you want, and why?
2. In 10 years, will most businesses run on Web 3.0, or will Web 2.0 platforms stay dominant?
3. Write one sentence of advice to next year's IT 231 students.
Exam Practice 📝
Short answer
- Differentiate between Web 1.0, Web 2.0, and Web 3.0.
- Explain the key characteristics of Web 2.0 with business examples.
- What are the core technologies of Web 3.0? Explain smart contracts with an example.
- Discuss the opportunities and risks of Web 3.0 for businesses.
Revise the answers in the full note linked on the last slide.
Image & Video Credits
Images
- The World Wide Web project (first web page): Tim Berners-Lee, public domain, via Wikimedia Commons
- Fordham Women History edit-a-thon 2019: Jim.henderson, CC BY-SA 4.0, via Wikimedia Commons
- Centralised, decentralised and distributed networks: 1983 (Commons user), CC BY-SA 3.0, via Wikimedia Commons
- Blockchain Illustration 2: Davidstankiewicz, CC BY-SA 4.0, via Wikimedia Commons
- BBA technology stack diagram: made for this course
- Square academic caps (graduation hats): AKS.9955, CC BY-SA 4.0, via Wikimedia Commons
Videos (YouTube)
- Calibraint, "Web 1.0 Vs. Web 2.0 Vs. Web 3.0: What's The Difference?" (0–88 s)
- Simply Explained, "How does a blockchain work - Simply Explained" (54–121 s)
- Simply Explained, "Smart contracts - Simply Explained" (39–124 s)
Congratulations on Completing IT 231! 🎉
Next Steps: Review practice sets, review lab spreadsheets, and prepare for semester examinations!
📖 Related chapter notes
Read first, then revise with this deck: