Web3 is a new phase of the internet built on public blockchains, where users own their money, data, and digital assets directly instead of storing them inside companies' accounts.
To understand web3, compare it to what came before. In web1, the internet was one-way, and most people could only read pages others published. The internet most of us use today is called web2; it lets anyone read, post, share, and interact, but almost always through platforms owned by companies that control your account, data, and content. Web3 keeps that ability to create and interact but changes who's in control: you own your identity and assets, not a company.
In practice, you use a self-custodial wallet, like MetaMask, as your login and account. A self-custodial wallet gives you ownership of your crypto and digital assets, helps prove who you are across apps, and lets you choose what to share—without a company in the middle. Because these apps run on public blockchains rather than private servers, it's harder for any single party to change the rules or lock you out.
Web3 is often used as an umbrella term to cover a wide range of activities, like payments, decentralized finance, NFTs, trading, and online communities.