Web3 Explained

 

Web3 is the name some technologists have given to the idea of a new kind of internet service that is built using decentralized blockchains. the shared ledger systems used by cryptocurrencies like Bitcoin and Ether.

Inherent in the emergence of Web3 technology is there must have been a Web1 and Web2. So lets begin begin with a brief history of these other Webs.

Web1 refers to the  original internet of the 1990s and early 2000s. It was the internet of blogs, message boards, and early services like AOL and CompuServe. Most of what people did on web1 was passively read static web pages, much like an internet Wikipedia.

Web2 was the next phase of the internet. Starting around 2005, it is the Web we are most familiar, the one characterized by social media behemoths Facebook, Twitter and YouTube. In Web2, people began creating and posting their own content, actively participating in developing web content rather than passively reading it. But most of our creative content ended up being distributed and monetized by big companies, which kept most, if not all, of the money and control for themselves.

Web3 has become a catch-all term for a new and better internet. At its core, Web3 uses blockchains, cryptocurrencies, and NFTs to give power back to the users in the form of ownership.  The main principle of Web3 is that it will be decentralized, rather than controlled by governments and corporations, as is the case with  most of today’s web.

Let’s look at decentralization first and what that means for Web3. Today, all of the infrastructure of the popular sites we traffic online are owned by corporations and, to a lesser extent, controlled by regulations set out by governments. This turned out to be the simplest way to build network infrastructure. A private firm pays to install servers and set up software that people can access online, and then either charge us to use it or lets us use it for free, as long as we abide by their rules. 

But today, with blockchain technology, we have other options for how the Web should function.  As stated before, blockchain technology is a relatively new method of storing data online, which is built around the two core concepts of encryption and distributed computing.

Encryption means that the data stored on a blockchain can only be accessed by people who have permission to do so, even if the data happens to be stored on a computer belonging to someone else, like a government or a corporation.

And distributed computing means that the file is shared across many computers or servers. If one particular copy of it does not match all of the other copies, then the data in that file isn’t valid. This adds another layer of protection, meaning no one person other than whoever is in control of the data can access or change it without the permission of either the person who owns it or the entire distributed network. 

Web3 proponents envision it taking many forms, including decentralized social networks, play-to-earn video games that reward players with crypto tokens, and NFT platforms that allow people to buy and sell pieces of digital art and media. The more idealistic ones say that web3 will transform the internet as we know it, upending traditional gatekeepers and ushering in a new, middleman-free digital economy.

Ownership for Web3 means that the builders, operators, and users of a platform own a piece of what they use. Bitcoin and Ethereum are the earliest examples: in return for updating the ledger and keeping other actors honest, they receive a reward in Bitcoin or Etherium in exchange for securing the network. Token-based networks built on Ethereum and other smart contract blockchains have even introduced new models of ownership that are not necessarily the same as a cooperative or shareholder equity model. For example, ownership might be given in the form of a token provided for a service, such as providing liquidity for a trade, and that same token could also be used for governing the future changes to the network. The grand vision is that participants of any network will be able to own a piece of the products and services that they use everyday. 

Web3 platforms could give creators and users a way to monetize their activity and contributions in a way that today’s mega-platforms really don’t.

For example, Facebook makes money by aggregating user data and selling targeted ads. A web3 version of Facebook could allow users to monetize their own data, or even earn crypto gratuities from other users for posting interesting content. A web3 Spotify could allow fans to buy a position in up-and-coming artists, effectively becoming their patrons in exchange for a percentage of their streaming royalties. A web3 Uber could be owned by the drivers on the network.

Proponents also argue Web3 platforms could be democratically governed in a way that Web2 platforms aren’t. Internet behemoths like Facebook and Twitter are essentially autocracies with the power to ban accounts or change their rules on a whim. A blockchain-based social network would delegate those decisions to users, who could vote among themselves how to handle them.

Web3 would be less reliant on advertising-based business models than Web2, giving people more privacy as a result, with fewer trackers and targeted ads following them around and fewer giant companies tracking storing and selling their personal data.

Scaling issues will persist. Some skeptics simply believe that Web3 doesn’t make sense from a technical perspective. They point out that blockchains are significantly slower and less capable than standard databases, and that today’s most popular blockchains couldn’t even begin to handle the amount of data that Uber, Facebook or YouTube use on a daily basis. To make web3 services perform as well as consumers demand, significant upgrades to its data processing capabilities will have to develop.

But most importantly, Web3 aims to do what the internet has failed to do until this point: promote open services powered by decentralized protocols instead of centralized applications controlled by tech behemoths. Web3 can be seen as the read/write/own version of the internet, where creators and users can link programs and content directly, bypassing central intermediaries. Open services built on Web3 promote permissionless entry, optimize value and guarantee verifiability. The long term prospects of these services promise a far more resilient, fair and ethical internet for all parties. 

The democratization of Web3 holds strong appeal. Rather than accessing tech platforms in exchange for monthly fees and personal data, users participate in the governance and operation of the protocols themselves. Participants are true network stakeholders rather than just customers or products exploited by economic pressures.

In this environment, tokens or cryptocurrencies represent accessibility, governance and ownership of decentralized networks. More simply, whereas in Web2 you are the product, in Web3 you are the owner. 

The current landscape of the internet is still very much grounded in Web2 architecture. While users can access a range of services, each requires its own unique username and password and third-party platforms are typically still needed to process payments. While this model has ostensibly worked well enough for the past two decades, it’s been mired by the centralized control of big tech companies, which thrive on selling user data. 

Web 3 promises to change the dominance of big tech in our lives. Big tech knows so much about us, yet we know so little about them. Who among us doesn't want tighter controls around our data and content? Who isn't tired of others profiting off our data without compensating us. Don't forget, there's a reason giant social media sites are free. In reality, we should be charging them. They're using us. But not in Web3. Where our identity, data and content will always remain with its rightful owners... US!!

Web3 will not be replacing Web2 anytime soon, if ever. And it may not be for everyone, but neither is the constant invasion of privacy Web2 has brought forth

The idea of not having to turn over all our personal information just to interact on the internet has a strong visceral appeal to many. Hence Web3, an internet owned by the builders and users, orchestrated with tokens, all playing out on new and improved blockchains holds enormous promise for the forthcoming digital economy revolution.