The buzz around Web3 and how it can transform the Internet

  • The dominance of big technology over the use of the Internet and its control over personal data has given rise to calls for the decentralization of the network.
  • The third iteration of the Internet, Web3, will be defined by open source technology, using blockchain technology to be trusted and permissionless.
  • Web3 is still in its infancy and there are still big questions to be addressed.

As the Internet has evolved, its influence on us has been profound, shaping everything from what we read, the products we buy, the entertainment we watch, and how we communicate. It seems to know everything about us: our likes, dislikes, friends, buying habits, and favorite cat videos.

This intimate knowledge could be inferred as good or bad. You can get ads for products you didn’t know you wanted and get suggestions for news articles you didn’t know you wanted to read. This customization can be convenient but also invasive.

There are many concerns about who has access to and controls this personal information. Big tech has come under increasing criticism for its use and potential abuse of personal data, combined with its vast influence on the Internet based on its market dominance. As of 2019, 43% of total net traffic flows through Google (Alphabet), Amazon, Meta (formerly Facebook), Netflix, Microsoft and Apple.

This domain is sharpest within its primary categories, with Google controlling nearly 87% of the global search market and goal reaching 3.6 billion unique users on its four main platforms (Facebook, Whatsapp, Messenger and Instagram).

Regain the power of big tech

Web3 is a new iteration of the Internet that takes advantage of blockchain to “decentralize” management, thus reducing the control of large corporations, such as Google or Meta, and making it more democratic. Is defined by open source software, trustless (does not require trusted intermediary support), and permissionless (does not have a governing body).

Web3 draws its name as the third iteration of the Internet. The first iteration of the Internet consisted of read-only static web pages (see a BBC homepage August 2000 as an example). Web 2.0 added the ability to interact and produce content, making activities such as social networking and online banking and shopping possible.

The concept of Web3 has been around for over half a decade, originally coined by Ethereum co-founder Gavin Wood in 2014. However, it gained traction in 2021 with the proliferation of blockchain technologies, expanding NFT markets, venture capital investments and ongoing calls to reign in the power of big tech.

Rise of Web3 in practice

Today’s Internet, Web 2.0, relies on systems and servers largely owned by large corporations, raising concerns about system vulnerability and control. When Meta’s partner platforms suffered a global outage in early October, exacerbated by the centralization of their servers, there was calls to adopt Web3 and its decentralized architecture.

Advocates of Web3 adoption also advocate that Internet activity be governed by the many rather than the incentives and biases of the few. After all, why should big corporations control our data?

In a Web3 world, activities and data would be hosted on a network of computers using blockchain instead of corporate servers. The Internet would probably look the same, at least initially, but your Internet activities would be represented by your crypto wallet and websites hosted through decentralized applications (dapps), the digital applications run on a blockchain network.

The definition of Web3 may differ depending on the source; however, some consistent features are likely to be incorporated into the system:

Anonymous single sign-on will allow one username and authentication method across all websites and accounts, rather than individual logins for each site. This login will not require you to relinquish control of sensitive personal data.

This feature differs from the current Facebook or Google single sign-on, which grants access to your personal data until you revoke this access. However, all transactions on the blockchain are public, so technically everyone can see the assets and data assigned to a specific wallet. This transparency is also why wallets are anonymous, identified only by an address, not a name, unless the person chooses to assign personal details to their wallet(s).

Individual ownership and tokenization

Activities that contribute to Web3 are rewarded with a token (either NFT or fungible, eg cryptocurrency) to incentivize participation and distribute ownership.

For example, when posting a new social message, an NFT representing that post would be “minted” (generated) and stored as an asset in a crypto wallet. This token represents ownership over the message, which can then be exchanged with others through their wallets. If the post is popular, the returns will go to the owner of the token instead of the platform it is hosted on.

Along with the distribution of property is the distribution of decision-making power. Without a central authority, blockchains rely on the entire network to verify an activity by consensus. However, specific systems, such as those used in decentralized autonomous bodies can be set to democratize decision-making based on the quality or volume of a user’s investment in a site or dapp.

For example, based on their ownership stake in a platform, users can vote on the rules that govern a site (for example, what is classified as misinformation). These rules are then executed using smart contracts.

Web3 in its early days

While various Web3 dapps exist, there is no broad Web3 infrastructure like the Internet today. Significant widespread development, consolidation, and accessibility efforts are needed before the vision of Web3 becomes a reality, if it ever becomes a reality.

There are many considerations for widespread adoption, which means that Web3 may not live up to the promised expectations. Questions remain, for example, can Web3 scale sustainably? Will Web3 really deliver online sovereignty? Can we educate and change the culture of the masses to understand Web3?

There are no one-word answers to these questions, but we hope to unravel the potential and elusive challenges in future articles.

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