What is Web 3.0?
In a one-liner – it’s the next era of the Internet. Web 3.0 is the paradigm shift towards developing a more democratized Internet – an Internet that is governed by the collective rather than by corporations and large organizations.
Web 3.0 manifests through new technologies, such as cryptocurrencies, virtual and augmented reality, AI, and more. However, the Web 3 movement isn’t spearheaded by new technologies, but rather by a shift in how we as humans view and value the Internet. Web 3.0 is about creating an Internet for the people, by the people.
Before There Was Nothing, Then There Was The Internet
The Internet has fundamentally altered the world as we know it. This is not a controversial statement. Although it’s worth emphasizing because it is shockingly understated – the Internet changed everything.
Find an issue or topic that you care about today and – whether it’s economic, political, or social, – a quick Google search will show that the Internet has fundamentally reshaped or transformed that issue.
Economical – The Internet is directly responsible for the rise of globalization and eCommerce, two trends that have deeply impacted the world. More specifically, over the past 3 years (2017, 2018 and 2019), the S&P 500 Tech sector doubled in value and today technology sector stocks account for around 25% of the entire S&P 500 Index.
Social – this one is quite obvious, hell, even the word “social” has a new meaning compared to two decades ago. Once young startups like Facebook, Google, Instagram, and Twitter, now receive upwards of 40% of venture capital dollars in the form of ad spend from new startups. The potential future impact of new platforms like TikTok is still undecided, yet promising for social media influencers.
Political – Algorithms that offer cherry-picked news and are designed to incite than coalesce have become the norm. The Internet has affected political elections around the world and given rise to a new generation of bureaucrats who are Internet natives.
The Internet changed everything – financial markets, culture, elections, everything. There are so few exceptions to this rule that it might as well be a law of nature. A decade or two from now, events stemming from or directly caused by the Internet will have shaped the world multiple times over. This is why the fate of the Internet has become more important than ever.
Why We Need Web 3
The early years of the Internet were exploratory in nature. Similar to the ideology of Manifest Destiny – the belief that the expansion of the US throughout the American continents was both justified and inevitable – early tech pioneers explored, sequestered, walled, and commoditized the Internet. Over time, the Internet has remained “free” yet corrupted.
You probably see this in your life when you try to purchase a bus, train, or airline ticket. All of your searches are logged, sold, and manipulated against you. The Internet is yours to use, but you are not its master. Individuals around the world face even greater challenges, specifically in countries where the Internet is partially walled, restricted, or blocked entirely.
The hallmark trait of the Internet was the democratization of information, yet today, information is increasingly unreliable and in some instances downright harmful. Fake accounts controlled by bots are manipulating children. Realistic human faces created by AI will create even larger problems for society. The cost of fake news was over $70 billion in 2019 and will increase over time. The human condition for virality has given rise to digital viruses – false news stories – that travel six times faster than true news stories. This trend has extreme implications. Pandemics such as the Coronavirus have been negatively affected by the spread of false information which increases the risk of public safety.
The spread of misinformation isn’t the only issue. Within the next two decades, most of the world will be online, which creates new challenges.
How will data from smartwatches be handled so that personal information isn’t used against users when they try to obtain health insurance?
How do we ensure that platforms like Facebook or Twitter value their users as the value creator rather than the product?
When everything is digital, what is the best way to protect individuals and systems from cyber threats and attacks?
How do we design regulation that drives innovation and protects users in a world where the power of network effects results in single businesses that control Internet services? For instance, attempting to break up Google and Facebook is fighting the symptoms rather than treating the main cause of the disease.
What does the future look like with the world’s increasing reliance on AI algorithms and how can society prevent single points of failure?
More importantly, how do we fund and incentivize the development of open source architecture for cryptonetworks, AI algorithms, and other key Internet services?
These are only some of the existing questions that society is currently tackling.
Advancing Towards a Web 3.0 World
Now, some people would have you believe that Web 3.0 is about a world where middlemen don’t exist, where every protocol has its own token, and companies all run on various blockchains. In my opinion, this belief largely misses the mark of reality and while the intentions of these pontificators are sincere, they are not practical in nature.
Web 3.0 is about rearchitecting the existing services and products of the Internet so that they benefit people rather than entities. Cryptonetworks (Bitcoin and Ethereum) and artificial intelligence will be a means for achieving this goal. While it’s impossible to predict the future, I believe a world where Web 3.0 is actualized will have open-source protocols at the foundation while businesses act as interfaces that provide convenient access and additional features. Data will still be used to drive decision making but will not be used against the consumer. Data rights will be protected rather than stomped over in search of profits. Incentive and market mechanisms will help ensure that information is trustworthy and verifiable.
A Web 3 world will prioritize the sovereign individual rather than the wealthy elite and rent-seekers of the world. The rearchitecting of systems and protocols will focus on democratization and decentralization.
The first prerequisite to achieving Web 3.0 is to create Internet native money. Bitcoin and Ethereum have emerged as the Internet money of the future and it’s no surprise that this is where the first wave of innovation and experimentation is happening.
Open finance—or decentralized finance (DeFi)—refers to the paradigm shift from today’s closed financial system towards an open financial economy based on open protocols that are interoperable, programmable, and composable. This is the first phase in advancing towards a Web 3.0 world that is defined by permissionless open source protocols.
Once the financial rails of Web 3.0 are secured, new innovations and business models will help reshape Internet services and products. The Internet changed everything and the next phase of the Internet’s evolution, Web 3.0, will catalyze even greater change.
Final Remarks: Advancing Web 3.0
Sure, it’s easy to be dissatisfied and angry at the corporate elites, governments, or anyone who manipulates the Internet in order to benefit themselves. While understandable, I don’t think that’s the right sentiment.
Originally, the Internet needed pioneers and businesses to develop tools to make the Internet accessible and they were rightly rewarded. As long as the existing design of the Internet proliferates, we will continue to give up our data, time, and money to the major tech corporations in exchange for convenient products that promise free access. And to be honest, there isn’t one solution that will act as a panacea for all these issues.
As we approach a world increasingly controlled by technology, it’s vital that we design systems that realign incentives in favor of the collective. The transition from the existing Internet – Web 2 to Web 3 – is a multi-decadal process that will fundamentally shift how we interact with the Internet. The decisions that entrepreneurs, engineers, businesses, designers, and Internet citizens make today will cascade and influence future generations. I’m optimistic that the journey to Web 3.0 will be exciting and successful.
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