How decentralisation powers the next generation of the internet?
If you haven’t paid closer attention to the crypto space, you could be forgiven for being confused by the sudden explosion of references to “web 3” or “web 3.0.” The term is nearly ubiquitous now, from Twitter and LinkedIn over to Facebook. But what does it mean?
In general, web 3 refers to a newly-emerging structure or stack that reshapes how users interact with and through the internet. In even simpler terms, web 3 deals with a decentralised data flow on the internet.
Web 1: The Reader’s Web
In the early, halcyon days of web 1, data was read-only. Think Netscape and the early browsers - users could access information, but that’s it. No in-browser games, and few (if any) ads. Websites were simple and straightforward - users visited, read, sometimes bought, and left. The data flow was all one-way.
There were benefits to the read-only internet. Content creation tended to be richly rewarded, and there was a general sense of democratisation. Craigslist and Wikipedia are good examples of sites that were strongly creator-driven, but with little initial control or oversight. Visitors to those sites could consume information at will. There were few gatekeepers, and info could be widely distributed.
The web 1 era lasted till around the turn of the century; moving into the 2000s, web 2 would bring a new structure, one in which information was largely siloed and social networks started to concentrate knowledge production in a handful of companies.
But before that happened, the transition between web 1 and web 2 spawned a golden age of blogging. The early blogosphere exemplified much of what made web 1 so powerful: the ability for anyone to start a blog, on anything, and be widely read with few controls on content and no restrictions on distribution.
Web 2: Two-way data flows
As the first decade of the 21st century progresses, however, web 2 took a slightly different development. Blogging didn’t die; it was one of the first iterations of the new read-write internet. But blogging was quickly upstaged. YouTube stars emerged, followed by social media influencers on Instagram and Twitter, and livestreamers on Facebook and Twitch. Users could create their own content and publish it, but there was a cost.
Centralisation became the name of the game. Social media and tech giants merged and amalgamated time and time again, bringing Instagram and WhatsApp under the control of Facebook. The process also went on behind the scenes: web 2 witnessed the emergence of cloud hosting, with four companies - Amazon Web Services, Azure, Google Cloud, and Alibaba CLoud - providing cloud infrastructure and storage for 67% of web businesses.
As major web 2 companies became more centralised, gatekeeping and content control grew in importance. More and more restrictions were put in place, for good or ill.
By this point, web 2’s problems are well-known. Privacy issues and an advertising business that exists to sell information to companies, rather than products to consumers, have provoked a slowly-growing backlash in recent years.
The result was web 3.
Web 3: User-owned web
Web 3 is many things. It’s a read-write-own system that empowers users to control their own data. It’s the next logical step in the growth of the internet: while web 1 had 100,000 websites, web 2 produced 1,000,000 websites, and web 3 is poised to create 1,000,000,000.
In many cases, blockchain technology forms the foundation of web 3. The protocol layer underpins the applications and access points users frequent every day. Layer 1 and Layer 2 blockchains - Ethereum, Solana, Avalanche, Polygon, Optimism, and more - provide users with security and ownership. In some cases, they also incentivise participation in a read-write-earn model.
There’s no set form to web 3. The idea itself is only a few years old, and many of the big names and breakthrough technologies that gain press today will doubtless be replaced by better versions in the near future. Web 1’s initial browsers - hello, Netscape! - didn’t last terribly long, and some of today’s web 3 frontrunners will likely go the same way.
But whichever apps and projects lead the way, web 3 projects share one final trait: decentralisation. Like the blockchain protocols that form the foundation, most web 3 projects share a bit of decentralisation DNA. There’s a renewed emphasis on user control and privacy, and fewer gatekeepers.
Instead, users leverage the power of the blockchain to take ownership of their own data and their own creations. Mint an NFT in the metaverse? It belongs to you, not the company running the metaverse. View ads on a web 3 browser and earn tokens in exchange? Again, your data, your rewards.
Blockchain-powered data flows
Beyond ownership, web 3 represents a sea change in data flow. Big Tech infamously made money by harvesting and selling user data; web 3 grants much more control of that process to users. And blockchain powers it all.
Layer 1 solutions like Ethereum enable users to participate in decentralised finance (DeFi) lending and borrowing.
Crypto games powered by Solana provide players with unique NFTs that can be bought, sold, and traded to anyone with a compatible wallet. Gaming plus the metaverse opens the door to unparalleled ownership of an emerging digital world, with web 3 as the glue that holds it all together.
At the top end, the emphasis is on ease of use and interoperability. Crypto-powered browsers like Brave feature native tokens, built-in crypto wallets, and easy integration with major cryptocurrency exchanges, all while allowing users to control their own ad settings. Products like Phuture bring high-end financial instruments like indexes to the world of DeFi, empowering users to leverage tools built on underlying Layer 1 blockchains.
The natural expansion of the internet, the emergence of blockchain and crypto technologies, and a general frustration with heavily-centralised web 2 Big Tech companies all come together in web 3.
Think Bit Tech, not Big Tech.
