What is Web3?

Web3, is becoming a hottest buzzword lately.

Next generation of internet? Decentralized and is built in blockchain? VCs are pulling resources into building it now? and yet Elon Musk tweeted, "I’m not suggesting web3 is real – seems more marketing buzzword than reality right now." 


So what is Web3?

also knows as Web 3.0, is an idea for a new iteration of the Internet that incorporates decentralization, often contrasted with Web2, wherein data and content are centralized and controlled by some 'Big Tech' companies, and where you can read & write interactive with the rise of PHP etc. 

Web3 firstly was coined by Gavin Wood, Enthereum co-founder in 2014, and this term is starting getting more traction lately in 2021 among cryptocurrency enthusiasts, large tech companies such as Google, Twitter, Reddit, Discord, Facebook etc, and venture capital firms. 

How would it impact our everyday's life from the recent 'imagination'?

There are a few major take-aways from our view that is worth noting that may shape our futuristic internet or socially interactive activities in one way or another: 

(1) Decentralization in Web3 vs Centralization in Web1&2: 

Since dot.com's bubble, some leading tech companies have built the foundation of the technology, data, social media and cloud infrastructures for the globe internet citizens. It opens the door to era of the 'www', however, it also brought some concerns along the time, such as 'Big Tech Monopolies', data security and privacy issues, unstable infrastructures etc. 

As we all know, the total combined market capitalization of stocks of FAANG big tech companies (and MAGAs), is about $7.9 trillion (as of Jan 2021), and it is roughly 25% of total market capitalization of S&P 500 companies. Big Tech owns network, technology and infrastructure that are so scale-driven that, once they get to that scale, it's very, very difficult for competition. 

However, the internet and data are continuing to explode yearly. And approximately every 1.5 years, the world's data is about to double. Does this centralized technology continue to perform and empower internet citizens? Not necessarily. As we all have witnessed, during the pandemic, more and more enterprises move into cloud, and more businesses have transformed to conduct online, which brought the demand of cloud services & tech support to the next level. However the recent outrages, from google, facebook, AWS etc,  have failed us and affected a varieties of large and small businesses, including Disney, Shopify and other giant companies who are using their centralized infrastructure. Are they and will be reliable in future? We don't know yet, but obviously, this era of centralized infrastructures is not the most optimal or efficient way of facilitating the global increasing digital activities. 

(2) Blockchain-based social networks to improve data privacy, security, and scalability: 

In web2, everyone has to register different accounts with different platforms. Instead, you will have one single account, which will be able to move from facebook to twitter, or google or snapchat, or shopping websites etc. 

The idea is that everyone participates with the Web3 by issuing a token on blockchain, with which you can take the ownership of your own activities or entities, and also enables you to weigh in on decisions that you've made on such platforms, such as removing any posts containing misinformation etc. That's also why Web3 could be a balm for antitrust woes and monopolistic business practices. 

Undoubtedly, at the core of the next gen of Internet, we see privacy, security and scalability, with a hope that everyone owns their own data, and stewardship, rather than by a few giant tech platforms where personal information could be misused, censored, or sold for profitable purposes. 

(3) POC (Proof of Concept) behind Web3 are blockchain, DAO (Decentralized Autonomous Organizations) and other cryptos: 

Built on blockchain with decentralized architecture, the Web3, next gen of web, is about to bring power back to people, at least hypothetically. 

Gavin Wood, who coined the term Web3 in 2014, believes decentralized technologies are the only hope of preserving liberal democracy.

"Yes, web2 is a failure of regulation, but the answer isn’t better regulation; there needs to be a new layer of technology, because regulatory failures are inevitable."

At the most basic level, Web3 refers to a decentralized online ecosystem based on the blockchain. Platforms and apps built on Web3 won’t be owned by a central gatekeeper, but rather by users, who will earn their ownership stake by helping to develop and maintain those services.

"I think a degree of truth is necessary. And by this I mean openness, transparency. Blockchain technology uses both cryptography and certain game theory economics to deliver its service. We need to understand the node infrastructure of the network; is it really peer-to-peer or is it actually run from one data center by a company that manufactures and sells hardware and is required to be consulted before a new node can come online? The details make the difference as to whether it's basically just Web 2.0 in disguise or whether it is actually legitimately open, transparent, decentralized, peer-to-peer." Gavin Wood said. 

"Blockchain is fundamentally different. It's effectively a social construct. It's a set of rules. And the only thing that these rules have going for themselves is that there is no one with arbitrary power within the system."

(4) The skepticism and optimism of Web3: 

It doesn't take long to find skeptics of Web3.

James Grimmelmann, a Cornell University professor who studies law and technology, has become vocal about his doubts.

"Web3 is vaporware," said Grimmelmann, referring to a product that's announced but never delivered.

"It's a promised future internet that fixes all the things people don't like about the current internet, even when it's contradictory."

Right now, the idea of the entire Internet reinventing may sound like some far-away digital utopia. But Web3 is driving new conversations and lots of new money, particularly from crypto investors.

Some criticized that trying to explain Web3 can be exasperating, since it's a loosely-defined term that takes on a slightly different shape depending on who is defining it but, that's the case with all new frontiers of technology.

Experts say, in the best case scenario for Web3 enthusiasts, the technology will operate alongside Web 2.0, not fully supplant it.

In other words, blockchain-based social networks, transactions and businesses can and will grow and thrive in the coming years. Yet knocking out Facebook, Twitter or Google completely is not likely on the horizon, according to technology scholars.

Right now, he said, Web3, albeit mostly theoretical, is the thing.

"There are a lot of people who have money to invest," he said. "And they need some vision to throw money at."