The Internet is an evolving entity, reinventing itself at such a rapid rate that it is difficult to pause long enough to describe it. Web3 is the next iteration that is still in the early stages of development.
As with Web1 and Web2, hopes and idealistic plans abound. Will the biggest tech companies with the most resources dominate the space, or will disruptive technologies and new pioneers emerge that will foster a more equal internet?
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Web3 promises a decentralized future of the Internet built on blockchain technology and the Internet of Things. But what would that look like and can it be done?
Predicting how the next chapter of the Internet will unfold means re-exploring the previous web.
Web1 started out as a decentralized network connecting individual computers and servers. In the 1970s, the United States government developed ARPANET as a communication system linking military command centers. Academic and research institutions soon joined the network, and the Internet was born as an open source environment, meaning anyone could freely build on it.
In the 1990s, websites still had one main function: to display information. The first browsers were introduced, but at that time advertising was banned, which today seems hard to believe.
Web2 is the Internet as we know it now. It is a more interactive environment with social networks and creator platforms that allow users to publish and interact with content.
Web2 ushered in the era of Internet sales and marketing with mobile devices and improved broadband networks.
In 1996, Steve Jobs made a visionary prediction in a Wired magazine interview, “The best way to think of the Web is as a direct-to-customer distribution channel, whether for information or commerce. Bypass all intermediaries.”
Amazon’s success (AMZN) – Get the report from Amazon.com Inc.eBay (eBay) – Get the eBay Inc. report, and an increasingly digital shopping experience proved Jobs right. In 2012, e-commerce sales reached $1 billion all over the world.
With an advertising backbone, Meta (GOAL) – Get the report from Meta Platforms Inc.Alphabet (GOOG) – Get the report from Alphabet Inc.and many others have benefited greatly from dominating social media, search platforms, and video streaming services.
However, big tech has been criticized for violating user privacy, and that criticism comes at a price. EU data protection authorities have issued a total of $1.25 billion in fines since January 2021.
Lawmakers and users alike continue to question how companies collect and share personal data.
Some of the founding fathers of the Internet, including World Wide Web inventor Tim Berners-Lee, have even questioned whether the Web as it exists today can be the free and open forum it was promised. In a BBC broadcast in November 2019, he said:
“If you had asked me 30 years ago where we would be, I would hope that we would be using web tools effectively to promote democracy. But we see now with the exploitation that we saw with Cambridge Analytica, as well as disinformation, lack of accountability, blocking and censorship by governments, this is not what we are seeing.”
So is Web3 the solution?
Web3 aims to decentralize the Internet and launch a more multidimensional and immersive environment called the “metaverse” designed for even greater user engagement.
Blockchain technology is widely expected to change the way information is shared and stored, providing verifiable, trusted and distributed data on peer-to-peer nodes or servers that can enable the creation of new economic sectors and new forms of commerce.
In theory, decentralized applications can transfer much of the power and control to the public, marking a shift to a more user-owned web.
Peer-to-peer buying and selling of assets such as NFTs are just the beginning. The growing adoption of cryptocurrencies and ever-expanding mobile e-commerce have effectively removed middlemen from parts of the economy.
Consider the transaction fees charged to retailers by credit card companies. The seemingly small 1 to 4% adds up by moving through the supply chain. The inefficiency of small transactions forces many businesses to buy in bulk and, in effect, excludes smaller businesses.
Proponents of ‘Defi’ or decentralized finance are pushing and promoting more personalized financial models and even a future without centralized banks and stock exchanges.
Pioneers in the space include OpenSea, the foremost digital marketplace for crypto and NFT collectibles, Coinbase for buying, selling, and storing cryptocurrencies, and Decentraland, a metaverse environment where users can meet, chat, play, socialize, and attend events. .
However, critics have already begun to question some of Web3’s lofty ambitions and warn of possible manipulation.
Previous Twitter (TWTR) – Get the report from Twitter Inc. CEO Jack Dorsey criticized the Web3 space for being likely to be controlled by venture capitalists while appearing to be decentralized.
If Web2 is an example, idealistic projections can be tempered by market forces, industry leaders, and even politics. Can the dream of Web3 be realized or does the past already hold the answer?