What is Web3 and what can it fix?

Today’s internet is a medium of information through which corporations compete to control as much user data and as many ideas as possible. More firms, developers, and users are talking about Web3, the third “generation” of the internet, in which blockchain technologies will play a major role.

According to this new philosophy, authority will no longer be concentrated in the hands of a few large corporations and institutions. Everyone will have an equal opportunity to earn and build a business.

Let’s dive deeper into the topic to discover if it really is true and learn about the highest expectations of Web3.

How the internet has changed

In the 1990s, Web1 worked like a giant library of data collected from many computers connected to a network and then displayed on a screen.

Publishing content was not easy — it required technical skills, so most people were readers rather than authors. But anyone could do it if they wanted because then the internet worked as a decentralized structure.

Over time, the network got bigger and faster. Today, over three billion people use it, spending 80% of their day accessing and browsing online. Publishing something on the Web2 internet no longer requires any special skills. Therefore, the number of creators and tools for them has rapidly increased.

This was a result of three major shifts:

Mobile phones

Until 2007, people used to go online for a couple of hours from their home computers. But now, they stay connected around the clock thanks to smartphones.

Social networks

The internet supported anonymity until the early 2000s. MySpace and Facebook encouraged users to find online friends and share photos publicly. With Airbnb and Uber, it became normal to get into a car with a stranger and entrust the keys of your property to unknown tourists.

Cloud technologies

Previously, firms had to buy and maintain expensive servers on their own to maintain websites. Now you can rent computing power from Amazon, Google, and Microsoft, making the process of starting an online business much cheaper and more straightforward.

That’s how the decentralized internet turned into a set of interactions between distinct closed systems. Each of them is fighting for space in the market and for users. After all, the more users a product has, the higher its value is.

What are the cons of Web2

Fight for attention

At first, the internet business model rarely involved any economic relationship between service providers and users. The latter, for example, didn’t want to enter their credit card numbers online. So to attract customers, companies offered free content and ran ads that a person could not miss.

If broadcast television delivers similar content to different demographics, then the content on social networks, in turn, is different for each user. The polarization of opinions and interests can often result in online quarrels amongst internet users, but ultimately stimulates the growth of companies providing the service.

Content has an owner, and it is not the author

Service creators own everything that the user says, posts, and does — profile data, publications, link clicks. Owners can sell their content to advertisers to continue stimulating the “attention economy’’.

Censorship and monopoly

Almost 90% of sites are in the hands of only four hosting providers that support the most commonly used services: Facebook, Twitter, Airbnb, Uber, Reddit, Netflix. They can block a user’s access to platforms if they so wish.

Countries can do the same with the help of filtration systems. For example, China, where the government has blocked access to Twitter, Google, and Wikipedia more than once.

Security threats

Decentralized creativity and centralized storage are the ideal conditions for hackers. Infinite amounts of data ‘just sitting’ in a few processing centers, as if it were the central bank with several entrances.

More than $100 billion is spent on global cybersecurity every year. And the annual damage that cybercrime may cause by 2025 is estimated to be $10.5 trillion.

Web3 vs. Intermediaries

Institutions help record and regulate relationships and validate one’s judgments. However, all these “records” can still be very subjective. Their author is still a person capable of bias and manipulation.

That’s why it’s better to exclude the human intermediary from the chain, and instead implement blockchain to achieve total objectivity. A blockchain is a public, decentralized, digital ledger of who owns what on the network: money, ownership, medical records. Each new record in this registry will refer to the previous one and can’t be faked.

Thanks to blockchain, users do not have to check these records themselves — completely anonymous and unbiased network participants do this.

Other benefits of Web3

Authors retain the rights to their content

It is now possible to trade your assets on a decentralized internet without intermediaries (who usually dictate their own rules and charge fees for transactions). On the Web2 internet, you can create something of your own, i.e. publications on Twitter, but everything that a user does on the site belongs to the platform itself.

Economy without middlemen

Decentralized finance, or DeFi, allows you to change and invest in currencies, borrow and lend, and secure loans. Bankers are no longer needed to make transactions, so costs are lower, and there is no bias.

“Decentralized finance, or DeFi, is the cryptocurrency Wall Street,”

Gilles DC, marketing and sales specialist

Decentralized organizations

Any company can be a network of interested parties and each participates in the process based on certain conditions:

  • If an employee did the work, they receive a salary
  • If a client receives a service, the company receives payment
  • If a borrower meets the bank’s requirements, they receive a loan
  • If an investor sponsors a company, they receive the benefits of it

All these conditions can be written into smart contracts via the blockchain, excluding intermediary managers. And by organizing a decentralized autonomous organization (DAO), you can also distribute management rights among the participants in the form of native tokens. Their number will determine which decisions a person can affect and which they cannot.

Empowering the creator economy

Web3 expands the capacity for global mass collaboration and contributes to more direct democracy. This creates a favorable environment for creators looking to sell and share their works without fear of having them stolen or forged. For example, DEIP provides a special creator economy protocol that enables the discovery, evaluation, licensing, and exchange of intangible assets. Moreover, it provides creators with secure and quick transactions.

What to expect from Web3

Web3 goes far beyond money and cryptocurrencies. This new internet promises to build a “global village” — a world focused on people and interpersonal interaction, which will contribute to the development of technology, business, and the promotion of private initiatives.

“It has to go through the same adoption curve that Web2 and Web1 did. And in theory, it could even go faster. Because tokens naturally have an incentive mechanism built-in. The token companies don’t need to do much marketing. The marketing is done by the users.”

Naval Ravikant, CEO and co-founder of AngelList

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