Owith full attention – and divisive debates – around Web 3 last month, you might think the idea of a more decentralized Third Internet Age is entirely new.
In truth, “Web 3.0” is part of a two-decade discussion of the societal, cultural and political distortions created by the dominance of major internet platforms such as Google and Facebook and the negative data impact of Web 2.0. driven economy. It far predates the latest crypto-based iteration as Web 3, which Ethereum and Polkadot co-founder Gavin Wood spearheaded via a 2014 blog post that CoinDesk reposted last week.
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Both sides of this raging debate have reasonable views. There is the Position of Chris Dixon that Web 3 projects create real value and the counterbalance Position of Jack Dorsey that the term is just a buzzword exploited by venture capitalists to increase their equity and token investments.
The fact that smart people – including two famous “Tims” (discussed below) – have been exploring a Web 2.0 release for so long suggests that Web 3 projects have laudable ambitions and that there will be public benefits and business profits if they are successful.
On the other hand, this long history reminds us that solving a very big problem is difficult and that investors would be wise to take grandiose promises with a grain of salt.
Putting aside any opinions you may have on either of these positions, it is important to focus on the fundamental structural issues of Web 2.0 and why they need to be changed. This reveals a fundamental problem that calls for progress in Web 3: the mismatch between the interests of the giant corporations that dominate the Internet and those of the general public.
Blockchain technology can help solve this problem, but it is by no means the only part of the solution or necessarily the most important part. We need a mix of technology (both decentralized and centralized), regulation and economic rationale to enable business models that bring together these competing private and public interests.
But first, the question of how we got here requires a look at the long history of Web 3.
Web 3 means “not Web 2.0”
Web 3 is conceptually inseparable from the idea that society must escape from Web 2.0 and its problems of monopolization. For a long time, Web 3 simply meant “the model that comes after Web 2.0”.
Sir Tim Berners-Lee signaled this need for an upgrade in 2006, when – according to a recent article by renowned tech editor Tim O’Reilly – the inventor of the World Wide Web coined the term “Web 3.0” to describe his long-held vision of a new “Semantic web.” Berners-Lee saw the evolution of universal data formats and artificial intelligence removing the need for third-party intermediation to enable a true “machine-to-machine” communication network.
Whether Berners-Lee really invented “Web 3.0” is unclear. (A quote from a 2006 New York Times article link in O’Reilly’s column has the legendary computer scientist saying, “People keep asking what Web 3.0 is” – suggesting that others had uttered the term before him.) Less contested is the idea that ‘O’Reilly himself coined the term “Web 2.0”, having built a conference in 2004 around the idea before explaining it in an influential 2005 essay.
In 2004 it was well known that Google, Facebook and Amazon – the survivors of the late 90s dot com bubble – had consolidated massive market power around ever-growing communities of value. What O’Reilly did was name the new network effects-driven business model that enabled their dominance: an ever-expanding mass user base on a common platform whose growth has self-fulfillingly attracted more users to create a honeypot for advertisers. The emergence of these powerful intermediaries was a radical departure from the original idea of the decentralization of the Internet, in which publishers and users of information should have direct, permissionless access to each other.
It was not immediately obvious to most that this system was socially harmful, that the source of the platforms’ success – their ability to collect unprecedented massive amounts of user data and package it for advertisers and other buyers of that information – would Evolve in “Surveillance Capitalism”.
People did not foresee that we would become addicted to the unchallenged control these few platforms wield over information, much less how, by ceding access to our eyeballs and snapping our fingers, we would be monitored, locked into groups of echo chambers, and manipulated with targeted ads and misinformation without even realizing it.
That’s what I mean by a misaligned business model, a model that serves the production owners but not the customers they are meant to serve. It’s a very dysfunctional way for society to distribute information. This is the problem that a future web is waiting to solve.
‘Web 3.0’ becomes Web 3
By the time of Gavin Wood’s 2014 trial, the mess we were in was clearer. There was also a new way of looking at things.
Advocates of Blockchain technology now posed it, not only as a way to solve the problems of the centralized Internet, but also as a new way to frame them. By focusing on the blockchain-centric concept of “trust,” Wood, who co-founded Ethereum at the time, diverted our gaze from standard economic theory that the inefficiency of decentralization had opened the door to the centralization of monopolies and pushed him towards Web 2.0. The meta-problem of: that mistrust between decentralized communities leads people to entrust centralized entities with coordinating their exchanges of money and valuable information with each other. What has always been true for banks and money is now found in the realm of trading another precious asset: data.
The next step was to posit that blockchains like Ethereum, by supplanting trust in centralized entities like Google, offered the alternative of a verifiable and “truthful” way to track exchanges through open protocols and networks of decentralized validators. If we could achieve this, the argument goes, we could replace monopolistic platforms with decentralized data-sharing communities. Business models would emerge where apps served the money and information transactions of these communities but, in keeping with the idea of “sovereign identity,” control of this valuable personal data would rest solely with each individual user.
Wood was so focused on such ideas that after leaving Ethereum, he devoted his work at Parity Labs to this giant goal of fixing the internet. By founding the Web3 Foundation in 2017, he effectively renamed Web 3.0 to Web 3.
Four years later, with Web 3 almost a household word and widely associated with crypto products such as non-fungible tokens (NFTs), are we meeting those goals?
The jury is out. For a line of analysis, read Twitter reviews such as former Twitter CEO Jack Dorsey who argued that the Web 3 industry is more about VC profits than real functionality. On the other hand, see polite responses from people like Balaji Srinivasan, which touted the superiority of Ethereum’s trustless “smart contracts” over Twitter users’ need to trust the platform’s “social contracts.”
Or there is the blog post by Signal founder Moxie Marlinspike (real name: Matthew Rosenfeld), who argued that Web 3 is much harder to achieve than crypto cheerleaders think, because the cost and hassle of running your own web server naturally drives people to transfer control to more efficient centralized platforms. This sparked a nuanced answer by Mike Hearn, a former Bitcoin lead developer, who cited Bitcoin SPV (simplified payment verification) wallets as an example of lightweight user-controlled software that can process information while maintaining integrity and avoiding dependence on centralized servers.
All sides score valid points. One thing is certain: we still have a long way to go to escape the Matrix. Blockchain “trustless” exchange models could be part of the solution, as could the emergence of decentralized autonomous organizations (DAOs), where the power of collective action could overcome the advantages of the network effect. centralized platforms.
But much more is needed. As O’Reilly argued in his most recent article, if Web 3 is to move beyond its “idealism” and become “a general system of decentralized trust, it must develop robust interfaces with the real world, its legal systems and operating systems”. economy.”
Fortunately, people build such bridges. The demand will drive them. For one thing, the entry of lawyer-controlled mainstream media companies into the NFT and metaverse industry will require these standardization features to be built. Yet, according to O’Reilly, blockchain and crypto aren’t stand-alone solutions. Many other elements are required.
Let’s not forget the goal here: for the sake of humanity, we need a way out of the Web 2.0 quagmire. Keep striving, web builders 3.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.