If you peruse Twitter and Discord communities long enough, inevitably you’ll hear something about Web3, the decentralized internet.
Maybe, to you, the internet is the internet—Web3 doesn’t mean anything more than Web1 or Web2. But this impending shift that everyone is beginning to talk about is promising to be a major change in how the internet is structured and, as a result, in your user experience.
So, let’s talk about Web3.
Evolution of the internet
Remember dialup and not being able to use the phone and internet at the same time? The early internet seems so far away in some ways, but in the grand scheme of time, it’s very new. Technology advances so quickly that it’s easy to forget what came before. But the internet is only a few decades old and, as you know, it’s changed quite a bit since those dialup days.
The internet has evolved in phases roughly every ten years. For the first decade, we enjoyed Web1. This was the read-only internet, meaning that information flowed one way, from the developers who created websites, to the users who consumed it. It was static and there was not much interactivity to speak of. It was also harder to find things on the internet back then because the algorithms that search the web for keywords also hadn’t come to be.
In the mid 2000s, the internet moved into Web2. This is the internet we largely use today. It brought the ability to interact with websites and applications in a read-write exchange. Responsive platforms that allowed user-generated content like social networks and product reviews became a big part of online activity. Web2 also saw the mainstreaming of cloud services where large server farms were used to host all the information that moves back and forth from the user to the database. The way the current internet is monetized is mostly through advertising and selling user data, which is gathered when people provide it to get permissions and through activity tracking.
The Problem with Web2
Today, Web3 is on the cusp of changing the internet again. But, what’s the problem with Web2? It brought a lot of innovation and improved user experience—we use it every day and we don’t think twice about it. What kind of innovations does Web3 aim to make?
Maybe you’ve heard a few small complaints about the current internet. These complaints are about user privacy, censorship, and people and businesses being blocked and having their livelihoods cut off. These are just a few of the problems that crop up with the way Web2 is structured. The goal of Web3 is to solve those problems through decentralization.
The decentralized web, as Web3 is called, will allow people to escape the chokehold that monopolizing companies currently have on the internet. Maybe you’ve never thought about how much control you really relinquish when you use the internet. Control over your personal information, your financial transactions, and sometimes even your ability to move through the world. That’s because every corner of Web2 is controlled by a central power. An Altcoin Analysis video explains Web3 by imagining a scenario: you want to create a new app. You cannot do it on Web2 without placing all of your trust in some major centralized companies that have the ability to cut off your access at any moment.
Internet gatekeepers
In an app development thought experiment, you’ve just developed a really cool new web app using open source programming languages. In order to make it functional and usable online, you’ll first need to get past a multitude of gatekeepers. You’ll likely need a website and a domain. But guess what? When you buy a Web2 domain, you have to register it with one of the many private domain registrars which, if they wanted to, could remove your access to the domain. You’ll also need to host your website on a server. But, surprise, your web host could also remove access to your website if you do something they don’t like.
Next, you’ll probably want to integrate your app so that it can interact smoothly with the rest of the internet. For this, you’ll need to use some developer tools. You’ve probably already guessed—these developer tools are owned by corporations like Google, Apple, Microsoft, Amazon, and Oracle, which must give you permission to use them and which, often, you must pay. In order to get your app seen, you’ll need to use Google for SEO. If you want your app to integrate with Facebook, you’ll need a Facebook API, which, again, requires permission. If you want people to download your app, you’ll want it in the Google and Apple stores—you’ll need permission. If you want people to be able to use payments on your app, you’ll need a payment processing service, and you won’t be shocked to find out that these also require permission.
If, at any point in the implementation of your new app, one of these centralized companies decides you cannot use their service, you’re out of luck. You know the Terms of Service agreements that everyone clicks “agree” to without reading? Those define the parameters you’re subject to and they can be changed at the discretion of the private company. As you can see, there are many permission links in the chain of releasing an app online. In the end, you have very little control over whether your app is functional, findable, integrated, and usable. This applies to you as a user as well, even if you’re not trying to develop and release your own app. In order to use the many apps that you likely do (which are developed as described), you still need permissions.
This is the problem that Web3 seeks to resolve. The decentralized web can remove power from the gatekeepers and distribute it so that no one entity can block users or monetize their data. It can also reopen the flow of information and break the echo chambers that are created by advertising and algorithms that put users into a feedback loop of seeing only the information that will perpetuate time and money spent benefiting the gatekeepers.
How will Web3 decentralize the web?
Cryptocurrency is tied closely to Web3 because the decentralized web is built on the same blockchain technology that cryptocurrencies are built on. From the databases that hold all the information on the web, to APIs, to the very frontend platforms that you interact with, decentralized autonomous organizations (DAOs), blockchains, and smart contracts are vital to building out a new, decentralized internet.
If Web1 was read-only and Web2 is read-write, Web3 is read-write-execute. The execution part is what removes the need for a trusted third party and allows users to interact directly through automatically executed smart contracts. The decentralized web is trustless and permissionless, using edge computing, blockchain, native payments, and smart contracts to remove intermediaries. It cannot be shut down or censored by private companies or governments because no single entity has the power to control the decentralized web.
DAOs are a trustless way for new Web3 tools and decentralized apps (dApps) to be developed. Instead of creating and funding a startup company that employs developers who are beholden to the financial interests supporting them, DAOs are governed by the community through voting systems. Reward incentives encourage developers to build open source dApps, which everyone has access to without permission.
Blockchains distribute the database and enable the creation of decentralized servers. Anyone can participate as a node and help maintain the server. The more people participate, the more difficult it is for the database to be hacked or censored and the server cannot go offline the way centralized servers can. Blockchains also make it possible for native payments to be made with cryptocurrency, which eliminates the need for trusted payment processors who can block or reverse transactions.
Smart contracts can automatically execute transactions and data transfers without needing a custodian in the middle. This allows people to maintain control over when and how much of their information is shared. Your data cannot be monetized if you have control over it in a trustless, decentralized internet. The decentralized finance (DeFi) ecosystem is invested in building out dApps and services using smart contracts, and that space is growing by leaps and bounds.
Hurdles for the decentralized web
While the decentralized web is on its way and expanding every day, that doesn’t mean there aren’t difficulties to overcome. The entire infrastructure of the internet will need to be rebuilt in a decentralized manner, and that takes time. Not only that, users will need to adapt to a new way of using the decentralized web. Personal information is protected by using a wallet address to access dApps and Web3 tools. This adoption will also take time. Not to mention, corporations and centralized powers are not exactly eager and involved in promoting a transition to Web3 since it threatens control they currently have over the internet, information, business, and finance.
The truth is that currently, the centralized web is faster, more streamlined, and issues are resolved quickly by a central authority who can step in. On the decentralized web, there are scalability hurdles, user experience is not as smooth in current implementations compared to Web2, there are significant time and resource costs to placing everything on the blockchain, and consensus resolution can slow changes and updates down significantly. But these hurdles are by no means insurmountable. Every iteration of the internet has posed its problems but innovation surges forward. The deeper the information economy is entrenched in the current, centralized structure, the more important it becomes to achieve a new, decentralized internet.
What's next for Web3?
We’re still in the early stages of developing Web3. But rebuilding the architecture of the internet in a decentralized way is vital to keeping information secure, allowing everyone access without the threat of censorship, and ultimately, removing the friction of trusted third parties.
Picture an internet where Patreon cannot block creators from generating income, where Twitter cannot boot “subversive” voices who then effectively lose their freedom of speech. Picture an internet where Cuba or China cannot block their populations from accessing websites and applications. Where payments can be made without trusting your money to a custodian like PayPal or Stripe. That’s the paradigm shift that a decentralized web can bring to reality—it’s only a matter of time.
About the Author
Michael Hearne
About Decentral Publishing
Decentral Publishing is dedicated to producing content through our blog, eBooks, and docu-series to help our readers deepen their knowledge of cryptocurrency and related topics. Do you have a fresh perspective or any other topics worth discussing? Keep the conversation going with us online at: Facebook, Twitter, Instagram, and LinkedIn.
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About the Author
Michael Hearne
About Decentral Publishing
Decentral Publishing is dedicated to producing content through our blog, eBooks, and docu-series to help our readers deepen their knowledge of cryptocurrency and related topics. Do you have a fresh perspective or any other topics worth discussing? Keep the conversation going with us online at: Facebook, Twitter, Instagram, and LinkedIn.
