Surely at all Christmas dinners this year there will be someone who mentions it. If you are already up to date with the concept of the metaverse and the blockchain, now it’s time to learn about web3 . The word has gained traction in 2020 and continues to be dropped in articles that talk about NFTs, cryptocurrencies, or decentralized finance. But it is much more than that.
Web3 refers to the evolution of the internet that we know, and its main characteristic is that it will be a decentralized internet and for that it will use blockchain technology.
history of the website
If the early web, called 1.0, revolved around hyperlinks, and web 2.0 revolves around social networks; Web 3.0 is based on tokens, the digital units of exchange for blockchain technologies.
This new web model has many services based on the token economy, so that the ownership and control of these services would be distributed among the owners of the tokens, who are also users. The tokens, as we know, have exchange value, so this means that users can collect their money whenever they want.
The history of the internet is usually divided into these three stages, which now help us understand where the internet is going. Web 1.0, which runs from 1991 to 2004, is read-only: most of the participants were content consumers. The protocols were open, decentralized and under the governance of the community.
The explosion of web 2.0 brings social networks and interactivity with the user, which creates much of its content. It is the era of companies like Facebook, Google, Apple, Amazon, creating silo, centralized services dependent on these corporations.
Here the paradox arises that users create but it is the technology companies that monetize. Chris Dixon, ex-Ebay, entrepreneur and venture investor, has explained that the life cycle of these companies begins with a stage in which they do whatever it takes to attract users and external collaborators (such as complementary apps), using the network effect.
When the adoption of use of these platforms reaches a limit, the relationship with the participants goes from a positive sum to a zero sum. In order to continue growing, they need to extract data from users and start competing with the external ones that until then collaborated with them.
After this ill-fated web 2.0, where the technology companies let us play until the moment they needed to charge us in private data for the services provided, here comes Web 3.0 or what web3 is: the promise of a website where the user is once again in the center as a creator, but above all as a holder, as the owner of those tokens. It is a website, which according to Samuel Gil , investor and partner at JME Ventures, “has the best of the previous two. Users create, developers create and they are the ones who monetize”.
Web3 and the best of both worlds
Gil, with his venture capital fund, invests in projects related to decentralized finance, which are part of web3, such as Atani and RAND, two platforms with cryptocurrency investment services, and writes a weekly newsletter where he talks, among other topics, about finance. decentralized.
In an interview with Jotdown, he explained that it is one of the areas that interests him the most because the crypto world and blockchain allow collaboration. “If you think a little bit about the arrow of history, so that we could collaborate among more people, it has almost always caused more centralization. A tribe, a small state, the European Union. It almost always seems that collaboration between larger groups requires the centralization of power, and this is just the opposite. It is a mechanism so that people who do not know each other at all and who do not initially trust each other can collaborate. That changes money, the financial system, digital and non-digital art, it changes everything. The transformative potential that I see in this technology is brutal, despite the fact that it is obviously in an initial state.”
If the enthusiasm of its worshipers reminds us of the optimism in the early days of the web, of that web 1.0, it is because perhaps both have much more to do with each other than it seems at first glance.
Gil considers that the ethos of web 1 and 3 are quite similar. “What happens is that in the middle we have learned to do many other things”. He defines web3 as open, where “the value goes much more to the creators and users and not so much to the companies”. He acknowledges that in web 2.0 there are users who invest time and effort in growing their follower base on platforms such as Twitter or Instagram, where they extract some economic value, «but it is a value with much more friction, and if tomorrow a new network emerges there is no social portability”, he points out.
Fernando Tricas is a professor of computer science at the University of Zaragoza, and defines himself as an «agnostic» on the subject, especially because he thinks that web3 seems more theoretical than reality for now. He says that web 1.0 was already decentralized in origin, and if it is talked about now it may be another attempt to add value to the blockchain and its mantra of decentralization.
Web3 or Web 3.0? the missing point
If it is an evolution of web 2.0, why has the point been removed now? Some, like the science fiction writer, Robin Sloan, have wondered if the name may come from web3.js , a collection of modules to interact with Ethereum nodes through different protocols (Ethereum is a blockchain that was born with the aim of improving the capabilities of Bitcoin to include programming capabilities that could lead to the creation of smart contracts). Tricas explains that web3.js would allow interaction with an ethereum blockchain and this would link web3 with Ethereum in a certain way. Sloan speculated that it makes sense to read into web3 the concept of «an Ethereum-based internet.»
The truth is that the first person to talk about Web 3.0 was Tim Berners Lee in 2001 [PDF]. He called it the Semantic Web and it was aimed at adding information to the web so that not only people could read its content but also machines. There were mechanisms such as metadata languages and information structuring to make it easier. All of this was largely surpassed by advances in artificial intelligence, which, thanks to the effectiveness of natural language processing and learning algorithms, have led us to a web where machines actually ‘understand’.
The question about the missing point aims to understand if it is a new concept or an old one. “Those who have given this name to web3 have decided to ignore this part of the history of the web or, in the manner of computing, make a new branch ( fork in English) differentiating itself from the previous web 3.0. They probably also want to separate themselves from the machines that understand the content because that opens the door to the surveillance and espionage of the networks that they call centralized”, says Tricas.
Is only the crypto world talking about web3? I ask Gil, who says he thinks web 2.0 people are too. «I’m not sure if web3 is a subset of crypto or a rebranding of the crypto world,» he muses.
web3: transparent, private, capitalist or democratic
All web3 enthusiasts point to the promise: it will be a more democratic, more open web, where the decentralization of services means that anyone can be the owner . And more transparent, because the blockchain data is completely open and public, so that the participants can see what is happening.
Identity and privacy on this website will be different too. The identity will be linked to the wallet or digital wallet of the user who participates in it. While in web 2.0 authentication methods such as OAuth or email plus password almost always require the user to provide private and personal data, in web3 digital wallets are completely anonymous unless the user decides to link them publicly to their identity.
But at the same time, web3 is a model where you must own, you must own tokens or digital assets to participate. Gil disagrees with that. «Many times, being a user of certain services already rewards you, because one way to have without investing is to be a user.» Gil is referring to the fact that early adopters of certain products can get what they call “airdrops”, a metaphor for a helicopter that drops money in a certain place, and which refers to incentives that some platforms give to these early adopters.
“What is the brutal paradigm shift is the change from renting to owning. You enter Twitter, you invest a lot of hours to have your audience, and you are trusting the good faith of the service. On the other hand, in web3 you own the assets and you could take your audience to another place if you wanted. It’s that mindset shift,” she says.
Decentralization of web3, to what extent?
The key feature of web3 is decentralization, but what does this mean? Should every Internet user have a server? Not quite. In decentralized networks based on blockchain, the idea of a server does not exist: each node has the capacity to store and publish content. «It would be similar to P2P networks where we make certain information available to the network, which is recorded in a blockchain, which is what acts as a guide for others when someone wants to find an object,» explains Tricas.
Web3 therefore has a model with, according to Tricas, “interesting” features of provider independence, since the blockchain cannot censor you, by design . Gil exemplifies this with Ethereum, which he describes as “a large decentralized computer, in which people contribute the necessary resources to create that computer and receive Ethereum. Ethereum would be the centralized world’s equivalent of Amazon Web Services, if you will.»
Although all this runs on the physical infrastructure of the internet, communication networks and data centers, the decentralized structure of these blockchain nodes does allow the network to have fewer vulnerabilities. The recent worldwide crash of Facebook showed the problem of the centralization of services.
«The problem we have today is that the majority of Internet traffic enters through very few places: the Facebook family of services, or the Google family,» says Gil. Decentralization has its advantages and disadvantages: more decentralization means less chance of crashes, but lower processing speed.
“Ethereum is a world computer where each node is executing the same code, which makes it extremely slow and inefficient, but at the same time it has the advantage that there is no single point of failure. While with the current architecture there are, despite the fact that there are backups or resilience infrastructure. The more decentralized you are, the less vulnerable you are and, in turn, the more difficult it is for you to have a very high performance because you have the problem of coordinating that tangle of decentralized agents”, explains Gil.
Freedom and access on the web3
Could web3 solve problems like internet censorship, when a government decides to cut off access to its territory? The main strength of decentralized networks is this, that it is practically impossible for all the nodes of a network to be down, answers Tricas. “But, in the end, the content will be somewhere and its availability will depend on it. It is conceivable that replication models, or more content in the blockchain itself, could appear to remedy these problems. There are two aspects to cutting access: if they cut off our access to the network, it’s like if they cut off our electricity, there’s little we can do. But the censorship or prohibition of certain content becomes much more difficult, due to the characteristics of the blockchain (replicated in a lot of nodes and, therefore, very difficult to block; also, consolidated with its cryptographic mechanisms, which make it very difficult to modify its content)”.
What will happen to web3 with the lack of quality access for a large part of the planet’s population? Tricas has doubts, because everything that has to do with the blockchain is more expensive (in necessary resources) due to the related cryptographic operations. “If we add that layer of complexity we make censorship more difficult (and that benefits people who live in countries with censorship) but we lose speed and lightness (there is nothing lighter and more accessible than an old web page in html from the web 1.0),» he explains.
Gil believes that in the cycle of hype (enthusiasm) of this topic, as often happens with technological innovations, we are «at the beginning of the beginning of the beginning.» «We may be in a bubble and yet in the long run we’re bullish on technology,» he says. He compares web3 to an MVP, as they say in startup jargon, a Minimum Viable Product, which still has many shortcomings. “But the thing is that some technologies advance at an exponential rate, and people are extremely bad at anticipating exponential change. We are not able to see what this will be like in 10 years.”