how to navigate web3
Web3 is the third generation web revolution, reclaiming the internet from the powers of Big Tech and giving ownership of data back to the individual. Or so its proponents claim.
First, we had Web1. Buying a domain was cheap, and because you were buying space, you owned whatever you created on your domain. Then came Web2, characterised by the onset of social media. This time you didn’t own what you created. Big Tech did. They bought domains and encouraged you to post on their platforms. This was easier, a profile in three clicks, but in return they had a major share in what you created. And they learned to monetise the data you uploaded.
Web2’s winners and losers
Tech giants are now being accused of exploiting content creators for their own gain. For example, Spotify, a platform on which more than 8 million artists upload music, posted a 2.5bn euro profit in the third quarter of 2021 – but only 14,000 artists earn over $50,000/year.
The ‘dark side’ of data exploitation has also given rise to accusations of political interference in campaigns such as Brexit’s Vote Leave or the US presidential election that brought Trump to power. This has spurred on those looking to bring Web3 to the world. But will it really return power to the people? To answer that, we need to look at how it works.
From Big Tech control to decentralisation
The main principle behind Web3 is that it’s decentralised rather than being controlled by governments and corporations. Data is owned by the individuals who create it and only accessed by those who have permission.
This is thanks to blockchain technology. Blockchain is a distributed database shared among a computer network. It securely stores information in blocks, all of which are recorded on the computers of the users rather than in one single database (as per the current system). The secure nature of blockchain technology also means that interactions can take place without the need for a trusted third party.
Therefore, corporations no longer control your data and governments no longer regulate the transfer of data. And yes, you’re right, this does throw up issues around safety and legality. But leaving that aside for the moment, Web3’s big advantage is that it gives creators proof of ownership for their digital property.
The Matrix becomes reality
This ownership is key to the Web3 utopia, an egalitarian world in which creators are fairly recompensed for their content. We, the public, will not only host the internet, we will also be able to own and knowingly sell our data and creations, with smart tokens such as NFTs replacing currency.
This scenario leads us to the metaverse. In case you missed Mark Zuckerberg’s recent branding hype, the metaverse is an immersive online universe using Virtual Reality (VR) and Augmented Reality (AR) to draw us in. The Matrix becomes reality. You create a personal avatar and inhabit this universe with one secure digital identity, using blockchain technology – rather than having to sign in and out of different accounts as you do now. You can buy digital assets like clothes and accessories to personalise your avatar, as you can now in online games such as Roblox and Fortnite.
Even though Web3 wants nothing to do with Big Tech, we’re seeing Big Tech happily cherry-picking ideas from this revolutionary concept. So in reality, Web3 may not be the escape from a world ruled by tech giants that it’s billed as.
Will Web3 take off?
It’s debatable. Twitter’s former CEO, Jack Dorsey, has questioned web3’s ownership utopia. “You don’t own web3. The VCs and their LPs do. It will never escape their incentives. It’s ultimately a centralised entity with a different label.”
Certainly, singular websites such as OpenSea currently dominate the NFT and crypto marketplaces. This points towards that idea of Big Tech under a different label: new centralised bodies, all funded by the same venture capitalists.
Then there are the concerns about lack of third-party regulation and scrutiny. White supremacist networks, for example, are using decentralised platforms to circumvent Big Tech’s hate speech policies. This does not feel like the safe and secure internet the blockchain is meant to ensure.
And blockchain has issues. Technology journalist Alex Hern points out that blockchain technology is now as old as the iPhone, and that maybe if it had the potential to explode it would have done so by now. It’s complicated to set up, requires a lot of computing power and is hugely energy intensive. According to the Cambridge Center for Alternative Finance, bitcoin consumes roughly the same energy as Sweden.
Fad or Future?
Web3’s weakness is that many of its ideologically driven exponents are overly utopic about its potential. A more likely scenario is that aspects of Web3 thinking will inform current practices, such as through the Metaverse uptake of one secure internet identity. A Deloitte survey noted that 80% of customers expected digital assets to increase in importance over the next two years. Futurists and investors point to cryptocurrency and NFTs currently attracting huge amounts of investment and public attention.
Web3’s utopic vision will likely remain a vision. But hopefully the points it raises about data freedom and ownership will lead to a rethink of how we reward, recognise and protect digital creation in a world that’s increasingly reliant on it.
At a glance
Watch this space for more? Yes.
Potential business Impact? Medium – generating excitement but difficult to judge long-term uptake.
Status quo in 5 years? Unlikely. But expect components of Web3 to filter through.
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