Web3 entrepreneur, investor, CBDC inventor, and founder of Panther, Bitt, BaseTwo, Fluent and Elemental. Collaborated with UN, MIT and IMF.
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No one needs to stress the significance of the change from an industrial to an information model in our society. We spend, on average, over half of our waking hours using digital media and apps. We do business over email and Slack, Discord, Telegram and Whatsapp. We elect our officials (arguably) on Facebook and Twitter. We text more than we talk, touch less physical money than ever and sometimes even exercise along with screens. The information superhighway is ubiquitous in all areas of life, to the point that some young adults today can’t even remember how life was without it.
The social and technological revolution that allowed us to project our identities into the internet is now widely known as Web 2.0. But starting in the latter half of the last decade, a new paradigm started to take hold on the World Wide Web. Decentralized alternatives to Web 2.0 systems are being built to replace most, if not all, of the material available on the web.
What’s wrong with Web 2.0?
It’s well known that there are only a handful of people in charge of the platforms we spend most of our time on. Even websites like Wikipedia or the Internet Archive, although they are nonprofit organizations, are ultimately controlled by a few board members, who can potentially abuse their power for personal gain or censorship. Moreover, the overwhelming majority of websites rely on web infrastructure provided and controlled by the so-called Trinity: Amazon AWS, Microsoft Azure and Google Cloud together represent 61% of the web infrastructure market. That’s more or less 61% of all human data.
Why Web3 Is The Solution
Web3 wants to do away with centralization altogether by being trustless, permissionless and distributed. Solutions range from infrastructure to services and platforms as ways to make centralized alternatives wholly unnecessary. In other words, it turns web services into public goods much like roads and sewage.
In the Web3 paradigm, user data is held and controlled by users only, guaranteeing their independence and allowing them to make their own decisions over it at all times. The platforms are also community-owned and controlled, primarily using open-source code to ensure transparency and fairness.
Web3 is interoperable and composable from the get-go. Each protocol can use the other as a component, freely. No patents, no lawsuits. In contrast with Web 2.0, Web3 is censorship-resistant: No single actor can decide to cut a person or group of people out of a platform or erase their speech from the record.
It would take lots of time and space to show exactly how this all works, and it’s still in the super early stages. But it’s definitely happening, and it’s the next logical step in our digital evolution.
Privacy is the end-all-be-all, so we might as well acknowledge it.
It’s challenging to paint a picture of why we need Web3 without fully diving into the worst-case scenarios of Web 2.0. But with those in mind, and with an understanding of the importance of self-ownership and management of data (what we might call “privacy”), we can explore more of the innovations of Web3.
It all started with Bitcoin. One of the most powerful social experiments ever, Bitcoin was born to allow fully decentralized peer-to-peer interactions. For the first time, it allowed a shared ledger to be nearly 100% secure and tamperproof while being usable by anyone, without any requirements. After this, the blockchain world created nearly infinitely flexible and extensible virtual supercomputers, such as Ethereum, to reinvent the web entirely.
The Web3 stack, composable and therefore progressively powerful, is on the verge of reinventing the internet as we know it. And we’re just getting started—Web3 is at the same stage of development as Web 2.0 was in the late 1990s. Some of the innovations you will likely see happen in Web3 over the next few years are.
• Fully decentralized private digital identities (which I’ll cover with a dedicated article in the future).
• User-owned and -managed social media platforms.
• Completely private transfers of virtual assets, made 100% compliant.
• Independent, immersive and interconnected NFT-based virtual economies, known as metaverses.
Preparing For The Shift To Web3
Web3 has the potential to unleash a completely unique and particularly effective form of network effect. However, if you want to get into it without going full crypto/DeFi/metaverse/etc., there are several practices that can help you make the jump.
1. Integrate digital assets.
Whether they’re fungible or nonfungible, digital asset ownership encourages a psychological sense of ownership that creates incredible attachment. In fact, minting and creating tokens or NFTs is not necessarily an expensive process. As powerful communities tend to congregate around these digital goods, they represent a great gateway to Web3.
2. Use existing Web3 infrastructure.
Web3 has already and will continue to open up new possibilities for operations, consumer relationships and business models. However, before you make the jump, you can still leverage network effects by using platforms and services created by others for your own purposes. The choice is yours: Web3 offers decentralized domain names, arbitration systems, social media, job boards and much more.
3. Embrace decentralization and its practices.
One of the most crucial actions you can make to prepare for a Web3 future is to present your team with convincing arguments for why decentralization makes sense. In fact, doing so is key for you to decentralize: Your team will be better at identifying and more willing to develop repositories for personally identifiable data if they are familiar with these principles. You can do this by contributing to open source repositories, open-sourcing some of your processes, setting up direct democracy processes and more.
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