The Internet is an evolving entity, reinventing itself at such a rapid pace that it’s hard to stop long enough to describe it. Web3 is the next iteration which is still in the early stages of development.
As with Web1 and Web2, idealistic hopes and plans abound. Will the biggest tech companies with the most resources dominate the space or will disruptive technologies and new pioneers emerge, fostering a more egalitarian internet?
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Web3 promises a decentralized future of the Internet built on blockchain and Internet of Things technology. But what would it look like and is it possible?
Predicting how the next chapter of the internet will unfold means re-exploring the web that came before it.
Web1 started out as a decentralized network connecting individual computers and servers. In the 1970s, the US government developed ARPANET as a communication system linking military command centers. Academic and research institutions soon joined the network, and the Internet was born as an open-source environment, which meant anyone could freely use it.
In the 1990s, websites still had one main function: to display information. The first browsers were introduced but at the time advertising was banned, which seems hard to believe today.
Web2 is the Internet as we know it now. It is a more interactive environment with social media and creator platforms allowing users to post and interact with content.
Web2 ushered in the era of Internet marketing and sales with improved mobile devices and broadband networks.
In 1996, Steve Jobs made a visionary prediction in a Wired magazine interview, “The best way to conceive of the Web is to think of it as a direct distribution channel to customers, whether it is information or commerce. It bypasses all intermediaries.
Amazon’s success (AMZN) – Get the report from Amazon.com Inc.eBay (EBAY) – Get the report from eBay Inc., and an increasingly digital shopping experience proved Jobs right. In 2012, e-commerce sales reached $1 trillion worldwide.
With an advertising spine, Meta (META) – Get the report from Meta Platforms Inc.Alphabet (GOOG) – Get the Alphabet Inc. report.and many others have profited immensely from the dominance of social media, search platforms and video streaming services.
However, big tech has come under fire for violating user privacy and that criticism comes at a price. EU data protection authorities have issued a total of $1.25 billion fined since January 2021.
Regulators and users continue to question how companies collect and share personal data.
Some of the Internet’s founding fathers, including World Wide Web inventor Tim Berners-Lee, even wondered if the Web as it exists today could be the free and open forum promised. On a BBC broadcast in November 2019 he said:
“If you had asked me 30 years ago where we would be, I was somehow hoping that we would be using web tools effectively to promote democracy. But we are seeing now with the exploitation that we have seen with Cambridge Analytica as well as misinformation, lack of accountability, blocking and censorship by governments, that is not what we are seeing.”
So, is Web3 the solution?
Web3 aims to decentralize the Internet and launch a more multidimensional and immersive environment called the “metaverse” designed for even more user participation.
Blockchain technology is expected to change the way information is shared and stored, providing verifiable, trustless and distributed data across peer-to-peer nodes or servers that can enable the creation of new economic sectors. and new forms of commerce.
Theoretically, decentralized apps can shift much of the power and control to the public, marking the shift to a more user-owned web.
Peer-to-peer buying and selling of assets, like NFTs, is just the start. The growing adoption of cryptocurrencies and ever-expanding mobile e-commerce has effectively eliminated middlemen from some parts of the economy.
Consider the transaction fees charged to retailers by credit card companies. The seemingly small 1-4% adds up as it moves along the supply chain. The inefficiency of small transactions forces many companies to buy in bulk and effectively excludes small businesses.
Proponents of “Defi” or decentralized finance are pushing and advocating for more personalized financial models and even a future without centralized banks or exchanges.
Pioneers in the space include OpenSea, the premier digital marketplace for crypto collectibles and NFTs, Coinbase for buying, selling, and storing cryptocurrency, and Decentraland, a metaverse environment where users can meet, chat, play games, socialize and attend events.
However, critics have already begun to question some of Web3’s loftier ambitions and warn of potential manipulation.
If Web2 is an example, idealistic projections can be tempered by market forces, industry leaders, and even politics. Can the dream of Web3 come true or does the past already have the answer?