Recently, a Twitter thread entitled Why web3 matters went viral. And as much as I love this sentiment, I couldn't help but roll my eyes when reading through Chris Dixon's buzzword-filled tweets. That kind of blockchain lingo is loved by crypto salespeople and NFT grifters, but is quite far removed from people who, well... actually want to understand why web3 matters. It doesn't help that Twitter is a cesspool for controversies, and Chris's thread seemed to divide people into two groups - you either agree with everything he said 100% making you a delusional zoomer, or you're an old-fashioned granddad who can't keep up with the times. I'm here to help you make up your own mind, and hopefully find yourself somewhere in between these two extremes.
If you're someone who loves to read irrationally enthusiastic reassurances about the next blockchain get-rich-quick scheme, this post is not for you. But if you're fed up of the constant bombardment of jargon and actually want to understand why on earth Twitter is suddenly talking about a new web, read on. I'm going to tell you why web3 actually matters and what it means for you - a person, not a venture capitalist. 😉
What's wrong with our current web?
We've had two iterations of the web so far - known as, you guessed it, web1 and web2. Web1 was king from approximately 1990-2005, and most people using the web in those days were consumers rather than creators. Content was consumed by many but created by few, mainly obnoxiously nerdy tech people and forward-thinking news sites. It is now nicknamed the 'read-only web.'
Web2 changed that, particularly with the introduction of social media. Suddenly, more and more people were posting, creating, and sharing their lives with the world. Those who were originally only reading news stories started publicly arguing with them. And the internet that we know today was born.
But there's a problem. Everything that we post, share, comment, like, or furiously screenshot is owned by someone else. And it goes deeper - it's owned by 4 big companies: Google, Apple, Facebook, and Amazon. We'll call them GAFA.
The web has gone from being created by few and consumed by many, to being created by many and consumed by many, to being created by many and owned by few. GAFA have created a Data Economy, feeding off of the content that we create and using it against us. They control the information we create, the information we see, and with that they're able to gently exploit our human weaknesses by manipulating what we believe, which in turn makes ads more effective - the Data Economy business model.
The company with the most data always wins. Facebook buys out any and all threats to their social media monopoly - remember when WhatsApp was privacy-focussed? Or when Instagram was actually a non-toxic platform for friends to share photos? Google has made Bing a meme, Yahoo a boomers-only search engine, and reduced Mozilla to desperately holding onto the ethical part of the browser market. And Amazon has basically disrupted every market in existence and changed the course of the economy. But like, in a bad way.
The Data Economy isn't just an exploitive and rigged business model, but it also has devastating consequences when things go wrong. When so much data is owned by one entity, it makes them a prime target for hacking. And oh boy, do these guys get hacked. For a glimpse into how insecure the Data Economy is, have a look at Wikipedia's list of data breaches. And to find out if your data has been exposed to the public, enter your email into Have I Been Pwned. Not only are there accidental data breaches, but there have been cases of purposeful illegal selling of data from GAFA. There is no sign of this stopping, and no incentive to stop either. That's where web3 comes in.
The web3 ideal
Web3 promises two things:
- To remove the ability to make money from collecting data
- To create incentives to make money on the internet through other means
By achieving both these goals, we will no longer live in a Data Economy. Companies will have to find new ways to make money, and people will be able to take control of their own data. There will be no incentive to hack into data centres. We'll live in a world where the people consume, create, and own our information, not in a world of surveillance capitalism that feeds 4 power-hungry data-hoarding entities.
Sound unrealistic? Up until now, it has been. We've been relying on governments and companies to do the right thing, and we've seen how that's panned out. But if we can't trust people to enforce these promises, we can trust technology. So let's go through how web3 can technologically fulfill each of its promises.
Remove the ability to make money from collecting data
Web3 has often been called the decentralized web. While data is currently centralized and owned by GAFA, web3 applications separate their data and store it on a large number of computers and hard drives. These computers are not owned by one company - the idea is that each person can own a small amount of data. Without one entity having access to data, there is no ability to make money from it.
There are plenty of ways to accomplish this technologically. The most well-known solution to this currently is (brace yourself) blockchain. Without going into boring details of how a blockchain works, it allows computers on a network to share data between them rather than relying on one centralized storage space.
Bitcoin and Ethereum are the two biggest blockchains in existence, but others like Solana and Cardano are slowly catching up. There are hundreds of decentralized apps, aka dapps, already deployed on Ethereum, and building on the blockchain is getting easier by the minute. It is by far the most secure decentralized architecture.
There are other ways to build a decentralized network. The obsession over and reliance on blockchain is, quite frankly, BS. There are decentralized storage companies out there (like Storj) that pay any person to host some of their storage space to be a 'node' on their network, while allowing developers to store their data on these nodes.
Web3 is not blockchain - this is an incredibly important point to understand. Blockchain is a web3 architecture, but it is not the only way to accomplish a decentralized web, and in most cases it is unnecessarily expensive. However, with blockchain comes cryptocurrency, which brings us to our next point.
Create incentives to make money on the internet through other means
Without one entity having access to large amounts of data, we can't have a Data Economy. And removing the Data Economy already opens up new incentives to make money through other means. But when people talk about making money using web3, they're talking about crypto.
Just a warning: some of this next part may sound similar to Chris's thread, but I promise it will actually be coherent.
Crypto provides a financial incentive, known as tokens, to participate in the building of a decentralized web. There are many ways to earn tokens - some examples are offering storage (like Storj), creating content, or sometimes even being early adapters of the application. Companies can set up their own protocol for rewarding their users, and it cuts out the need for other third party services. There is no need to send data through AWS, Stripe, or PayPal, as tokens can be sent directly from the provider to the user.
Tokens can also be sent directly from one user to another. No more relying on Google to give you your YouTube earnings, or directing your audience to Patreon so they can donate - users can directly 'tip' you a token if they like your content. There are also the famous NFTs, which, sorry Chris, do not let you "own a piece of the internet". NFTs are tokens too, but they are not equal in value to each other. While owning an OG token is like owning a dollar, owning an NFT is more like owning a painting. All dollars are equal in value, but not all paintings are equal in value. NFTs are each unique, and they're pretty cool - check out OpenSea if you're interested in getting into it.
This token economy is exactly what the web was created for in the first place. It's direct. People reward people for providing a service or participating in a better world. There is no malicious data tracking or manipulation. No exploitation, no incessant ads, no algorithms designed to be addictive. No reliance on huge profit-driven companies. Just people interacting with people. That's web3.
So where are we?
Most apps you use are still web2. The majority of dapps out there are purely for finance, like trading crypto or buying and selling NFTs. But we're getting there, and web3 is already beginning to expand into huge industries, like music, video streaming, and even gaming.
Web3 may currently seem pretty inaccessible, and when buzzword tweets go viral it continues to push the narrative that the decentralized web is only for people already in the know. But web2 was like that too. There are thousands of people passionately working to make this space more accessible for all, and you'll soon be using web3 apps without even knowing.
It's super easy to start your own journey into web3, and you can get involved today by installing Metamask, a browser extension to make your browser compatible with blockchain apps. If you're a developer interested in getting into the web3 space, I cannot recommend Nader Dabit's content enough.
Thanks for reading. This is my first blog post on Hashnode, and my first post ever about web3. I'll be posting more about the decentralized web so if you're interested in reading my (potentially controversial) takes, make sure to follow me here or slide into my Twitter DMs!