What Is Web 3.0?
First of all, let’s do a quick run through of the history of the Internet, quickly defining what Web 1.0, Web 2.0, and Web 3.0 represent. If you are already familiar with these definitions, feel free to skip past these explanations. Then, I’ll move on to discuss Web 3.0 and some of the technical and cultural trends this new era will bring. I’ll also mention several Web 3.0 projects I find compelling.
Web 1.0
Web 1.0, which began in 1990 and ended around 2004, consisted mainly of web browsers and static webpages retrieved from servers. During this era, most people were only consumers of Internet content, not producers.
Web 2.0
Web 2.0, which began in 2004 and still dominates the Internet in its present form, was responsible for applying user profiles, personalized data, and peer-to-peer economics to many industries, changing the face of online shopping, photo and video sharing, financial technologies, and more.
Web 2.0 marks the age of targeted advertising, in which centralized companies collect data on user behavior and monetize through advertisements. Copious amounts of power are concentrated in a small number of companies sometimes referred to as “Big Tech”.
On Web 2.0 platforms, users generate most of the content, uploading their thoughts and images to forums, social networking sites, photo sharing sites, blogs, wikis, and more. Over the past 15 to 20 years, the bland webpages of Web 1.0 have been completely replaced by Web 2.0’s interactivity, social connectivity, and user-generated content.
Innovations in hardware, such as smartphones, as well as mobile Internet access, have driven the exponential growth of Web 2.0.
Web 3.0
Web 3.0, which I suppose began with the Bitcoin whitepaper in 2008, but which hasn’t reached mainstream popularity yet, may be responsible for applying decentralization, personal data ownership, and DAOs to the Internet at large.
In this next phase, things will be decentralized, open, and of greater utility. Defining features of Web 3.0 include decentralization, trustlessness and permissionlessness, artificial intelligence (AI) and machine learning, and connectivity and ubiquity.
The integration of AI in Web 3.0 will make the Internet more useful and personalized. For example, if you are making plans for a vacation and are on a budget, you currently would have to spend hours looking for flights, accommodation, and car rentals, trawling through numerous websites and comparing prices. With Web 3.0, intelligent search engines or bots will be able to collate all this information and generate tailored recommendations based on your profile and preferences, saving you hours of work.
Many Web 3.0 enthusiasts believe that in the future, you will not be the product online, but you will instead be the owner of all the data you provide. User ownership will be a tenet built into all projects; for example, a video-streaming company called Odysee, which is a blockchain alternative to YouTube, allows content creators to earn tokens when people watch videos that they’ve made.
In the Web 3.0 era, every company would be run by a decentralized group called a DAO (Decentralized Autonomous Organization). DAOs don’t have CEOs or Presidents, and without a centralized group making decisions, there would be no censorship of content, like there currently is on Facebook or Twitter.
Web 3.0 organizations tend toward a bottom-up design. Instead of code being written and controlled by a small group of experts, it was developed in full view of everyone, encouraging maximum participation and experimentation. As a result, Web 3.0 applications will run on blockchains or decentralized peer-to-peer networks, or a combination thereof — such decentralized apps are referred to as dApps.
The Web 3.0 Revolution
Even though the Bitcoin whitepaper was published over ten years ago in 2008, I still believe we are relatively early on in the Web 3.0 revolution. We’re in the middle of a moment that resembles the Dot.com era for Web 2.0, in which there were many, many Web 3.0 companies all vying to emerge as a leaders in the space.
There are still so many usability issues that are preventing widespread, mainstream adoption of Web 3.0 technologies. For example, I posted an NFT on Rarible (see my art here), and I paid an Ethereum gas fee of around $40 in order to make the post. I can’t imagine what would happen to Instagram’s user engagement if Meta charged each user $40 every time they posted a new photo. There are still points of dramatic friction in usability considerations when it comes to Web 3.0 technologies.
I am looking forward to watching Ethereum’s transition from a Proof of Work to a Proof of Stake algorithm, which may lower gas fees on the network. The companies that engineer usable solutions will win longterm.
Projects To Watch
One blockchain project that I am personally excited about is Stellar. This project is a blockchain company that has built an open network for storing and moving money. What is most exciting about Stellar is that the algorithm used in mining new blocks is extremely environmentally friendly. Rather than have every node on the network compete independently in order to mine the next block, nodes on the Stellar network work cooperatively, which dramatically reduces the energy required to uphold the network.
This project is maybe a bit obvious, but I’m looking forward to seeing what Meta (formerly Facebook) brings to the table with the Metaverse. Meta has not successfully launched a new user-facing project since the launch of Facebook in 2004 (Instagram, WhatsApp, and Oculus were all acquisitions). A part of me does think it would be really funny if the Metaverse fell completely flat — or ultimately lost in the race to capture social media in VR to a smaller company, such as Decentraland.
Big Ideas
The concepts of yield farming and staking are new to finance and represent safe, risk averse ways to profit in the cryptocurrency space, without simply buying and holding a project’s tokens. I haven’t actually tried either yield farming or staking yet, but I’ve been meaning to experiment with these options in order to profit during the bear market.
I follow Erik Torenberg on Twitter, and he has some interesting ideas about the repercussions of financial systems not being tied to any government. I heard him say once on Clubhouse that the decentralization of finance would eventually lead to companies or Internet applications where new governments could be formed by groups of users.
An interesting problem that decentralization is posing today is that a decentralized web makes regulation and enforcement very difficult; for example, which country’s laws would apply to a specific website whose content is hosted in numerous nations globally?
Where To Learn More
I recently started listening to TechCrunch’s new blockchain-inspired podcast, Chain Reaction. So far, my favorite episodes are the ones with Justin Blau, where he talks about his music NFT startup, Royal, and Kevin Rose, a partner at True Ventures, who talks generally about the Web 3.0 space.
If you want to dive into the code behind blockchains and NFTs, I would recommend this the YouTube channel Dapp University, where the tutorials are relatively easy to follow. You’ll truly get a sense for the technology behind these fledgling Web 3.0 companies if you follow along on this channel.
Summary
We’re living in an exciting time for the Internet.
Web 1.0 represented mostly browsers serving up static webpages, while Web 2.0 offers systems for connected exchange of photos and videos, as well as access to a peer-to-peer economy. Web 3.0 is testing out the value proposition of decentralization and is beginning to touch more industries than just finance, where blockchain technologies first gained traction.
Web 3.0 companies are proliferating all around us. It will be exciting to see which companies succeed and become truly integrated into the everyday lives of users.
