Web 3.0 will be born out of a natural evolution of older-generation web tools combined with cutting-edge technologies like AI and blockchain, as well as the interconnection between users and increasing internet usage. Internet 3.0 is an upgrade to its precursors: web 1.0 and 2.0.
The Evolution of the Web:
The web has evolved a lot over the years, and its applications of it today are almost unrecognisable from its early days. The evolution of the web is often partitioned into three separate stages: Web 1.0, Web 2.0, and Web 3.0.
What is Web 1.0?:
Web 1.0 was the first iteration of the web. Most participants were consumers of content, and the creators were typically developers who build websites that contained information served up mainly in text or image format. Web 1.0 lasted approximately from 1991 to 2004.
Web 1.0 consisted of sites serving static content instead of dynamic HTML. Data and content were served from a static file system rather than a database, and sites didn’t have much interactivity at all. You can think of Web 1.0 as the read-only web.
What is Web 2.0?
Most of us have primarily experienced the web in its current form, commonly referred to as web2. You can think of web2 as the interactive and social web.
In the web2 world, you don’t have to be a developer to participate in the creation process. Many apps are built in a way that easily allows anyone to be a creator.
If you want to craft a thought and share it with the world, you can. If you want to upload a video and allow millions of people to see it, interact with it, and comment on it, you can do that too.
Web2 is simple, really, and because of its simplicity more and more people around the world are becoming creators.
The web in its current form is great in many ways, but there are some areas where we can do a lot better.
Web 2.0 Monetization and Security
In the web2 world, many popular apps are following a common pattern in their life cycles. Think of some of the apps that you use daily, and how the following examples might apply to them.
Monetization of Apps:
Imagine the early days of popular applications like Instagram, Twitter, LinkedIn, or YouTube and how different they are today.
The process usually goes something like this:
The company launches an app, It onboards as many users as possible. Then it monetizes its user base, When a developer or company launches a popular app, the user experience is often very slick as the app continues to rise in popularity. This is the reason they can gain traction quickly in the first place.
Many software companies do not worry about monetization. They strictly focus on growth and on locking in new users but eventually, they have to start turning a profit.
They also need to consider the role of outside investors. Often the constraints of taking on things like venture capital negatively affect the life cycle, and eventually the user experience, of many applications that we use today.
If a company building an application takes in venture capital, its investors often expect a return on investment in the order of magnitude of tens or hundreds of what they paid in.
This means that, instead of going for some sustainable model of growth that they can sustain in a somewhat organic manner, the company is often pushed towards two paths: advertisements or selling personal data.
For many web2 companies like Google, Facebook, Twitter, and others, more data leads to more personalized ads. This leads to more clicks and ultimately more ad revenue. The exploitation and centralization of user data are core to how the web as we know and use it today is engineered to function.
Security and Privacy
Web2 applications repeatedly experience data breaches. There are even websites dedicated to keeping up with these breaches and telling you when your data has been compromised.
In web2, you don’t have any control over your data or how it is stored. Companies often track and save user data without their users’ consent. All of this data is then owned and controlled by the companies in charge of these platforms.
Users who live in countries where they have to worry about the negative consequences of free speech are also at risk.
Governments will often shut down servers or seize bank accounts if they believe a person is voicing an opinion that goes against their propaganda. With centralized servers, it is easy for governments to intervene, control, or shut down applications as they see fit.
Because banks are also digital and under centralized control, governments often intervene there as well. They can shut down access to bank accounts or limit access to funds during times of volatility, extreme inflation, or other political unrest.
Web3 aims to solve many of these shortcomings by fundamentally rethinking how we architect and interact with applications from the ground up.
Web3 enhances the internet as we know it today with a few other added characteristics.
Verifiable
Trustless
Self-governing
Permissionless
Distributed and robust
Stateful
Native built-in payments
In web3, developers don’t usually build and deploy applications that run on a single server or that store their data in a single database (usually hosted on and managed by a single cloud provider).
Web3 applications either run on blockchains, decentralized networks of many peer-to-peer nodes (servers), or a combination of the two that forms a crypto-economic protocol. These apps are often referred to as apps (decentralized apps), and you will see that term used often in the web3 space.
To achieve a stable and secure decentralized network, network participants (developers) are incentivized and compete to provide the highest quality services to anyone using the service.
When you hear about web3, you’ll notice that cryptocurrency is often part of the conversation. This is because cryptocurrency plays a big role in many of these protocols. It provides a financial incentive (tokens) for anyone who wants to participate in creating, governing, contributing to, or improving one of the projects themselves.
These protocols may often offer a variety of different services like computing, storage, bandwidth, identity, hosting, and other web services commonly provided by cloud providers in the past.
People can make a living by participating in the protocol in various ways, on both technical and non-technical levels.
Consumers of the service usually pay to use the protocol, similar to how they would pay a cloud provider like AWS today. Except in web3, the money goes directly to the network participants.
In this, like in many forms of decentralization, you’ll see that unnecessary and often inefficient intermediary are cut out.
Native Payments:
Tokens also introduce a native payment layer that is completely borderless and frictionless. Companies like Stripe and Paypal have created billions of dollars of value by enabling electronic payments.
These systems are overly complex and still do not enable true international interoperability between participants. They also require you to hand over your sensitive information and personal data to use them.
Crypto wallets like MetaMask and Torus enable you to integrate easy, anonymous, and secure international payments and transactions into web3 applications.
Networks like Solana offer several hundred-digit millisecond latency and transaction costs of a small fraction of a penny. Unlike the current financial system, users do not have to go through the traditional numerous, friction-filled steps to interact with and participate in the network. All they need to do is download or install a wallet, and they can start sending and receiving payments without any gatekeeping.
A New Way Of Building Companies
Tokens also bring about the idea of tokenization and the realization of a token economy. To get the money, they take on venture capital and give away a percentage of the company. This investment immediately introduces misaligned incentives that will, in the long run, not align well with building out the best user experience.
Also, if the company ever does become successful, it will take a very long time for anyone involved to realize any of the value, often leading to years of work without any real return on investment.
Instead, imagine that a new and exciting project is announced to solve a real problem. Anyone can participate in building it or investing in it from day one. The company announces the release of x number of tokens, give 10% to the early builders, put 10% for sale to the public, and set the rest aside for future payment of contributors and funding of the project.
Stakeholders can use their tokens to vote on changes to the future of the project, and the people who helped build the project can sell some of their holdings to make money after the tokens have been released.
People who believe in the project can buy and hold ownership, and people who think the project is headed in the wrong direction can signal this by selling their stake.
Because blockchain data is completely public and open, purchasers have complete transparency over what is happening. This is in contrast to buying equity in private or centralized businesses where many things are often cloaked in secrecy.
This Is Already Happening In The Web3 Space:
DAOs (Decentralized Autonomous Organizations), which offer an alternative way to build what we traditionally thought of as a company, are gaining tremendous momentum and investment from both traditional developers and venture capital firms.
These types of organizations are tokenized and turn the idea of organizational structure on its head, offering real, liquid, and equitable ownership to larger portions of stakeholders and aligning incentives in new and interesting ways.
DAOs could encompass an entire post in and of themselves, but for now, I’ll just say that I think that they are the future of building products and (what we in the past thought of as) companies.
How Identity Works In Web3
In web3, Identity also works much differently than what we are used to today. Most of the time in web3 apps, identities will be tied to the wallet address of the user interacting with the application.
Unlike web2 authentication methods like OAuth or email + password (that almost always require users to hand over sensitive and personal information), wallet addresses are completely anonymous unless the user decides to tie their own identity to it publicly.
If the user chooses to use the same wallet across multiple dapps, their identity is also seamlessly transferable across apps, letting them build up their reputation over time.
The new internet will provide a more personal and customized browsing experience, a smarter and more human-like search assistant, and other decentralized benefits that are hoped will help to establish a more equitable web. This will be achieved by empowering each user to become sovereign over their data, and creating a richer overall experience thanks to the myriad of innovations that is to come once it is in place.
When Web 3.0 inevitably arrives as hard as it is to fathom considering how smart devices have already changed our behavioural patterns, the internet will become exponentially more integrated into our daily lives.
Conclusion:
Imagine a new type of internet that not only accurately interprets what you input, but understands everything you convey, whether through text, voice or other media, one where all content you consume is more tailored to you than ever before. We are at the tipping point of a new phase in the web’s evolution. Some early pioneers call it Web 3.0.
Arguably, there are a few early-stage Web 3.0 applications that already exist today, but until the new internet becomes fully embedded in the web infrastructure, their true potential cannot be observed.
