Web 3.0 is the concept of a World Wide Web built on blockchain architecture where the control and monetization of content, social media, data storage, and other web-based applications are decentralized. The new World Wide Web, or Web 3.0, will use blockchain-based applications that will utilize decentralization, NFTs, and cryptocurrencies to combat the centralized control of other web-based applications by a few “Big Tech'' companies. Web 3.0 aims to give individuals more power over their data, increased privacy, and the ability to profit from their online activities.
The World Wide Web was invented by Tim Berners-Lee in 1989 while he was working as a computer scientist at CERN. The web was originally created to meet the demand for automatic information-sharing between scientists around the world. In 1993, CERN released the Web protocol and related code to the public, allowing royalty-free use. Web 1.0 was born, where thousands of content creators created their own personal web pages, which consisted mainly of static pages hosted by ISP-run web servers or free web hosting services. Users in the Web 1.0 era were primarily consumers of content, lacking the ability to actively interact with the static web pages. HTML, the initial programming language used in Web 1.0, had severe limitations, including the inability to add dynamically generated content to pages as all HTML code was limited to static pages. HTML also had security vulnerabilities, was limited in displaying content in an aesthetically pleasing manner, and the code was difficult to learn.
Due to the limitations of Web 1.0, many entities wanted to improve on the functionality of Web 1.0. The term Web 2.0, was coined by Darcy DiNucci in 1999, as users of the Internet were encouraged to provide content, rather than just viewing content. Web 2.0 broke down the barriers to many consumers creating content. Ajax programming and Javascript in the early 2000s allowed programmers to make dynamic web applications, where people could blog, self-publish their own content on WordPress, or engage others on social media sites. Web 2.0 went mainstream quickly, with the creation of Myspace in 2003, Facebook in 2004, and Youtube in 2005. These social media sites’ content came from user generated content, with the companies’ sites acting as a conduit.
From the early 2000s to 2020, Web 2.0 was dominated by “Big Tech” companies such as Youtube, Facebook, Amazon, Apple, Microsoft, Twitter, Instagram, and Spotify. In the Web 2.0 era, users of various Big Tech platforms have little privacy or control over their data, the content that they publish, and the content they see. These companies exercise full control of all aspects of each users’ experience, although they don’t produce the content. In fact, Big Tech companies like YouTube, Instagram, and Amazon have become gatekeepers, actively managing access to billions of potential consumers. In the UK, the Competition and Markets Authority estimated that Alphabet (“Google”) alone has controlled 89%-93% of the search advertising market, effectively having a monopoly. In addition, Google has used its market share to maximize its own profit while restraining competition in conduct that violates antitrust and competition laws. While businesses or content producers could try to avoid using Big Tech platforms, having a sustainable business without the utilization of their platforms has become improbable.
Furthermore, some Big Tech companies monetize user content and behavior on their platforms, taking a large percentage or all of the money generated from each user. In addition to users losing privacy over their data and not profiting from their content, many Big Tech platforms have engaged in controversial content moderation. Censorship, the banning of certain types of speech, or the perceived emphasis or de-emphasis of certain user-generated content by Big Tech companies on their platforms has led many to accuse Big Tech of using their power to push forth their ideologies or political biases.
In 2009, the first successful decentralized digital currency, Bitcoin, was released. In 2015, Ethereum became the first successful blockchain that allowed users to build complex decentralized applications that could power video games, lending, and non-fungible tokens (NFTs). After Ethereum, many other blockchains were released offering similar smart contract functionality, such as Cardano and Solana. Decentralized blockchains like Cardano with smart contract ability not only allow the transfer of tokens or coins, but could also use blockchain technology to power platforms of user-generated content similar to the Web 2.0 applications, but controlled by individual users and content creators instead of Big Tech.
Just as Bitcoin aims to eliminate the power of governments and central banks over money and DeFi aims to eliminate the financial intermediaries for financial services, Web 3.0 aims to cut out the Big Tech intermediaries. Today, Web 3.0 platforms are proliferating and being launched through the Genius X accelerator program and many other platforms or blockchains.
Web 3.0 essentially takes many of the technologies made possible by the Internet and attempts to use blockchain technology to decentralize control. In addition, Web 3.0 typically has the benefit of significantly lower cost and higher profit for content creators and users. One example is the music streaming services industry. Worldwide market share is dominated by a handful of companies, namely Spotify, Apple Music, and Amazon. These platforms have hundreds of millions of users. Thousands of artists currently have little to no power in negotiating how much they are paid per stream. Many artists already have agreements with record labels or distributors, who may be considered the “rights holders” of the artist’s music by Spotify. Since Spotify pays rightsholders directly, the artist has to split revenues first with Spotify, which could be taking a 25% commission, and then split remaining revenue with the record label or distributor. After all of these reductions, many artists are making less than $0.005 per stream.
A Web 3.0 decentralized application could potentially lower the cost for users and increase the profit for recording artists by allowing artists to sell their songs or albums as NFTs directly to the consumer, cutting out Spotify entirely. The NFT could also have additional perks for the holder such as discounts on future sales or tickets to live concerts, which creates longer term value for the NFT while also allowing buyers to monetize the NFT by selling it to others. In addition, the artists can set a higher royalty rate on each song or album, creating a long-term revenue source each time the NFT is sold. A Web 3.0 decentralized application (dApp) combined with NFTs could be used to effectively cut out music streaming services like Spotify or Apple Music, giving artists a much higher profit margin on their content. The artist could also sell tickets to future live or virtual concerts as NFTs, cutting out ticket sales and distribution companies, keeping a higher percentage of the profit from their performances.
Public blockchains like Cardano are tamper-proof, as NFTs enjoy the same security in transactions as Cardano’s native token. In addition, transactions are all verifiable by any party. Below are some key technical aspects of Web 3.0.
There are many applications of Web 3.0:
Web 3.0 has huge economic benefits, as it speeds up the internationalization of different countries' businesses and economies, breaking down political, economic, and commercial barriers. However, Web 3.0 can also combine other aspects, bringing together different cultures, beliefs, and norms.
Should developers be allowed to censor speech or activities according to their personal beliefs or their country’s laws? Should developers be forced to implement Know-Your-Customer (KYC) and AML regulations of certain countries while ignoring other countries’ preferences? As with other blockchain-based projects, Web 3.0 companies face the ethical question of building applications with no safeguards or rules.
In addition, the decentralization of Web 3.0 may be limited, as described by Moxie Marlinspike, the creator of Signal. Many crypto wallets like MetaMask and other dapps have to interact with the blockchain via a node that’s running remotely on a server. Since most individuals don’t run their own servers, companies sell API access to an Ethereum node. Many dApps and crypto wallets like MetaMask exclusively use two companies, Infura or Alchemy, in order to interact with the blockchain. This presents significant centralization risk as these companies can be regulated by government entities.
There are many benefits to Web 3.0, but many questions remain around security, protection for the end-user, and if Web 3.0 can ever really be decentralized.