Web3 is the term given to a new era of the internet, based on decentralised technologies and offering radical advantages over the existing and highly centralised Web2.
The internet started life as a decentralised initiative run by its users. However, it was the centralised giants – vast corporations like Google and Facebook – who popularised the web and on-boarded billions of people. As we know, that success came at a price, as these companies abused their role and exploited their users for profit.
The next iteration of the web promises to return control to users with new technologies like blockchain, which brings autonomy, privacy and openness to the internet. To understand what Web3 is, and what it truly offers, it’s worth understanding how the web as we currently know it came to be, and what went wrong.
The web as we know it came into existence in 1989, when Tim Berners-Lee developed a set of standards and protocols to help share and manage information held on different computers.
While the earliest iteration of the web was non-commercial, it was soon effectively privatised and companies actively began to establish a presence. Millions of web pages were created. These were mainly static sites, and were mostly created by businesses rather than individual users. This was the ‘read-only’ web, and it lasted a little more than ten years.
The rise of the large tech corporations would completely change the character of the web. The second iteration of the web saw big businesses take firm hold of this new means of reaching consumers. Blogging became popular, powered by user-friendly publishing platforms, and social media made its debut – first with simple services like Friends Reunited and MySpace, but later in the form of Facebook, Twitter, and many others. E-commerce exploded in popularity.
While Web2 made it easy for anyone to participate, share information and shop online, those benefits came at a price. Just a handful of large corporations provided access to the majority of the services people used. In return for making their platforms available – ostensibly for ‘free’ – they took payment in the form of data, which they sold and used for ever more sophisticated and manipulative marketing, monetising users without their knowledge or often even explicit consent. Wonderful though the ‘read-write’ web is, it also has serious drawbacks.
A decade later, the shortcomings of Web2 had become clear. The centralised giants of the web had a virtual stranglehold on the internet. They had achieved near total control over who used their services and the content users were able to access. The web had strayed far from its original decentralised ideals.
Despite – or perhaps because of – the power of these corporations, new technologies were developed that began to give control back to regular users. While there’s no single, clear definition of Web3 (in keeping with its open and decentralised ethos), there are several broad themes that set it apart from Web2.
- Decentralisation. Web3 relies on decentralised systems that cut out the middlemen who have accumulated so much power and influence. Instead of relying on centralised companies and service providers, information is communicated peer-to-peer. Blockchain is a core technology of Web3, enabling secure, direct payments, outside of the control of banks and conventional payment processors. Blockchain also powers a new generation of financial services and gaming applications, which run without the need to trust anyone.
- Privacy. Strong encryption offers a high degree of privacy and anonymity, allowing users to transact and communicate without the risk of large-scale data harvesting that has plagued Web2 users.
- User-sovereignty. The peer-to-peer paradigm returns control to regular users, allowing them to own their own data and decide who has access to it. Moreover, because Web3 is open, anyone can use it: users are not reliant on centralised providers to access online services. No one is locked out by the gatekeepers of the current web.
- Censorship resistance. Similarly, no one has the power to erase or edit data. Transactions cannot be blocked or reversed, posts cannot be deleted, and accounts cannot be closed.
These features have led Web3 to be characterised as the ‘read-write-own’ web.
Current Limitations Of Web3
Web3 is still in its early days, and it’s far from perfect. Like the first web pages, clunky browsers, rudimentary social networks and awkward e-commerce platforms that marked the beginnings of Web1 and Web2, there’s still a long way to go.
Accessibility for Web3 is still relatively poor. Few regular web users are happy downloading MetaMask and managing their own private keys, for example. The user experience can be slow and difficult to understand – not least because it is so different to the centralised model of Web2, in which big service providers take all the responsibility on the user’s behalf.
On a very practical level, blockchain and decentralised systems aren’t yet capable of operating at the scale required to on-board billions of users. Layer 1 chains don’t have the capacity, and L2 solutions are not yet tried and tested; many exist, but regular outages and attacks suggest they’re not yet ready for prime time. The blockchain ‘trilemma’ – the holy grail of decentralisation, security, and scalability – has not convincingly been solved.
Finally, there’s the issue of regulation. This new iteration of the web offers enormous benefits, but also challenges and risks, and regulators are struggling to keep up. Without a clear regulatory framework for decentralised services, it’s unlikely that Web3 can achieve its potential.
What The Future Holds
Previous iterations of the web have shown that technology moves fast, and the limitations of Web3 are likely to be solved quickly. The goal of Web3 is to put the user back in control, removing middlemen and decentralising the web again to provide open, permissionless online services.
Some commentators are already looking forward to the birth of Web4, which may occur alongside the development of Web3. The themes for Web4 are greater mobility and the rise of AI, which will enable better integration between humans and internet-enabled devices. Wearable technology and seamless interfaces will allow users to treat the web as an extension of themselves, accessing information instantly and frictionlessly – as well as securely, privately, and trustlessly.