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Web3 in a techno-nutshell

Investors are pouring billions into “the next evolution of the internet”. Is Web3 the future, or another Silicon Valley fever dream?

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A section of the “Difference Engine”, the first computer ever made, designed by Charles Babbage between 1823 and 1842

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There is an endless amount of jargon associated with new internet technology. It’s difficult to keep your eyes from glazing over every time a podcast host attempts to actually explain what crypto, blockchain, NFT’s and DOE’s are. Well, add another term to that list — Web3.

Some call it the next natural evolution of the internet. Others believe it’s a dangerous scam. But that hasn't stopped firms from investing billions of dollars into the technology, according to Crunchbase.

So what is Web3?

Proponents of Web3 like to tell a story about the internet in three parts. The earliest days of the internet are described as “Web 1.0,” where people could publish information in the form of read-only blogs. Everything was decentralized and unorganized. Web 2.0, the internet as we know it today, added the ability to edit, post, and write on malleable web pages. According to this story, corporations quickly consolidated and organized traffic (think Google, Facebook, Twitter, etc.) and began to trade personal data for “free” services.

Web 3.0, shortened to “Web3”, is just a way of referring to a proposed evolution of the internet framework we use currently. According to Wired, it has been touted as a solution to the corporate monopolization of the internet, through a decentralized system running on the same technology that supports cryptocurrency.

Gavin Wood, the cofounder of the cryptocurrency Ethereum, coined the term (no pun intended) “Web 3.0” and compares the internet as we know it to a “big baby” which has “grown old without growing up.”

In a post on his personal blog, Wood writes that the “present digital architecture will magnify society’s maladies, not limit them” by transferring power and trust into institutions that are not always incentivized to be honest or serve the wellbeing of their constituents.

The solution Wood proposes is Web3, which (as a very simplified explanation) puts the ownership of the internet into the hands of the users by dealing out “tokens” for participating. These tokens would go into an encrypted coin wallet that also identifies you as the user to the rest of the internet. A user could spend their coins to vote democratically on how they want their pockets of the internet to look, per the Harvard Business Review.

What are the dangers of Web3?

According to software engineer and author Stephen Diehl, Web3 has “exactly the same economics as a Ponzi scheme.” The buzz around cryptocurrency and Web3 relies on a speculative market, and the technology has zero actual market value. Like trading cards, the value changes subjectively.

Web3 and crypto tech is plagued with insecurity. Molly White, a crypto researcher, also has a problem with Web3, calling it “an enormous grift that’s pouring lighter fluid on our already smoldering planet.” She has compiled a library of scams related to investment in Web3 start-ups, NFT’s and stolen crypto tokens, exposing the dangers of an unregulated technology.

Atlantic writer Rex Woodbury believes that the incentives of Web3 would turn everything into investible assets, injecting a transaction into every relationship and confounding human agency with financial obligation.

Web3 supporters promise to solve many of the current internet’s woes. Critics fear it is a dangerous bubble that will soon pop. Experts on both sides of the argument agree — the internet as we know it is riddled with problems and must be remade. But the question remains: is Web3 the future?