What Is Web 3.0 & What Is It Missing To Fulfil Its Promise
While the promise of Web 3.0 is enticing, a lot of discussion and debate revolves around keeping institutions out of the mix
There is an economic winter coming this summer and it has already left quite a few out in the cold. As valuations of tech companies and cryptos rapidly correct, the question on people’s minds is what’s next for the internet?
Before we attempt to answer the question, it is important to understand how the internet went from being military innovation to being humanity’s greatest collective project.
From Web 1.0 to Web 3.0
The internet, like a lot of technology we use today, has its origins in war. It started as a way to overcome the logistical issues of moving massive code-breaking computers and sensitive magnetic tapes post World War 2.
Hence, it was restricted to research institutions and defence organisations in its early days. In fact, these groups were against the US Congress passing the 1992 Scientific and Advanced-Technology Act allowing the National Science Foundation to commercialise the internet.
That piece of regulation catalysed the journey to Web 3.0.
Web 1.0: 1990’s to the early 2000s- The Web 1.0 internet was an eclectic mix of peculiar communities governed by open protocols. The upside of community-governed protocols meant most of the value went to the edges of the network — users and developers.
While it was egalitarian, it lacked functionality. A layman could not readily become a part of a community, discover the best content, transfer money, or buy items easily.
Web 2.0: 2005 to 2022- The need for security, easy discoverability and usability led to the rise of the internet we are familiar with today. Today the internet is dominated by what are called “state aggregators” or platforms that aggregate data and members on two sides of a transaction. These internet and social media platforms made it easier for more people to create and distribute content and services. However, this doesn’t mean they are perfect. Gig economy platforms make billions of dollars while frontline workers earn poverty wages. Social media platforms earn ad revenue from algorithmic feeds that spread misinformation. Content platforms reward top creators with the most views/engagement leading to income concentration so extreme it’s worse than in most unequal countries.
That’s why the internet is swinging back to open, community-controlled services. The difference this time is that the community has the blockchain to democratise the data and code that gives platforms power.
Web 3.0: 2022 and beyond- This new era of the internet will be owned by builders and end-users and mediated by digital tokens created and operated by decentralised code.
It takes the best parts of Web 1.0 (open source and decentralised) and combines them with the best parts of Web 2.0 (ease of transactions and discoverability). Web 3.0 holds the promise of breaking the “walled gardens” of Web 2.0 and creating an interconnected world of value or an “Infinite Garden”.
The missing piece
While the promise of Web 3.0 is enticing, a lot of discussion and debate revolves around keeping institutions out of the mix. Not the least because the origin of the first cryptocurrency, bitcoin, comes from a paper to invent money not regulated by banks.
However, for an open and free internet, we need to take a more nuanced approach. Governments are essential to how we function. Even today, they are the most effective check on the power of platforms.
Working with regulators could help the industry understand and implement a lot of essential aspects they don’t have experience with. This applies to every major use case blockchain has. From protecting retail investors during volatile DeFi swings to ensuring traceability of agricultural produce for sustainability.
That’s why Xfinite is thrilled to partner with the Dubai government under the Virtual Asset License. Working with a forward-thinking regulator ensures that their decentralised applications and marketplaces can fast track development, testing, and scaling.
The nature of what we’re building, a decentralised entertainment ecosystem, entails the need for a borderless approach while staying true to the localised nature of culture. I hope the Virtual Asset Regulator Authority model can set a precedent for governance and help write the next chapter of the internet. After all, we owe the internet to government intervention in the first place.
*The author is Swaneet Singh, CEO, Xfinite Ventures