The term Web3 has suddenly become popular and is often referred to in the literature. But what is Web3 and what does it entail?
To properly understand Web3, it is important to know what the preceding Web1 and Web2 entailed. Web1 refers roughly to the initial period from 1991 to 2004, and consisted of a collection of links and home pages. Websites were very static, read-only and had very little or no interactivity. Users were mere consumers of content.
Web2 was a major improvement and has often been referred to as the “read/write” version of the Internet, based around the idea of “the web as platform”, where users not only consume content, but can interact with the content or produce their own content and publish it on blogs, wikis, internet forums and marketplaces, making activities such as online banking and shopping possible. Some years later, the widely popular social media platforms such as Facebook, Twitter and Instagram took user-created content and sharing to a totally new level. Web2 or the “social web” is generally considered to have started around 2005 and continues to the present day.
But as time progressed, major technology companies started to harvest the data of internet users in order to create personalised and targeted advertisements, and simultaneously make billions of rand out of advertisers. Based on an intimate knowledge of our likes, dislikes, friends, love life, shopping habits, movements and preferences, the influence of the internet started to play a major role in our lives, shaping what we read, the entertainment we watch, the products we purchase, and how we communicate.
Unfortunately, many of the tech giants breached privacy laws. Facebook and Google, in particular, are known for the large fines of billions of rand they received for the breaching of privacy laws over the past few years. The intimate knowledge of users and personalisation can be convenient, but are also invasive.
Web2 has brought us remarkable free internet services, but we have sacrificed our privacy. Gradually, people are becoming tired of this exploitation and dominance by the large tech companies, as well as the “walled gardens” they have created. In most cases users only see what these big corporations want them to see. Since 2019, 43 percent of total internet traffic flows through Google, Meta, Amazon, Netflix, Microsoft and Apple. Google controls 87 percent of the global search market and Meta reaches 3.6 billion unique users across its four major platforms, namely Facebook, WhatsApp, Messenger and Instagram. It is thus easy to manipulate users through selective content and advertising, resulting in them losing their free choice.
This is where the need for Web3 originated. For the sake of understanding Web3 we could depict it as the “read/write/own” phase of the internet. Instead of using free technology platforms in exchange for personal data, users can now participate in the governance, protocols and operations of the web themselves. Web users are thus now becoming participants and shareholders, instead of mere customers or products.
Web3 is thus a next generation, decentralised internet defined by open-source and blockchain technology, where the investors decide what happens on the Internet, while on Web2 the systems and servers are owned by the large tech companies and they decide what happens.
The internet would initially have the same look and feel, but the internet activities would be represented by the user’s crypto-wallet and websites hosted through decentralised applications (dapps) or applications that will run on a blockchain network.
Web3 promises an anonymous single-sign-on with one user name and authentication method across all websites and accounts, instead of the current multiple logins. All activities that contribute to Web3 are also rewarded by a token (either NFT or fungible token, such as cryptocurrency) to incentivise participation and distribute ownership. Almost anything can be tokenised, whether it is a meme, a piece of digital art, a person’s social media output, tickets to a show or conference, or creative content.
Thus when content is created, an NFT representing that post would be “minted” and stored as an asset in a crypto-wallet. The token will represent ownership of the content, which can be traded with others via their wallets. The eventual returns will flow to the token owner and not the platform it is hosted on as is currently the case.
Although Web3 is still in its infancy, it could possibly represent the next generation of the Internet, where the power is shifted from the large technology companies to individual users. Unfortunately, there is currently no broad Web3 infrastructure, nor are blockchain networks equally distributed. It could also easily happen that blockchain projects are decentralised in name, but not in substance – often referred to as “decentralisation theatre”. Private blockchains, venture capital backed investments or decentralised finance (DeFi) protocols, where only a few people hold the keys to hundreds of millions of rand, are good examples of “decentralised theatre”.
But despite its problems and shortcomings, Web3 does have potential to improve data security and privacy beyond what is currently possible with Web2. It, however, remains to be seen if Web3 will live up to all the promises that have been made and if the culture of billions of internet users could be shifted from a free internet to a tokenised internet.
Professor Louis C H Fourie is an extraordinary professor at the University of the Western Cape.
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