Why Web 3.0 is Fundamentally Different From the Web We Know Today
Originally published on The Voyage newsletter on December 21, 2021.
Brief History of the Web
What is Web 3.0?
Well, let’s start with a little history. For us to understand Web 3.0, we must understand its predecessors Web 1.0 and 2.0. Web 1.0 is usually seen as the era of the World Wide Web until the early 2000s. This is when websites were mostly static HMTL pages with little styling capabilities. In this era, website style and structure were applied on the same layer. An important quality of Web 1.0 is that most internet services were built on open protocols and controlled by the internet community. I remember in the late 90s making websites on GeoCities and downloading pirated Adobe products to attempt making graphics. Back then, we would view the source code of websites to learn HMTL and all the styling was also found there. There were no separate CSS files.
Web 1.0 began as a de-central and community driven entity and all the advances and innovations that came in the Web 2.0 phase lead to centralized platforms.
Why Web 3.0 is a Game Changer
The next phase, what is becoming known as Web 3.0, is a phase of the internet where ownership is distributed to its users and builders. As Chris Dixon points out, the technology enabling this are Cryptonetworks (public blockchains) that embody the best of both worlds: they are community-governed decentralized networks and have an incentive structure to outpace the growth of centralized services.
Web 2.0 saw the rise of internet titans. They offered amazing services, and most of them were seemingly free. But while offering these free services, they were extracting and gathering data on our behavior and in some cases selling them off to the highest bidder. Beyond exploiting our data, companies like Twitter get to make decisions on the algorithms and determine what’s best for us and them. As does Facebook, LinkedIn, TikTok, and the rest of these centralized platforms. These companies own the Intellectual Property on their software and therefore profit from its market value.
Well, that’s where Web 3.0 comes in. In Web 3.0, all software lives openly and on the blockchain. Anyone can copy and fork the code and start a whole new project. Anyone that’s been involved or kept up with blockchain projects knows how frequently projects are forked off of the Bitcoin and Ethereum networks.
Cryptocurrency is Essential to Web 3.0
This is where the cryptocurrency aspect of blockchain starts to matter. The tokens or coins exchanged on the network have value and that incentivizes its builders and users to contribute to the success of the platform. The community owns the value of the platform.
When I first started analyzing and observing this dynamic, I assumed that we would see the same rise in a few central platforms in Web 3.0 just as we saw in Web 2.0 because it all comes down to the network effect, the phenomenon where increasing the number of participants improves the value of a service. My evidence for this is that Bitcoin and Ethereum still dominate in the space. But after listening to a TwitterSpace conversation with Chris Dixon and Naval, I started to understand that Web 3.0 is truly unprecedented.
Web 3.0 is fundamentally different from the previous iteration for two primary reasons: it’s completely open (no intellectual property protections), and two it is completely community owned. In other words, the code itself has no intrinsic value, the community’s agreement gives it value. If the community stops believing, the value dissipates.
Imagine a Web 3.0 based Facebook that was owned by its users and makers, how many code forks would’ve happened by now? Many of us are on Facebook because our friends are on there or it’s the only way to keep in touch with some people, but very few of us are actually happy and satisfied with the services. That wouldn’t really fly in Web 3.0. A group of developers and community leaders would’ve banded together, forked the code, and started something new. Users would choose where they go.
Of course there is still a network effect on Web 3.0 where the value of a platform is increased by the number of participants, but the ownership structure makes it more dynamic and flexible.
This post was created with Typeshare