The internet is changing and it’s happening fast. We’re moving away from the older Web 2.0 model and Web 3.0 is being built one piece at a time. But what is Web 3.0? Here’s a useful analogy to help explain it.
The internet is like an unplanned city. Because the city was built without a unifying theme a lot of it doesn’t make sense. There are dead ends in the streets, the infrastructure isn’t great and the city, although amazing, doesn’t function nearly as well as it could. Web 2.0 is the unplanned city.
Web 3.0 is the planned city. Now that we’ve seen what works and what doesn’t, we can start making improvements. We can straighten out the streets, improve the infrastructure and create something that makes more sense. The future web is going to combine the best elements of today’s internet with some new developments so that the internet can work better for everyone who uses it.
That’s the abstract overview. Now let’s get into the details, especially Web 3.0 blockchain and how DLT (Distributed Ledger Technology) is going to revolutionize the way money is sent around the internet.
How Web 3.0 is the Future of the Internet
The following are some of the key ways that Web 3.0 will be different from the internet we have today.
The best example of how Web 2.0 is flawed is that Twitter, and many other tech companies, kicked Donald Trump off the internet. Regardless of politics, it’s not a great idea to have a handful of unelected tech leaders who can dictate the internet’s terms.
Under the Web 3.0 model there will be resiliency and censorship resistance. People will interact on decentralized tech platforms, not platforms that are controlled by a handful of powerful individuals. This will also make the internet more resistant to government-level attacks, like those we’ve seen recently in Myanmar.
Google and Facebook are obscenely rich because they harvest data from users and sell it to advertisers. The business model for these platforms is advertising and the reason they’re so profitable is that they collect our data for free.
The problem is that nobody ever agreed to this. There was never a formal discussion to consider the pros and cons of such a system. The tech companies started doing it one day and then they never stopped. We’ve even seen this business model in finance, where Robinhood makes money by selling information about their users’ trades.
Web 3.0 is going to end this dynamic and create a healthier environment where users control their data. Here are two ways it could play out.
- Companies can’t collect data. It’s possible to redo the internet’s architecture to make it harder for large companies to harvest data from their users. The future web could use blockchain to protect user data and increase privacy.
- Users get paid for their data. Another option is that users could get paid for their data. Right now the injustice is that users generate a valuable asset but only the tech platforms benefit from that. Under a Web 3.0 model profit sharing systems are being made whereby users earn a share of the revenue that their data generates. One example of this is the Brave internet browser.
However the future web ends up being built, large companies won’t be able to steal user data forever.
Getting Paid for your Content
Web 3.0 is going to remove the middleman between content creators and consumers. Using cryptocurrencies and decentralized file sharing services, Web 3.0 will make it easier for individuals to be directly compensated for their articles, photographs, videos, songs, etc.
Substack is a great example of how this technology can work. Journalists and writers on Substack can put up their work and people can pay for a subscription. A majority of that money goes directly to the content creator.
In the coming years even Substack will be disrupted. Decentralized platforms will allow content creators to keep nearly 100% of their earnings.
What role will blockchain play in Web 3.0?
Moving money is the most obvious role that blockchain will play in the future web. The next generation Web 3.0 money transfer system will be built entirely on blockchain. This will enable instant, low-cost international payments.
Although it’s all but guaranteed that future money transfer services will be based on blockchain, we still don’t know exactly how these systems will be built.
It’s not clear how the new Web 3.0 financial system will be built, but what we can say for sure is that in ten or twenty years nobody will be using PayPal and Venmo to send money around. These products are built on top of the legacy financial system and they will be displaced by blockchain technology.
Blockchain systems will also replace traditional markets. At some point stocks will be tokenized and they will be based on a blockchain platform. Tokenized securities will trade 24/7, the exchange fees will be lower and settlement will happen instantly. This is only possible because of blockchain technology.
Web 2.0 vs. Web 3.0
When people ask what is Web 3.0 they’re often asking how is the future web different from what we have today?
One of the major differences is that Web 3.0 will give users more control over their data. Users will be able to decide who can collect their data and how it gets used. As mentioned earlier, developers could even create a way for internet users to get paid by the companies which collect their data.
Another big change is that everyone on the future web is going to have an online identity. This will be like a driver’s license, except that the identity will be secured by the blockchain and exist only online. We will use our identities to sign up for services, fill out mortgage applications, claim tax refunds and so much more.
Here’s a really cool example of how that identity can be used in a commercial application. Right now each person’s social media profile is proprietary to a given platform. There is no way to export content or to take your connections and move to a new platform.
In Web 3.0 a person’s online friends won’t exist on just one platform. Rather, friends will be linked through online identities. If a user opens an account on a new social media platform, they’ll bring all of their online connections to the new platform. That’s super cool because it decreases the power that large tech companies have over their users.
How Web 3.0 will change the Internet in the future?
In addition to everything we’ve discussed so far, Web 3.0 will support billions of new devices. The Internet of Things (IoT) revolution is very much a part of the future web. Billions of connected devices that interact with each other and can carry out complex functions. For example, a refrigerator that automatically orders food from Amazon and pays for it with cryptocurrency.
Artificial Intelligence (AI) is also going to play a role in the future web. Sophisticated artificial intelligence systems will analyze massive amounts of data. These systems will be able to do everything from monitor shopping trends to predicting political strife. Web 3.0 will be different because there will be more devices, more data and more sophisticated tools to make sense of it all.
The Transition Phase
The transition from Web 2.0 to Web 3.0 won’t happen overnight. It’s a slow move but it’s already happening, especially as blockchain technology matures and we find new ways to move money around the world.
The future web is going to be fairer and it’s going to work better for regular users. Large tech platforms like Facebook and Twitter may still exist but they won’t have as much influence as they do today. The Web 3.0 will be a big improvement over the current system and it’s going to be really interesting to watch it get built out in the coming years and decades.
This content is for informational purposes only and is not investment advice. You should consult a qualified licensed advisor before engaging in any transaction.