“It sounds more like a marketing buzzword than reality right now”, launched Elon Musk, the CEO of Tesla and SpaceX about Web3 on his Twitter account, the social network platform which he acquired before putting a stop to this takeover project. However technophile and fervent defender of cryptocurrencies, the billionaire does not seem convinced by the promise of Internet of Web3. The promise can be read on the website of Web3 Foundation, an ad hoc foundation which is actively working for its advent.
Our vocation is to offer Web 3.0, a decentralized and equitable Internet where users control their data, their identity and their destiny. Web3 Foundation website
“Our vocation is to offer Web 3.0, a decentralized and equitable Internet where users control their data, their identity and their destiny“, details the site of the foundation. To do this, it promises “develop state-of-the-art applications for decentralized Web software protocols.” Clearly, Web3 is the possibility of no longer letting anyone decide for everyone what the Internet should look like.
And for good reason, Web3 Foundation is committed to answering this crucial question that everyone has been asking since the end of the Trump era: “Who owns the Internet?”. Why would Facebook, Twitter or another have such a strong right of censorship, without possible recourse? How does the Web3 Internet meet this requirement?
An evolutionary version of the web
To better understand what Web3 would be, let’s go back to the first two versions of the Internet justifying the name of Web3, short version of Web 3.0.
Web 1.0, the web in the early days of the Internet and Yahoo, was a simple, rather disorganized information portal where you could navigate between static pages. You couldn’t easily create content yourself.
The Web 2.0 era began in the mid-2000s. Sometimes dubbed “participatory web“, everyone can very easily share their opinion with the world or create content. It has seen the emergence of the platforms and social networks that we use on a daily basis, such as Facebook, Google or Amazon (GAFAM) or services like Uber or Wikipedia. But most of the exchanges are centralized by the big platforms.
To (re)read: Digital: how to regulate GAFAM?
It is from this observation that Gavin Wood coined the term Web3 in 2014. He now heads the Web3 Foundation, responsible for supporting decentralized technology projects.
What does a decentralized technology project mean?
Web3 advocates argue that online platforms today are too centralized and controlled by a handful of large corporations, such as Amazon, Apple, Alphabet (parent company of Google) or Meta (parent company of Facebook). These companies have amassed large amounts of personal data and content without users having any real control over it. As a reminder, Meta is in turmoil after whistleblower Frances Haugen’s accusations last December. She notably accuses the social network of promoting hateful content, through its algorithm policy.
To (re) see: The whistleblower in front of MEPs
The idea would therefore be to give power back to Internet users by creating a “decentralized” web where they can “transport” their data from one service to another. Web3 thus aims to eliminate the intermediaries that are the big tech companies, partly explaining the reluctance of billionaire Elon Musk.
To (re) read: What will Twitter run by Elon Musk look like?
How do we decentralize the Internet?
To better understand, let’s take the example of a social network. On Web2, a Meta company manages the Facebook platform. Users have the freedom to post content or search for information. But it’s Meta that reaps the benefits. She makes the decisions on how the algorithm is programmed but also if she wants to delete an account or ban an account. She also has privileged access to all user data. We can clearly see here that the system is centralized.
On Web3, the platform would be managed by its users, through a blockchain system, a secure and decentralized technological platform shared by users. A bit like a cooperative, each time the user publishes a message, he can earn a token for his contribution. This token will give him both the opportunity to participate in decisions made within the platform and to hold shares on the platform. He will make decisions on the evolution of the social network, whether to ban this or that person, with the other content creators. In addition, everyone will have control over their data and will own their data, with the possibility of reselling it or keeping it secret.
To (re)see: Blockchain, restoring digital trust
Instead of having a well-defined boss, all its users would have the means to intervene in the decisions of the company. On paper, the model looks ideal. But the blockchain model it is based on requires a lot of money. To store all this data, you have to invest in large data storage centers. And therein lies the whole problem.
How do you fund a decentralized system?
In 2021, no less than $27 billion was invested in start-ups working directly or indirectly on blockchain, NFTs or even cryptocurrencies. This year, global spending on blockchain solutions alone could reach $11.7 billion.
In June 2021, the venture capital fund a16z announced the creation of a new investment structure. Called Crypto Fund III and endowed with 2.2 billion dollars, it is entirely dedicated to Web3.
You don’t own Web3. The Investment Funds and their sponsors own it. He will never escape their motives. Jack Dorsey, co-founder of Twitter and former leader of the platform.
It was following this investment that the co-founder and former leader of Twitter, Jack Dorsey, expressed doubts about the potential of Web3 to restore power to users. He believes that venture capital funds will eventually regain control. “You don’t own Web3. The Investment Funds and their sponsors own it. He will never escape their motives. It is ultimately a centralized entity with a different label“, he argues.
You don’t own “web3.”
The VCs and their LPs do. It will never escape their incentives. It’s ultimately a centralized entity with a different label.
Know what you’re getting into…
—jack (@jack) December 21, 2021
Finally, regulators have raised concerns about certain aspects of the project, in particular decentralized finance, or DeFi, aimed at making users independent of banks. This could encourage money laundering.
The rise of NFTs (or non-fungible tokens) and cryptocurrencies helped propel Web3 into the limelight. Whether Elon Musk was right about him remains to be seen.
To (re) read: What are NFTs, these digital certificates that can be worth a fortune?