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3 Reasons Why People Are Calling Web3 the 'Future of the Internet'

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Person holding up a Bitcoin with a laptop on the desk in this image from Shutterstock.

Bitcoin, NFTS, and DAOs may only be the tip of the iceberg. (Image: Shutterstock)

It’s likely you heard of cryptocurrency and NFTs as they rolled out with wild popularity across the world. Over the past decade, these decentralized products have paved the way for global internet users to rethink who gets to own online assets with truly remarkable results.

For example, people living in countries with weak currencies have the opportunity to place their money into a global marketplace with cryptocurrency. That way, their money can maintain its value or even grow. These decentralized autonomous organizations, or DAOs, have taken root and become the object of futuristic dreams of what the next iteration of the internet could be.

This is where Web3 comes in. You may have already lived through Web1 and Web2. Here are three reasons why Web3 has gained traction — and three reasons why it may not pan out at all.

Web1, Web2, Web3: What’s the Difference?

These terms may sound foreign, but they’re straightforward and you may even remember them clearly. If you rewound the clock back to the 1990s when the internet became available for mass markets, the only way that people could really use it was to read static webpages. There was no way to respond to content as a viewer in the read-only medium. That was Web1.

Web2 came to life once internet users could finally interact with the content they viewed. Sometimes that looked like writing blogs, uploading videos, or commenting back and forth on a social media platform. The interactions between users and the internet as a whole marked the dawn of Web2, which we’re still technically in right now.

However, the premise of Web2 has become rather sticky. User contributions online are, for the most part, owned by massive social media companies. Facebook, Instagram, TikTok, and YouTube, among other platforms, analyze user contributions for data points and sell insights to make their profit. Web3 may be a new frontier of the internet where users can take control of their data and truly own their online contributions. This is possible for the following reasons:

Democratized Internet

As the internet shifted from Web1 to Web2, users had opportunities to contribute and interact with internet content. However, the entities that own that content are deeply centralized and under fire for functioning like monopolies. Users are increasingly uncomfortable with the fact that their data is a product that informs how companies sell products to them.

One tenet of Web3 is that you own your profile across a vast amount of websites. All of your information is encrypted and private in a virtual wallet, which means you can actually own your identity online.

Rise of Decentralized Technologies

Web3 hinges on one specific type of technology: blockchain. Blockchain powers cryptocurrencies like Bitcoin, as well as the sale of non-fungible tokens (NFTs). The central premise of blockchain is that it works as a distributed ledger, which means that interactions aren’t centralized in one specific server. Instead, they’re processed across a global network, which makes those interactions transparent to the end user. No social media company owns user data or has the right to it just because they store and process information.

Blockchain functions by users processing internal transactions. For example, User A wants to sell Bitcoin to User B. Users X, Y, and Z are alerted and incentivized to process that sale with coins. Users X, Y, and Z are prompted to solve a complex math equation to power the sales process. When solved, that equation creates the next ‘block’ in the chain. The user who solved the equation is awarded their coins. User A officially sells their Bitcoin to User B. It’s an economy that helps the internal network grow. Plus, blockchain isn’t only applicable to cryptocurrency — the premise powers the possibilities of Web3, too.

Blockchain Capabilities

Blockchain doesn’t require that users know anything about anyone else they do business with. There are different types of deployments for the same concept. For example, Web3 is what’s called a permissionless blockchain. Since there is no centralized area of business or control, users from all over the world have the same ownership over public data as anyone else and can see it accordingly.

Will This Actually Come to Life?

A professional working through a blockchain equation in this image from Shutterstock.
Web3 may be a ways away, but it presents important societal questions. (Image: Shutterstock)

Even though individuals and businesses already passionate about blockchain, NFTs, and cryptocurrency are likely to hop on board with Web3, there are looming questions for everyday people who don’t already use these technologies. Some considerations are:

Environmental impact

When blockchain users solve complex math equations, the power of those interactions zaps a ton of energy from global servers. Plus, the supercomputers working to solve these equations one after another aren’t built to do so. Thus, a byproduct of blockchain is e-waste. Laptops, servers, and other hardware are destroyed quickly because none of them were meant to perform this type of processing.

When a laptop is trash, there are only so many places it can be disposed of safely. The rise of these technologies has made the problem of e-waste worse. Criticism about cloud energy usage is rampant due to this. If blockchain is a tenet of Web3, that means that the world essentially has to consent to higher emissions and more e-waste.

Lack of accountability

Blockchain technology functions on the premise that interactions are anonymous. All information is public. While it sounds excellent, in theory, that no private company owns personal data, these dynamics can be socially troubling and are linked to a rise in cybercrime.

If you scroll through all of the apps on your phone and review the information within them, even if it’s anonymous, would you want your data to be public instead of held and secured within one of these private companies? What if someone could find you based on your data or know things about you that aren’t appropriate for them to know?

When these circumstances arise via blockchain, there’s little that can be done. Data can’t be altered once it’s written. It exists forever and no entity has the power to alter it, unlike a Facebook post where both a user and the company can report or delete it. There are major ethical questions as to how this technology could be harnessed to fulfill all of its promises without sinking into the underbelly of its own capabilities.

Ease of entry

Let’s face it: For all of the excitement around cryptocurrency and the democratization of money around the world, it’s complicated stuff with a huge barrier to entry. Would your parents, uncles, aunts, or grandparents prefer to keep using Facebook and not own their data, or try their hand at something like blockchain?

Even though there are lofty goals at the end of the road for Web3 that may (or may not) be attainable, it’s not going to make using the internet any easier for people who are struggling with technological literacy. Many would argue that the goal should be to make the internet easier for people to use, not more difficult.