Yahoo Finance What is Web3, the new version of the internet everyone is talking about
If 2021 gave us anything, besides an endless pandemic, a supply chain crisis, inflation, and, well…you get it, it was the mainstreaming of the term Web3. A largely nebulous concept, Web3 is being trumpeted by crypto and blockchain boosters as the future of the internet.
The idea is to create a decentralized web, where users can transport their data from service to service without corporate walled gardens stopping them. It’s a soup of much-hyped tech terms ranging from NFTs to the metaverse that captured the attention of powerful venture capital firms.
But it’s also found critics in some big names including Tesla (TSLA) CEO Elon Musk, who told The Babylon Bee on Wednesday that it “sounds like more marketing than reality.”
So is Web3 just jargon crypto bros are foisting on us? Or is it a new kind of internet that will change the world? The truth is, it’s a little of both.
Web3, the next frontier
Before we dive into the potential benefits and pitfalls of Web3, let’s go over why it’s called Web3. That name stems from Web1 or Web 1.0, the name for the original version of the internet that let you browse GeoCities sites or play silly Flash-based browser games. If you’re in your early 20s, this was essentially the Stone Age of the internet. Also, if you’re in your early 20s, I despise you for your youth.
Web2, otherwise known as Web 2.0, evolved from Web1 and featured the growth of social media platforms like Facebook, services like Uber and Venmo, and well, more or less everything that exists online today.
Web3, which I guess sounds cooler than Web 3.0, is the next evolution of the internet. An outgrowth of Web 2.0, it’s based on the idea that blockchain tech and digital tokens can foster a decentralized internet.
While Web 2.0 gave us the internet as we know it, it also brought heavy baggage. Just a handful of gargantuan companies control the web, whether that’s Google (GOOG, GOOGL), Amazon (AMZN), Microsoft (MSFT), Apple (AAPL), or Facebook (FB), and they’re happy to keep it that way.
There’s a lack of data portability, the ability to bring your information with you across devices. And if you purchase an app through one platform, it might not work on other platforms.
Big name tech companies also thrive on the data you give them. After all, Google and Facebook make the vast majority of their revenue from advertisements based on user information.
Web3, however, would allow sites and services to exist across decentralized computer networks and rely on blockchain technology to validate user data. The people who actually use sites and apps would then, ideally, own them. Participate in an online community enough, and you’d get a piece of it in the form of a digital token. Consumers, rather than a large corporation, would govern the service.
So where does the metaverse fit in?
Right, the metaverse. That’s the interconnected online worlds that everyone from Meta CEO Mark Zuckerberg to Epic Games’ Tim Sweeney have obsessed over. For the metaverse to exist as a group of expansive online worlds, you’ll need to seamlessly bring your user account, avatar, and data from place to place.
Individual companies owning various parts of the metaverse would likely make that impossible. Do you really think Meta is going to want to share its users with Roblox (RBLX) and Epic Games? No way.
That’s where the decentralized internet of Web3 comes in. If there’s no single entity controlling the sites and apps that make up the metaverse, users can jump from world to world with ease.
How would you pay for everything in Web3? With cryptocurrencies, of course. That has naturally brought crypto fans along for the ride.
The future of the internet
Web3 advocates will say the concept will be the dominant form of the internet going forward. But really, it’ll likely just be an amalgam of Web1, Web 2.0, and Web3.
Big Tech companies have already invested in Web3. Do you expect trillion-dollar companies that make up the larger internet ecosystem to give up their control? Come on.
The truth is Web3 isn’t some new version of the internet we’ll have to pack up and move to. It’s a growth of our current internet. And it’ll likely be a gradual transition that you hardly notice. After all, you don’t remember the moment we transitioned from Web1 to Web 2.0. Right?
And while there’s the potential for innovative changes like giving people more control over the services they visit the most, I wouldn’t expect the utopian paradise Web3 boosters promise.
Yes, the internet will soon change, but it’s not as though it hasn’t been changing this entire time.
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