Web3

What is Web3?

Short answer:

Web3 is the decentralized form of the World Wide Web, meaning users own all of their own data (instead of tech giants). If users want to sell their data to advertisers, that’s their prerogative - the difference is: they have the choice.

Long answer:

Web3 is the next progression from (you guessed it!) Web2.

Don’t worry! You’re not going crazy.

The numbered iterations are rarely acknowledged in day to day conversation - it’s typically just referred to as ‘The Web’. 

(Similar to how you might own an iPhone 12, but only ever refer to it as your iPhone)

Speaking of iPhones…the development of ‘The Web’ follows an iterative framework similar to Apple products:

Each new iteration is a smoother version of what you already had, PLUS it has a cool new function.

So let’s take a look at each iteration and their cool new functions.

Here’s the story so far:

Web1 (roughly 1990-2000) = Shared information online. Plain text on a screen, very little interaction between the viewer and the site.

Cool new function: access to information like never before.

Web2 (roughly 2000-2010) = BUTTONS! Ok, buttons existed before this…but they’re indicative of the broader change: interaction! 

Millions of users start interacting with sites, watching videos, adding items to cart, completing payments, leaving comments and even subscribing to email newsletters (hi).

Cool new function: interaction 

Web3 (roughly 2010-Present) = Bitcoin comes along and changes everything. But Web3 isn’t Bitcoin, it’s a shift in incentive structure and a whole bunch of new functionality. Functionality that aims to be just as (if not more) secure and scalable as Web2, while cutting out the middle man through decentralization.

Cool new function: ownership (don’t worry we’ll explain this with examples down below)

A closer look at Web3

Let’s take a closer look at the three foundations needed to see Web3 realized: Security, Scalability and Decentralization.

Security

With Web3 technology, there isn’t a dedicated centralized security team updating operating methods to protect from attacks and verify the safety of each interaction (like in Web2).

Web3 systems operate autonomously, defending themselves from attacks, bugs, and other unforeseen issues. 

They can do this because they operate publicly across many individually owned computers.

Here’s an example for you:

If a Web3 cryptocurrency transaction is requested, it isn’t sent to a centralized processing hub, like Visa or Mastercard.

Instead it’s sent to thousands of individually operated computers who compete to process the transaction in exchange for a processing fee.

Because this transaction request is sent publicly to thousands of individual computers across the world, if one of them tries to alter the transaction values, the others all ‘call bullshit’ and they lose the transaction. 

This way, digital payments can be sent securely without any centralized controlling entity (aka banks).

Scalability

To put it simply, scalability means it won’t breakdown, whether there are 2 people using it or 2 billion people using it.

This has been all but achieved in Web2, but the problem faced by Web3 is that it needs to do so without using a centralized authority.

(Imagine if Google wasn’t operated out of a server farm in San Francisco, but instead by thousands of independently owned computers across the world. Yikes!).

Getting everything to work smoothly at scale is much easier said than done.

But if it can be achieved, individuals will be able to cut out the middle man and have part ownership of the Web3 products they use.

…which brings us to our final foundation: decentralization.

Decentralization

Why decentralize at all?

Everything seems to be going relatively smoothly with our current centralized systems…

Remember how we said each iteration offers a smoother version of what you already had, PLUS a cool new function?

Decentralization is at the core of Web3’s cool new function (ownership).

The core value pitch here is a two parter:

1. If no one entity controls something - there won’t be a ‘singe point of failure’ that can be targeted by individuals or governments in an attempt to shut it down or manipulate it.
   
   Eg: Governments can’t freeze an individual’s decentralized cryptocurrency because they don’t have oversight on the system that supports it (like they do the banking system).
   

2. Because there’s no middle man (aka owner), profits can be shared more evenly between users, contributors and operators.
   
   Eg: Let’s see how YouTube (owned by Google) might look if it were decentralized.
   
   How it works right now.
   
   - Google owns YouTube.

   - They own and operate thousands of computer servers to store the billions of hours of video content and maintain the site.

   - To make money, they sell ad space on the site.

   - Content creators make videos for their viewers, who get to enjoy the content in exchange for watching ads.

   - Any ad revenue generated is split 50/50 between Google and the content creator.

   
   How a decentralized YouTube might work.
   
   - No single entity owns [decentralized] YouTube.

   - Thousands of independently owned and operated computer servers (spread around the world), store the billions of hours of video content and maintain the site.

   - To pay the individuals running these servers, [decentralized] YouTube sells ad space on its site.

   - Content creators make videos for their viewers, who get to enjoy the content AND get paid in exchange for watching ads.

   - Any ad revenue generated is split 45/45 between the viewer and the content creator.

   - The remaining 10% goes to the individual hosting and distributing the video from their server.

The broad strokes value pitch of decentralization is:
No middle man = more shared resources (money) = more autonomy = more freedom.