Some call it the next phase of the Internet. Some say it’s a quick scam that will fall apart. But what exactly is Web3?
The phrase “Web3” is widely used to refer to a new-age Internet that will run on the blockchain of recordkeeping technology, a decentralized public accounting system. The current iteration of the Internet, Web2, by comparison, runs on centralized company-owned servers.
WHAT IS THAT?
Web3 “offers a read/write/clean version of the web, in which users have a financial stake and more control over the web communities they belong to” by allowing users to own their data, according to the Harvard Business Review.
Investors hope this version of the Internet will lead to a democratization of data on the Web, where transactions and contracts can be double-checked by all users. However, consumers should be skeptical, according to venture capitalist Joe Lonsdale, as consumer products have yet to materialize despite heavy cash investments.
WATCH PALANTIR CO-FOUNDER JOE LONSDALE EXPLAIN WHY HE FELT WEB3 IS A “PONZI PROJECT”:
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“A lot of what people call Web3 was a Ponzi scheme, and it didn’t make sense,” the Palantir co-founder previously told Fox News. “That said, the protocols for having decentralized ownership are very interesting.”
Decentralization, a key feature of blockchain, distributes responsibilities for key Internet functions such as server control, transaction confirmation, and timestamping to a network of users rather than to traditional methods where all operations would be managed by a single company or organization. Where something like Amazon Web Services’ servers hosted almost 30% of the internet in 2020, Web3 promises to distribute that responsibility among users, fundamentally changing online interactions.
Decentralized digital infrastructures – such as cryptocurrencies such as Bitcoin and non-fungible tokens (NFTs) – are designed to be key components of Web3 and would be necessary for it to function.
WHY IS IT IMPORTANT?
“Longer term, it makes sense to have more decentralized power and something like Bitcoin to exist,” Lonsdale said in a previous interview. Bitcoin “allows the financial system more freedom from governments that do really bad things.”
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Elon Musk, meanwhile, expressed his skepticism about Web3.
“I’m not saying web3 is real – it seems more of a marketing buzzword than reality right now,” the Tesla chief said. tweeted last year.
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Twitter founder Jack Dorsey also questioned the new age internet.
Users “don’t own ‘web3′”, it tweeted last decemberthrowing cold water on the idea that users will be able to monetize their data online.
Dorsey worked on a Web3 competitorwhich claims on its website to be “a more decentralized web platform”.
To watch the full Lonsdale interview on Web3, click here.
Bradford Betz contributed to this report.