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This article was contributed by Josh Drake, chief operating officer at DFINITY.
The web has been evolving for over three decades now, slowly bringing us from the early days of Web1, with static text and images, all the way through the rise of Web2, ushering on the internet we know today — one dominated by centralized platforms. Now, we’re at the beginning of Web3, which envisions value and data being seamlessly moved across decentralized platforms, where ownership and control are distributed. However, there are still a few hurdles that need to be overcome for the vision of this new web to come to fruition.
A brief history of the web
Despite its rudimentary nature, Web1 was an era defined by decentralized, open protocols. The earliest platforms run on the internet were powered by open-source code, shared through forums, bulletin board systems, and mailing groups. Most of it was unpatented and free.
Then, in the wake of the dot com crash (circa 2000), a new breed of online services emerged. With the rise of faster internet speeds, streaming sites, like YouTube and Netflix, started to become more prominent. Alongside this, social media came into being, and soon, the ability to link experiences to media via sharing videos or livestreaming became commonplace. This era also saw the rise of the mobile internet, granting even more access to these platforms thanks to cell phones and tablets.
However, these new platforms emerged from businesses and corporations. And the once open-source code and platforms that defined Web1 turned proprietary. Nobody could copy and modify these models without anticipating serious legal ramifications. Additionally, the emergence of such platforms corralled users into centralized hubs, ultimately controlled by big tech firms such as Facebook and Google. Before long, collecting user data became standard practice — often veiled behind ostensibly “free” services. This is, unfortunately, the foundational landscape of Web2.
The potential of Web3
Regardless of its trajectory thus far, the internet is evolving and decentralized applications (dapps) powered by blockchain promise to once again wrestle control away from a handful of centralized gatekeepers. An “internet of money” is emerging, along with distributed data hosting and user-controlled platforms.
Decentralized finance, or DeFi, already offers millions of people worldwide the means to exchange assets, earn passive income, take out loans, and much more, all without an intermediary taking a cut. This is bringing the cryptocurrency philosophy of banking the unbanked to reality.
It isn’t just about individual money management, either. This new world opens up possibilities for things like SocialFi — a portmanteau of social media and finance that aims to deliver exactly what you’d expect. Without blockchain, the options for sending money through a social app are more cumbersome, less secure, and would require an independent third party to instill trust in lieu of an automated and immutable payment layer. With that layer, however, users can transact trustlessly — eliminating costly middlemen and delivering more efficient payments.
There’s also the blossoming world of GameFi, deeply tied into visions of the coming metaverse. In-game economies will be powered by cryptocurrency assets and non-fungible tokens (NFTs). Following a play-to-earn model, gamers will be rewarded for their time spent engaging by earning assets of real value that they will truly own.
Moreover, beyond offering trustless transactions and disintermediating central entities, decentralized tech provides an entirely new business model to replace the internet’s prevailing archetype. This comes in the form of decentralized autonomous organizations (DAOs) that distribute control to a collective of users, allowing them to have a say in the direction of the platform, incentivizing usage through tangible ownership and governance rewards.
This means startups can now compete on a level playing field with incumbent services, attracting a user base via incentivization and driving network effects to extend reach.
The possibilities for this new internet to completely change how users, developers, and brands all interact are significant, but there’s still work to be done.
The shortcomings of current platforms that are holding back Web3
Despite the overwhelming array of possible use cases, there are still some major issues holding back this vision of Web3. For one, many self-described decentralized apps are far from being genuinely decentralized. It is not uncommon for the front end of these services to be running on cloud servers, meaning that access to them is still dependent on legacy infrastructure, and the blockchain is only occasionally tapped to send or receive data.
Even blockchain networks themselves, designed to be decentralized, lose that distinction if the majority of them run on Amazon Web Services or similar centralized corporate clouds. This is increasingly the case, even in the instance of Ethereum. A single point of failure such as this is precisely what blockchain was designed to combat, so the current situation is neither ideal nor sustainable.
Another common issue holding back progress is the fact that many Web3 services currently run on Ethereum, with notoriously high transaction fees, low throughput, and an inability to scale without external infrastructure. These inherent handicaps from the touted backbone of the Web 3 will stymy its potential. For the Metaverse to truly work for everyone, barriers to entry such as these need to be addressed, and soon.
How we’ll get there
Everything considered, it would be premature to say we’ve made it to Web3 just yet. But that doesn’t mean the groundwork isn’t being laid. For example, new platforms are emerging that look to completely unshackle themselves from Web2 standards. This includes the internet computer, a blockchain that runs at web speed, serves web, and provides an infinitely scalable platform for smart contracts. The internet computer has already surmounted scaling, speed, and fee issues, setting the stage for DeFi experiences that are neither slow nor expensive — allowing dapps to leverage the full potential of decentralized architecture.
For the vision of Web3 to come to reality demands every part of an online service, from front end to back end, to be hosted on-chain. There is no need for legacy infrastructure, meaning no gatekeepers and minimum downtime. This will make for 100% authentic Web3 experiences all while providing noticeably better performance.
One of the most essential elements of this new technological epoch, however, is that it be built correctly from the ground up. This is a chance to reimagine the internet, and it’s important to make sure it’s done in the interests of end-users rather than corporations.
Josh Drake is the chief operating officer at DFINITY.
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