Why Some See Web 3.0 as the Future of the Internet | WSJ

Summary

Web3, the envisioned third generation of the internet, is a decentralized ecosystem built on blockchain technology. It promises a more democratic and user-controlled web, where data is not monopolized by tech giants. Despite skepticism from industry figures like Elon Musk and concerns over scalability, the concept is driving significant investment and development in decentralized services. Web3's potential to reshape the online world, including the metaverse, remains a topic of debate and speculation.

Takeaways

• 🌐 Web3 is considered the third generation of the internet, a decentralized ecosystem based on blockchain technology.
• 🤔 Web3 is a new philosophy for realizing technologies in a more distributed and democratic manner, but faces skepticism about its global scalability.
• 💡 The term Web3 was coined by Gavin Wood, one of the creators of Ethereum, who envisioned it as an open, decentralized internet without the need for intermediaries.
• 📚 Web 1.0 was characterized by static web pages and a more decentralized web, while Web 2.0 introduced interactivity and centralization with platforms like Facebook and Google.
• 🔑 Web3 aims to give users more control over their data, allowing them to sell it if they choose, in contrast to the current centralized data economy.
• 🏦 The concept of Web3 includes decentralized finance (DEFI), where virtual tokens or cryptocurrencies incentivize participation in its operation.
• 🤝 Web3 could potentially offer more transparency and autonomy for users, with anyone able to own the computers that perform computations or store data.
• 🤖 Critics argue that the underlying blockchain structures of Web3 are insecure and not as decentralized as promised, with some seeing it as a rebranded form of centralization.
• 🌌 Web3 is sometimes associated with the metaverse, an immersive online world, but the two are considered distinct concepts by some.
• 💭 Web3 is still an abstract concept with limited real-world application, and skeptics question its practicality regarding computing power, bandwidth, and storage.
• 💰 Despite the uncertainty, the philosophy behind Web3 is driving significant investment in the venture capital world, funding a range of decentralized internet services.

Q & A

What is the term 'Web3' referring to in the context of the tech industry?

Web3 refers to the third generation of the internet, which is envisioned as a decentralized online ecosystem based on blockchain technology.

What is the fundamental philosophy behind Web3?

The fundamental philosophy behind Web3 is to realize technologies in a more distributed and democratic way, giving users more control over their data and interactions online.

Why are some tech experts skeptical about Web3's ability to scale globally?

Some tech experts are skeptical about Web3's scalability because they believe its early expressions are primitive and it may not have the necessary computing power, bandwidth, or storage to work on a practical level.

What was the early internet, known as Web 1.0, like?

Web 1.0 was a more decentralized version of the web where most participants were content consumers navigating through individual static web pages, and only a small number of users with technical skills could create and publish content.

How does Web 2.0 differ from Web 1.0?

Web 2.0 introduced more interactive web technologies like JavaScript and HTML5, allowing anyone to publish content online, even without coding skills. It is characterized by a few large companies owning and managing user data, often using it for targeted advertising.

Who coined the term 'Web3' and what was their vision for it?

Gavin Wood, one of the creators of the Ethereum blockchain, coined the term 'Web3'. He envisioned it as an open, decentralized version of the internet where users could exchange money and information without the need for intermediaries like banks or tech companies.

What is the role of blockchain in the Web3 vision?

Blockchain plays a central role in the Web3 vision by providing a decentralized, distributed ledger technology that allows for transparency and autonomy, enabling users to have more control over their data.

How does Web3 aim to change the way users interact with online services?

Web3 aims to allow users to have a single, personalized account that they can use to move seamlessly between different online services, creating a public record of their activity on the blockchain.

What is DEFI and how is it related to Web3?

DEFI, or decentralized finance, is a central element of Web3 that involves the use of virtual tokens or cryptocurrencies to incentivize participation in the operation of Web3, allowing for financial transactions without centralized control.

What are some criticisms of Web3's underlying blockchain structures?

Critics argue that the underlying blockchain structures of Web3 are insecure and not as decentralized as promised. Some believe they are as centralized as previous technologies, and that the concept of Web3 is more of a marketing buzzword than a practical solution.

How is the concept of Web3 related to the metaverse?

Some see Web3 as a critical building block for creating the metaverse, an immersive online world where people can use avatars for various activities. However, others argue that Web3 and the metaverse are distinct concepts with different focuses.

What is the current state of Web3 in terms of real-world application and investment?

As of the script's recording, Web3 is still an abstract concept with little real-world foundation. However, the philosophy behind it is driving significant investments in the venture capital world, funding the development of a vast ecosystem of decentralized internet services.

Outlines

00:00

🌐 Introduction to Web3 and Its Decentralized Vision

This paragraph introduces Web3 as the third generation of the internet, characterized by a decentralized online ecosystem based on blockchain technology. It highlights the concept of Web3 as a new philosophy for a more distributed and democratic use of technology, with venture capitalists investing heavily in this vision. However, there is skepticism about its scalability, with critics like Elon Musk considering it a marketing buzzword. The paragraph also contrasts Web3 with the earlier versions of the web, Web 1.0, which was more decentralized, and Web 2.0, which is centralized and controlled by major tech companies. The potential of Web3 to reshape the internet with more user control over data is also discussed.

05:02

🤔 Skepticism and the Future of Web3

The second paragraph delves into the skepticism surrounding Web3, questioning its security, decentralization, and the practicality of its underlying blockchain structures. Critics argue that it may not be as decentralized as promised and could be as centralized as previous technologies. The paragraph also explores the relationship between Web3 and the metaverse, noting that while some companies are trying to connect the two, they are distinct concepts. Web3 is described as an abstract concept with little real-world application currently. Skeptics, such as Stephen Diehl, argue that Web3 lacks the necessary computing power, bandwidth, and storage to be practical. Despite these doubts, the paragraph concludes by noting the significant investments being made in Web3 startups, suggesting that the concept will continue to be relevant for some time.

Keywords

💡Web3

Web3 refers to the third generation of the internet, characterized by a decentralized online ecosystem based on blockchain technology. It is central to the video's theme as it represents a new philosophy for realizing internet technologies in a more distributed and democratic manner. The script mentions venture capitalists investing billions into this vision, despite skepticism about its scalability.

💡Decentralization

Decentralization is the concept of distributing authority and decision-making away from a central location or entity. In the context of Web3, it implies an internet where control and power are spread out rather than being concentrated in the hands of a few large corporations. The video discusses how Web3 aims to give users more control over their data through decentralized systems.

💡Blockchain

Blockchain is a type of distributed ledger technology that underpins cryptocurrencies and is integral to the vision of Web3. It allows for secure, transparent transactions without the need for intermediaries. The script explains that in a Web3 world, blockchain could provide users with more autonomy and control over their online activities.

💡Venture Capital

Venture capital refers to the financial backing provided by investors to startups with perceived long-term potential. The video mentions venture capitalists investing billions into Web3, indicating a belief in its potential to revolutionize the internet, despite the skepticism from some tech experts.

💡Skepticism

Skepticism in the video pertains to doubts about the viability and scalability of Web3. Tech experts, including Elon Musk, express concern that Web3 might be more of a marketing buzzword than a practical reality. The script notes that the early expressions of Web3 are considered primitive, contributing to this skepticism.

💡Web 1.0

Web 1.0 is the first stage of the internet, characterized by static web pages and limited interactivity. It is mentioned in the script to contrast with the more centralized and interactive Web 2.0, and to set the stage for the proposed decentralized nature of Web3.

💡Web 2.0

Web 2.0 represents the current stage of the internet, marked by interactivity, user-generated content, and the dominance of a few large platforms like Facebook and Google. The video discusses how Web 2.0 is centralized, with a few companies controlling user data, which Web3 aims to change.

💡Data Economy

The data economy refers to the monetization of user-generated content and data. In the script, it is mentioned that Web3 could disrupt the current data economy by allowing users to have more control over their data and potentially sell it, rather than having it controlled by monopolistic tech companies.

💡DEFI (Decentralized Finance)

Decentralized finance, or DEFI, is a system of financial services operating on blockchain technology without centralized control. The video explains that DEFI is a central element of Web3, where virtual tokens or cryptocurrencies incentivize participation in the decentralized system.

💡Metaverse

The metaverse is an immersive, virtual environment where users can interact using avatars. While some companies are trying to connect it with Web3, the video notes that there are differing views on whether the metaverse and Web3 are closely related concepts. The metaverse is presented as a potential application of Web3 technology.

💡Cryptocurrencies

Cryptocurrencies are digital or virtual currencies that use cryptography for security and operate on a decentralized system, such as blockchain. The script discusses how cryptocurrencies could play a role in Web3 by providing a means of exchange without intermediaries, although critics view them as part of a speculative bubble.

Highlights

Web3 is the third generation of the internet, a decentralized ecosystem based on blockchain technology.

Web3 embodies a new philosophy of utilizing technology in a more distributed and democratic manner.

Venture capitalists have invested billions into the Web3 vision, despite skepticism about its global scalability.

Elon Musk and other tech experts have expressed doubts, labeling Web3 as a mere marketing buzzword.

The early expressions of Web3 are considered primitive, contributing to skepticism.

Web 1.0 was a more decentralized version of the web, with users primarily as content consumers.

Web 2.0 introduced interactivity and user-generated content, leading to the rise of major tech platforms.

Centralized tech companies currently control and monetize user data through targeted advertising.

Olga Mack discusses the potential of Web3 to reshape the internet with a user-centric data economy.

Gavin Wood, co-creator of Ethereum, first coined the term Web3, envisioning an open and decentralized internet.

In Web3, users are theoretically able to exchange money and information without intermediaries like banks or tech companies.

Decentralized ledger technology, such as blockchain, offers transparency and user autonomy in Web3.

Web3 proposes a single, personalized account for seamless movement across various online activities.

Virtual tokens or cryptocurrencies are central to incentivizing participation in the operation of Web3.

Decentralized finance (DEFI) is a key element of Web3, allowing for the financialization of interactions.

Regulation and large-scale operation of the decentralized token system in Web3 remain unclear.

Critics argue that the blockchain structures of Web3 are insecure and as centralized as previous technologies.

Web3 is considered by some as a building block for the metaverse, an immersive online world.

Web3 and the metaverse are distinct concepts, despite current hype and intersection in some companies.

Web3's real-world foundation is minimal, and skeptics argue it lacks the necessary computing power and infrastructure.

The philosophy behind Web3 is driving significant investment in decentralized internet services, despite its abstract nature.

Transcripts

- [Narrator] Web3 is the newest buzzword

taking over the tech and venture capital world.

And if you've found yourself wondering what it means,

you're not alone.

Web3 is seen as the third generation of the internet,

a decentralized online ecosystem based on the blockchain.

- Web3 represents kind of a new philosophy

about how to realize these technologies

in a more distributed and democratic way.

- [Narrator] Venture capitalists have invested billions

into this vision, but some tech experts are unconvinced

that Web3 could scale globally.

Skeptics like Tesla CEO, Elon Musk,

have called it a marketing buzzword.

- A lot of the skepticism about web 3.0 comes from the fact

that it's early expressions are fairly primitive.

- [Narrator] As experts debate

whether or not this new version of the web

can become a reality,

here are some of the underlying principles

behind the vision for Web 3.0.

(keyboard clicking)

To better understand Web 3.0

and what sets it apart from the web we use today,

you have to go back to the early days of the internet,

what experts now refer to as Web 1.0.

Most of the participants were content consumers

who were limited to navigating

through individual static web pages.

- Web 1.0, for those who remember,

was just, you know, raw HTML

and lots of very simple web pages,

and it wasn't really controlled by anybody.

- [Narrator] This was a more decentralized version

of the web, meaning anyone who knew how to code

could build on it from their own computers.

But at this time only a small number of users

had the technical skills to create and publish content.

Then came Web 2.0,

which is the stage of the internet we're living through now.

Web technologies like JavaScript and HTML5

made the internet more interactive,

allowing startups to build platforms

like Facebook, Google, Amazon and many others.

For the first time, anyone could publish content online

even if they couldn't code.

- Web 2.0 is this modern, centralized verse of the web.

You know, we're all sharing things on social media

which are owned by, you know, only two or three companies,

and we're all using Google Search.

- [Narrator] These companies own and manage

the data collected from their users,

and they frequently track and save this data

and use it for targeted ads.

- What's at the core of their business model is data.

- [Narrator] Olga Mack is a blockchain lecturer

at UC Berkeley, and is optimistic about Web3's potential

to reshape the internet.

- The data economy, where the user generated content,

whether it's a conversation or a video,

that is an exchange for services.

And so there is a perception

that this monopoly of data could be abused.

- [Narrator] Here's where the vision for Web 3.0 comes in.

The term Web3 was first coined by one of the creators

of the Ethereum blockchain, Gavin Wood.

In a 2014 blog post, Wood envisioned Web3 as an open

and decentralized version of the internet.

Theoretically, users would be able

to exchange money and information on the web

without the need for a middleman,

like a bank or a tech company.

In this vision for a Web3 world,

people would have more control over their data

and be able to sell it if they choose.

And it would all be operated

on a decentralized, distributed ledger technology.

The most common version of this is known as the blockchain.

While still considered relatively new and unproven,

it could offer more transparency and autonomy for users.

- The computers that are actually

doing that computing for you or storing that data,

anyone could own those computers,

anyone can become a part of that blockchain.

And so it's not Facebook and Google's computers doing that.

- [Narrator] With a single, personalized account,

users would theoretically be able to move seamlessly

from social media to email to shopping,

creating a public record on the blockchain

of all that activity.

But how exactly would Web3 remain operational

if it's not controlled by a central corporation or entity?

Theoretically, people would be given virtual tokens,

or cryptocurrencies, to incentivize them

to participate in the operation of Web3.

A central element of the system

is so called DEFI, or decentralized finance.

- And the idea is that if you can issue a token

for everything in the universe,

if you can financialize every possible interaction

of computers and software and humans,

then you can create this vast ecosystem of cryptocurrencies

which can be traded,

which can be valued relative to one another.

- [Narrator] Still, it's unclear

how this decentralized token system would be regulated,

how it could operate on a large scale,

or even how well it would distribute

control of the internet.

Critics of the idea like Twitter co-founder Jack Dorsey,

called Web3 "a centralized entity with a different label."

- Developers who really dug into this

think that the underlying blockchain structures of Web 3.0

are very insecure, not decentralized as promised,

they're actually as centralized as previous technologies.

- [Narrator] Some see Web 3.0 as a critical building block

IN creating the metaverse, an immersive online world

where people can use avatars

to socialize, shop, work, and play.

But others say Web3 and the metaverse

are two very different concepts.

- Because the Metaverse is being hyped a lot right now

and Web3 is,

there are some companies at the intersection of the two,

like let's create a metaverse

that, you know, somehow it's connected to the blockchain.

- [Narrator] Right now, Web3 is still very much

an abstract concept with little real-world foundation.

Skeptics, like engineer and blogger Stephen Diehl,

argue that web 3.0, doesn't have the computing power,

bandwidth, or storage to work on any practical level.

- For skeptics of Web3, their argument is that,

you know, tokens and cryptocurrencies in general

are just a giant bubble,

and as soon as it pops, in their view, all of this nonsense

about how that's going to build the next internet

will go away.

- [Narrator] While it remains to be seen

whether or not Web3 will become a reality,

the philosophy behind it is driving billions in investments

in the venture capital world,

funding a vast ecosystem of decentralized internet services.

- So there's so much real-world money

going into building Web3 startups

that even if, as a concept, it proves unworkable,

we're gonna be hearing about it for a long time yet to come.

(gentle music)