As we enter into the dawn of web3, most of you are wondering what the so-called new era of the internet will look like. Is it just buzz-word worthy jargon, or a world-altering idea? Especially for independent creatives and small businesses, how will web3 change your online presence and the way you interact with audiences—from learning how to make a website to branding and marketing your talents.
While there’s still so much we don’t know about web3, experts, proponents and critics alike are already having conversations about the hopes, technologies, potential benefits and possible pitfalls surrounding it. And many brands and industries have begun implementing some fundamental components of web3.
In this article I’ll break down what you need to know so far about the evolution of our internet, including what web3 is, its defining qualities and how it could impact our online worlds.
What is web3?
While it hasn't fully arrived yet, the web3 we’re discussing refers to the currently-in-the-making internet infrastructure. According to web3 proponents, the future internet hopes to provide a more tailored, intelligent and autonomous browsing experience than what we know today.
Ethereum co-founder Gavin Wood coined the term web3 in 2014. It’s based on a concept popularized by Tim Berners-Lee, called “web 3.0” or “The Semantic Web.” In a 2021 Wired interview, Wood sums up his web3 vision: “Less trust, more truth.”
Web3 promises to use blockchain technology to create a decentralized internet ecosystem, creating a lot of interest within the business sector. The New York Times reports Venture Capital firms invested $27 billion+ into crypto-related projects in 2021—much of that going toward building web3. But even consumer-friendly brands have embraced the web3 hype. Reddit is reportedly preparing for cryptocurrency technology by tokenizing “Karma Points” on its platform. Nike’s recent purchase of digital fashion brand RTFKT puts them among the many fashion brands getting ready to digitally transform.
For every optimist, a few cynics balance the hype. Since web3 has yet to be fully implemented, no one can attest to its success or failures. A handful of familiar applications already make web3 a bit more palpable than a hypothetical concept. That, and our globally bruised post-pandemic ethos—ready to welcome what comes next.
The internet’s evolution: What did the web look like until now?
Have we reached a new era in the history of the web? First, let’s look at the defining characteristics of Web 1.0 and Web 2.0. Putting our day-to-day internet usage in its historical context can help us better understand how it evolved.
Web 1.0 is the internet we knew in the 90s. For those who didn’t live it (or need a refresher), think about a version of the web with sites like AOL, Netscape and message boards. Web design in this era was at its infancy, and users enjoyed a mostly read-only internet.
Made up of static web pages, users only sparingly interacted with web1’s interface. On top of that, most websites were owned by big companies and there was very little user generated content—which is perhaps one of the biggest contrasts between web1 vs. web2.
Web2 (2004-current day):
Web2 is the centralized internet era, where Big Tech (companies like Google and Meta, for example) own and distribute data. Not only do we get information from browsing, companies get information from us, which we often exchange in return for services. They use this data for targeted advertising.
Increased mobile usage plays a part in the internet’s exponential growth during web2. App creation revolutionized the way users interact, consume and produce content, goods and services—wrapping everything we need into an accessible, user-friendly interface.
Defining components and features of web3
It’s too early to rigorously define web3—so we can't go into detail yet on how to make a website, monetize a website or prepare your business for this new era. But we can still look at the emerging principles and driving technologies to better understand the future vision for web3 and how it will differ from the web we know today.
The following developing technologies are driving web3:
Blockchain technology: Blockchain is web3’s digital database and will be the driving force behind decentralizing the current web. The technology enables users to create, store and securely manage data without an intermediary.
Decentralization: Data, applications and services will be stored in multiple locations on the blockchain and distributed without a central authority, giving more control to the users and fewer opportunities for Big Tech companies like Meta and Google to use information for targeted marketing.
Artificial Intelligence: Advanced machine learning will facilitate smarter interactions across apps and user interfaces.
Cryptocurrency: A secure, decentralized currency based on blockchain ledgers (for example, Ether or Bitcoin.) Cryptocurrency will largely replace the currencies, banks and payment processors we currently use in web2. Crypto wallets and digital wallets are one method for using these currencies in web 3 transactions.
DeFi: DeFi (decentralized finance) will remove third parties from online transactions using a similar blockchain technology to cryptocurrency.
DAOs: DAOs (decentralized autonomous organizations), or user-owned communities free of centralized leadership, will run online services. Examples are cryptoco-ops, investor groups which use crypto-currency like Etheruem to purchase NFTs collections, support startups and more.
dApps: Web applications in web3, also known as dApps (Decentralized Applications) will run on P2P blockchain networks. In comparison to web apps today, when one entity (generally, the company) controls the backend, with dApps participants can simultaneously feed and consume content without third-party interference.
User autonomy: A decentralized web3 supports overall user autonomy, facilitating a permissionless, democratized web void of censorship, where anyone can join and own a piece of the web.
User anonymity: AI technologies in web3 will allow users to separate their digital personas from their real-life identities. With blockchain technology’s increased data security, web3 aims to make it harder for companies to access individuals' personal information and browsing history.
Web3 as we know it today
Many already-used technologies fit into the web3 category. You’ve probably heard of—and may have even used—some of the above technologies. While none of these innovations represent the fully fleshed-out web3 ecosystem, they’re slowly building the future landscape:
Brands in the Metaverse
The interactive, immersive and universal social media platform promises to unlock a new virtual world for the creative economy. Although the metaverse is a vague term, many companies are experimenting with VR and AI technology to future-proof their brand. Prime examples include Balenciaga, Prada and Thom Browne launching digital fashion collections for avatars and Institut curating NFT exhibitions in the metaverse.
The NFT hype
An NFT is a unique digital data unit stored on a blockchain. These already revolutionized the gaming, collectibles and art industry by allowing authenticated ownership of digital files. Today, many artists make and sell NFTs on crypto-driven digital marketplaces, or showcase them using digital art portfolios.
Investment in cryptocurrencies
It's hard to ignore the global popularity of cryptocurrencies. Since 2009’s introduction of Bitcoin, many individuals and companies have been inspired behind the new economic system’s ideology and invested in more than 4,000 types of cryptocurrencies.
Limits and early criticism of web3
However, web3 is not all hype. Some early critics are skeptical of a more democratized web’s feasibility, even with advanced decentralizing technology.
Others claim that blockchain technology is simply in too fledgling a stage to use and judge its effect. Tim O’Reilly, author of What is Web 2, notes that while the tech community has cycled through the compelling ideals behind web3 before, the system is too underdeveloped to bridge the gaps between decentralized technologies and non-web3 assets and systems.
In his article “Why it’s too early to get excited about Web3,” O’Reilly states:
“If web3 is to become a general purpose financial system, or a general system for decentralized trust, it needs to develop robust interfaces with the real world, its legal systems, and the operating economy.”
Molly White is another web3 skeptic keeping the tech world on their toes. The software engineer runs the blog Web3 Is Going Just Great, an open resource exposing the dark underbellies of web3. White updates her site in real time with news about fraud and corruption in the NFT/cryptocurrency markets, as well as criticisms of early web3 players’ impact on the economy, culture, and the environment.
Many critics, too, question web3’s sustainability. While blockchain technologies’ accessible nature inspires organizations and brands to promote and raise money for environmental causes—the cost of these transactions come at a harm to the environment. Some organizations already work to shed light on these pitfalls and improve web3’s impact on the environment.