Table of Contents
Today, there is widespread speculation that Web3’s promise has failed, is failing, or will fail in the future.
Detractors point to events like Crypto Monday, as CNBC’s Jim Cramer dubbed it on June 13, when the value of the world’s two largest cryptocurrencies, bitcoin and ether, plummeted. Others dismiss nonfungible tokens (NFTs) as passing fads that fail to deliver on their promise of securing ownership of unique digital assets.
This is folly.
Web3 is following the same trajectory as previous iterations of the internet: massive capital investment combined with daring attempts to address intricate technical challenges. As with the internet’s previous incarnations, early Web3 companies and products are stumbling due to usability and security issues, demonstrating how new and immature this frontier truly is.
With Web3 still in its early stages, these phenomena are to be expected.
People forget the technological challenges that confronted today’s internet in its early stages. Modems connected to personal and business phone lines in the late 1990s and early 2000s caused connection delays that sometimes exceeded a full minute. While waiting for a search to return results and navigating to a new webpage, latency lasted several seconds.
Today, we classify “Web3 companies” in a single step. However, it is important to remember the “internet companies” of the past, many of which failed. Nonetheless, some have triumphed and now lead their respective industries. The internet has become so ingrained in daily life that asking an entrepreneur if his or her company is a “internet company” is absurd. Today, all businesses are internet businesses. Everyone has access to the internet.
Only technologists could imagine a hyperlinked URL or a pop-up thumbnail image that could be shared on social media. Today, billions of people around the world use both internet features on a daily basis.
The current limitations of Web3 are real. The underlying infrastructure will take time to mature. Contemporary debates about Web3’s technical viability will be a distant memory in twenty years. Decentralized internet, democratic information access, self-sovereign identity, and trust and interoperability will be commonplace.
This isn’t to say that everything should be decentralized. Certainly not. A hospital’s database, for example, should and would be centralized. To protect national security, individual privacy, and public safety, best practices require that many datasets be maintained by a central authority. A mature Web3 environment will support a seamless hybrid of decentralized and centralized data. Both should and will be the case.
Web3 is the New Internet’s Decentralized Circulatory System
One way to think about today’s internet is to imagine all apps as individuals, data as their blood, and a database as their heart. That database, that heart, is the foundation upon which trust is built. We’re not making a heart with Web3. Instead, we’re creating a decentralized network of capillaries, veins, and arteries to share blood. At this early stage, we are still striving for the technological sophistication of a decentralized database system.
Web3 does away with the numerous free tech platforms that internet users now use to navigate the internet. People progress from being customers and simple users to active participants and shareholders in the protocol governance and operations of the internet. This is made possible by blockchains, or decentralized networks.
The nodes of a computer network enable the sharing of a distributed database that makes up a blockchain. Cryptography connects the data blocks that comprise a blockchain. The data is not controlled by a single entity, whether an individual or a corporation. Does the collective. And, once data is added to the blockchain, it is permanent and visible to all.
Individually Owned Data Gives People Power
Today, third-party apps act as data brokers, acting as intermediaries between businesses and individuals. However, today’s internet paradigm will eventually flip. Web3 will place data and the ability to grant access to data in the hands of the people who own it. This eliminates the need for third parties to control and broker this data, giving individuals control over their personal data.
Companies like California-based Fabric, a consumer data marketplace, remove the “middleman” from the current internet’s exchange of advertising data. These types of businesses obviate the need for current advertising powerhouses such as Google and Facebook. Consumers decide what information they want to share with advertisers. They have control over that information.
On a more basic level, Web3 will give individuals the ability to disclose relevant data in a given situation. A person seeking medication at a pharmacy will be able to demonstrate, using verified credentials, that he or she is the individual for whom the doctor wrote the prescription without disclosing information irrelevant to the interaction, such as a Social Security number.
Technological advancements will also eliminate the need for usernames and passwords to prove a person is a company employee in order to access the organization’s network or everyday software applications such as one’s Netflix account.
This new world will alter many interactions. Verifiable credentials, for example, open up new educational pathways. Students can gain the necessary skills in a measurable way through specific training programs, providing an alternative path to obtaining the credentials required for a job outside of a four-year higher-education institution.
Those who do graduate will have digital, verified transcripts that they can share when needed, eliminating the cost and time spent requesting them through one’s alma mater. Provable methods for matching skills with competencies required for a given position will benefit both job candidates and employers. People will be able to control their own health records and carry them digitally.
Societal challenges may also be overcome. Voting results, for example, will be available immediately, making election fraud impossible due to cryptography. To ensure that the names of deceased voters are removed from voter rolls, voter metadata must be maintained. It’s debatable whether people believe election results, but ensuring tamper-proof results is doable. The technology is already available.
Aside from technical expertise, the general public and business community will need to see and understand the benefits of a Web3 world in order to secure capital investments to make this developing Web3 framework infrastructure a ubiquitous reality. Web3 will take off once the value proposition is clear.
Disclaimer: The opinion expressed here is not investment advice – it is provided for informational purposes only. It does not necessarily reflect the opinion of EGG Finance. Every investment and all trading involves risk, so you should always perform your own research prior to making decisions. We do not recommend investing money you cannot afford to lose.