What Is Web 3.0 and Why Is It Important?
What technology benefits over 3 billion people for 80% of their daily waking hours? Web 2.0 is a term that refers to the second generation.
Evolution from Web 1.0 to Web 2.0 and now Web 3.0
Between 1999 and 2004, Web 2.0, as coined by O'Reilly and others, moved the world away from static desktop web pages designed for information consumption and served from expensive servers, and toward interactive experiences and user-generated content, which gave rise to Uber, AirBnB, Facebook, and Instagram. Three core layers of innovation: mobile, social, and cloud, fueled the rise of Web 2.0.
We evolved from dialing up to the internet a few hours a day at home on our PCs to a "always connected" condition — the web browser, mobile apps, and personal alerts were now in everyone's pocket with the debut of the iPhone in 2007.
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| Source: Fabric Ventures |
The Internet was mainly dark and anonymous until Friendster, MySpace, and subsequently Facebook were launched in 2004. From enticing people to post photographs online with particular friend groups, to giving our homes to unknown guests on AirBnB, and even stepping into a stranger's automobile with Uber, these social networks enticed users into positive behavior and content production, including recommendations and referrals.
The Cloud played a role in Web 2.0
The cloud commoditized the creation and maintenance of web pages and apps by aggregating and refining mass-produced personal computer hardware over a global network of massive data centers. Companies may move away from purchasing and maintaining their own costly and specialized infrastructure and instead rent storage, computation power, and management tools on demand. Low-cost resources that scaled as their firms evolved might help millions of entrepreneurial initiatives.
Web 3.0 is Open, Trustless and Permissionless
While the Web 2.0 wave continues to produce fruit, the first signs of development from the next major paradigm change in internet applications, properly dubbed Web 3.0, are beginning to appear. Web 3.0 (originally dubbed the Semantic Web by Tim Berners-Lee, the Web's original creator) is an even more profound disruption, one that will eventually eclipse everything that has come before it. The move to open, trustless, and permissionless networks is a significant step forward.
They are ‘open' in the sense that they are developed with open source software by a community of developers who are open and available to the public, and they are executed in full view of the public.
The network itself is ‘trustless,' in that it allows members to connect openly or privately without the need for a trusted third party.
Anyone, including users and providers, can engage without the need for permission from a controlling authority.
The ability to coordinate and incentivize the long tail of work, service, data, and content providers that are the disenfranchised backdrop to many of the world's most acute challenges such as health, food, finance, and sustainability is the ultimate outcome of these new open, trustless, and permissionless networks.
Innovation layers of Web 3.0: edge computing, decentralised data networks and artificial intelligence
Web 3.0 is based on three new layers of technological innovation: edge computing, decentralized data networks, and artificial intelligence. Whereas Web 2.0 was driven by the introduction of mobile, social, and cloud.
While commoditized personal computer hardware was recently repurposed in data centers as part of Web 2.0, the transition to Web 3.0 is pushing the data center out to the edge, and frequently straight into our hands. Large traditional data centers are being augmented by a plethora of sophisticated computing resources distributed among phones, laptops, appliances, sensors, and cars, which are expected to create and consume 160 (!) times more data in 2025 than in 2010.
These data producers (from an individual's personal health data to a farmer's crop data to a car's position and performance data) may sell or trade their data without losing ownership control, giving up privacy, or relying on third-party middlemen thanks to decentralised data networks. As a result, decentralised data networks have the potential to include the whole long tail of data producers in the burgeoning "data economy."
Artificial intelligence and machine learning algorithms have advanced to the point that they can now make helpful, even life-saving, predictions and acts. The potential uses go far beyond targeted advertising into sectors like precision materials, medicine creation, and climate modeling when placed on top of new decentralised data structures that give access to a plethora of data that would be the envy of today's IT giants.
Web 3.0 paves the way for a future in which distributed users and machines may interact with data, value, and other counterparties without the involvement of third parties, thanks to a peer-to-peer network foundation. The end product is a modular, human-centric, privacy-preserving computer fabric for the next web wave.
What Impact Will Web 3.0 Have?
So much for technology, but what impact will it have on individuals and society at large? And how may this have an even bigger influence on our families, companies, and governments than today's applications? It has been said that one of the characteristics that distinguishes humanity is our ability to organize ourselves in the pursuit of a shared purpose. As a result, looking back in time / history to identify four important social & technological stages in human collaboration is extremely instructive:
Web 3.0 Will Impact Rural Dwellers
People in Villages could trade value, knowledge, and work with a small group of known counterparties – their choice of counterparties was restricted by geographic proximity and personal trust bonds. Because of the small scale, people typically played many jobs in society, such as farmer, firefighter, warrior, and parent. As a result, transactions were primarily centered on food, security, and recreation, with little coordination outside of essentially self-sufficient households.
Impact of Web 3.0 on Urbanised Cities
The number of counterparties with whom individuals might barter value, knowledge, and labour expanded dramatically in urbanised cities. It became economically possible to start new specialized firms, create accounting at the business level, and rely on others to provide the rest of the products and services that the city's people required. While certain geographical constraints persisted, the bigger spatial playing field and increased population density resulted in considerably more skill coordination between people.
More Importance of Web 3.0
People and organizations could transfer value, information, and collaborate with geographically distant counterparties they didn't necessarily know via trusted intermediates thanks to Web 1.0 and Web 2.0, which drastically reduced latency and cost. As the reach of counterparties grew by several orders of magnitude, really global firms began to emerge. From Facebook to eBay and AirBnB, today's internet facilitates worldwide coordination via a series of intermediaries, offering a digital social trust layer enabling strangers to connect. Unfortunately, we've grown excessively reliant on these networks, and when they shift from "attract" to "extract," their customers (whether people or corporations) pay greater costs or risk losing access to the site (i.e. the platform has the power to destroy your business running on it). While today's interactions may magically and dependably occur on a global scale, this machine is mostly powered by the $200 billion digital advertising industry, with "we the users" as the product. It is now well recognized that these ‘post truth' platforms have produced echo chambers inside which unfiltered and unapologetically populist or even false assertions ricochet and strengthen — sometimes with catastrophic results.
Women, men, robots, and companies will be able to trade value, information, and collaborate with worldwide counterparties they don't know or expressly trust without the need for an intermediary using Web 3.0. The most significant change allowed by Web3.0 is the reduction of the level of trust necessary for global coordination. This represents a shift toward intuitively trusting all network constituents rather than expressly trusting each member and/or attempting to gain trust extrinsically.
Why Web 3.0 Matters
Web 3.0 will radically extend the scale and scope of both human and machine interactions well beyond anything we can now envision. These interactions will be feasible with a far wider spectrum of potential counterparties, ranging from frictionless payments to richer information flows to trustworthy data transfers. Web 3.0 will allow us to engage with any person or computer on the planet without having to pay a charge to a middleman. From global co-operatives to decentralized autonomous organizations and self-sovereign data marketplaces, this change will open up a whole new world of previously inconceivable enterprises and business models.
This is significant because:
- Societies may become more efficient by disintermediating industries, eliminating rent-seeking third parties, and transferring value directly to network users and providers.
- Organizations can become more adaptive to change as a result of their new mesh of more adaptable peer-to-peer communication and governance links amongst members.
- Humans, businesses, and robots may share more data while maintaining more privacy and security.
- We can practically eliminate the platform reliance concerns that we see now in order to future-proof entrepreneurial and investment operations.
- We may own our own data and digital footprints by using digital scarcity and tokenized digital assets.
- Network members can collaborate to address previously intractable or ‘thinly distributed' issues through ‘modern mutual' ownership and control of these new decentralized systems of intelligence, as well as sophisticated & dynamic economic incentives.