The term is far from new, but it’s come to mean some new things in the age of blockchain and Facebook.
The pandemic lockdowns, the emergence of the blockchain, the metaverse, and the unchecked power of Big Tech have many people thinking about what the web of the future will look like, and whether it can evolve away from the worst tendencies of today’s online world. And the term Web3 has come to represent one vision for what it could all look like.
When the World Wide Web first became a phenomenon in the 1990s, it was a pretty static medium, and many websites looked like little more than digital versions of print brochures. That began to change in a big way in the early 2000s. Web services such as Gmail were far more interactive and app-like than those that preceded them. The web also became more participatory, which led to an explosion of user-created content, first in user groups and blogs and later on social networks such as Friendster, MySpace, and Facebook (now Meta).
This new wave of richer experiences was known as Web 2.0 at the time, and over the past two decades it’s created vast wealth, reshaped industries, and exerted profound influence on how we live in the 21st century. But the web as we now know it has also seen all kinds of problems, from cybercrime to surveillance capitalism to widespread misinformation and a rapidly worsening erosion of trust. Web3, by its design, could offer better resistance to those problems.
While there’s no one official definition of the term, when people say “Web3” they usually mean a decentralized, blockchain-inspired web architecture that gives users more control over their digital content and currency, and where transactions depend far less on trusting a central authority such as a bank or a tech platform operator.
People were talking about “Web 3.0” even back when Web 2.0 was an emerging concept. But interest in Web3 appears to have gone up markedly during the weird quasi-recovery from the pandemic. Google searches for “Web3” have increased sixfold since the end of July, and the number continues to rise. Not all of the interest is positive, though: On Twitter, Web3 boosters are joined by plenty of people calling it an exaggeration of what the blockchain can do, or just a scam.
It’s true that many of the people talking about Web3 come from the cryptocurrency world. Cryptocurrency is the first and biggest use of the blockchain, and Web3 proponents think that blockchain technology—which creates a secure, shared repository of transactions that no single entity controls—can do far more. The blockchain may give users a way to carry their social content (and, perhaps, their reputation) with them between social sites instead of having it locked to Meta, Twitter, or TikTok. It might form the foundation of a new kind of marketplace for people selling physical or digital goods, as NFTs (nonfungible tokens) are already doing.
It’s also true that only pieces of Web3 exist today. The rest is aspirational. Building, then scaling, the technologies needed to fulfill the Web3 vision would require lots of time, money, and cooperation.
The magic of the original web was that everybody agreed to run their sites on a common, open-source protocol—HTML. Everybody could use it and nobody owned it. But there is no universal web protocol that lets anybody share social content across social networks, or to transfer money to friends and family regardless of what cash app or crypto wallet they use.
In the absence of such public protocols, venture-backed tech companies were able to offer such services via their own proprietary platforms. Meta owns the dominant social network platform, monetizing the personal data of its users. Amazon offers the dominant e-commerce platform, monetizing users and charging rents to third-party sellers. Apple and Google operate and monetize the dominant mobile app stores, selling their own mobile services and charging rents from third-party app developers. And so on.
This sort of architecture has in many cases favored the really big platforms, leaving the crumbs to smaller ones. It’s concentrated a lot of profit and market power in the hands of just a few Big Tech companies.
“By virtue of their control of all data, they control each and every interaction between users on the platform, each user’s ability to seamlessly exit and switch to other platforms, content creators’ potential for discovery and distribution, all flows of capital, and all relationships between third party developers and their users,” wrote Andreessen Horowitz cryptocurrency lead Ari Yahya in a 2018 blog post.
A more decentralized system, in theory, might allow for direct relationships or transactions among users, buyers, creators, and sellers.
“Web3 is about the creator economy, where users own the data and the economic rewards associated with the online value they create,” says Matthew Gould, founder and CEO of Unstoppable Domains. “Additionally, Web3 is a commitment to developers who build on blockchains that the rules of the game will never be changed, as has happened multiple times with the Apple App Store, Facebook, and Twitter in the past.”
It’s important to remember, however, that even the biggest blockchains, Bitcoin and Ethereum, are today nowhere big enough to handle the scale of mainstream financial services. Many people are working on scaling up the blockchain for cryptocurrency transactions, but a variety of other systems would need to be developed to manage social, e-commerce, and trust and reputation services.
METAVERSE ON THE BLOCKCHAIN
As defined by many people, the metaverse is also a Web3 experience. That’s because current web platforms and technologies can’t facilitate a crucial aspect of the metaverse—the ability of users to move freely between any virtual space or experience, just as we can use any web browser to navigate between sites on the web.
New protocols may be needed to guarantee a continuity of experience as users move from place to place in the metaverse. They’d allow us to move between the metaverse domains of, say, Apple, Meta, and Amazon, and the digital identity, content, and currency we carry with us would be honored at each place.
Meta, the Big Tech player making the most noise about the metaverse, seems to acknowledge this dynamic. CEO Mark Zuckerberg has said that Meta intends to build “for the metaverse,” not “build the metaverse.” Though it surely wants to play a leading role in developing the open standards that would govern the place, it’s not saying that the metaverse should be a self-contained, proprietary world like today’s Meta.
As people spend more and more of their time in digital space, the thinking goes, they’ll buy and accumulate more digital goods such as game skins and other digital apparel, digital art, digital real estate. In Web 2.0 a user might buy a new skin (outfit) for their avatar in Fortnite that they can use only in Fortnite, and pay for it only with V-Bucks, which have value only in Fortnite. A Web3 architecture might provide protocols for the avatar, the apparel, and the currency so that all of those things work anywhere within the metaverse.
“Building a metaverse bottom-up on top of open standards is like building a great city,” argues Andreessen Horowitz’s Yahya in an email to Fast Company. “It’s much harder, because it requires a large collective of people to come together and cooperate, but the output is much better.
“When it works, a great city—like a true metaverse—is a reliable scaffold upon which an infinite ecosystem of experiences and entrepreneurial activity can thrive,” Yahya adds.
The open standards required for the metaverse could be enabled by the blockchain. Users might use NFTs to prove ownership of their digital property. They could use the blockchain to manage, broker, rent, or sell their digital stuff. Some might decide to make a business of it, creating their own digital goods (represented as NFTs) or curating and brokering the goods of others.
“Web3 is a game changer for the future of social and digital ownership,” says Pierina Merino, founder of FlickPlay, a social NFT discovery app. “It enables our digital inventories to travel cross-platform without losing their value and authenticity.”