The other day my dad asked me what Web3 was all about (Web 3.0, yes – same thing only 10x more tech-sounding) and honestly, I had trouble explaining it. My answer included some muffled words like blockchain, decentralisation and ‘new internet’. I get Bitcoin and own a (rather tiny) fraction of one. I get DeFi. I get the Metaverse. (Read here all about that). But Web3? What on earth is going on and why am I having such trouble explaining it in simple, jargon-less terms?
I’m all about simplicity and I think that if you can’t explain something simply enough then you don’t understand it well enough. And I realised there must be something I was totally missing which was why I couldn’t explain Web3 (aka the buzzword that seems to be buzzing absolutely everywhere) to my dad in layman’s terms. Finance in general is a place that’s stupidly cloaked in jargon but I had seen nothing yet till blockchain came around! So, I dug. And dug some more. And listened. To people way smarter than me. Until I could make sense of it all. Though I bet some of you reading this will no doubt be super tech savvy and totally get all this tech talk but for those of you who, like me, feel a lil’ confused, then read on!
Where It All Began
For us to understand Web3 and all its jazz, let’s first get to grips with what the previous two forms of the internet were actually like. And it all began with Web 1.0. This was the internet in its purest, primal form. With no overlay of social media (psst: all that Web 2.0 stuff). In 1989, a guy called Tim Berners-Lee set up the protocols that would later become the internet as we know it. He wanted to create something decentralised (what Web3 is pretty much all about) that would basically let anyone, anywhere share anything. It was a little like magic. This web was more of an information centre rather than a platform where users can get together to create content. You wanted info. You found it. You read it. That was Web 1.0.
Then came Web2: the internet we use today. It’s where we share content, provide content and engage with content. But this internet is centralised. It’s run by companies (think Big Tech, like Google) who provide us with all sorts of ‘free’ services. Except when something is free, there’s usually someone, somewhere paying for it. And in this case, it’s us. We’re paying for all these free things with our own personal data which these guys use in attempt to sell us yet more things and even predict what we’re about to buy before we even know it (that’s where AI comes into play). And we end up becoming the product. So there ye have it, a nice merry go-round of us giving our data (for free) in exchange for services. Oh, and us spending yet more money. All in all, Web2 doesn’t quite sound like anything you’d want to be on, except that it’s the default internet. Until now, it was all there was. And we sort of rolled with it. Though after watching Social Dilemma (a must-watch Netflix Documentary btw!), my attitude toward all this changed.
Yet despite this, Web2 isn’t all bad. Like everything, it’s a mixture of good and bad. See, Web2 helped bring the internet to billions of people and all the opportunities that came with it; creating tons of new jobs and things we never thought possible. But on the other hand, a bunch of (grossly gigantic) companies have taken control over our internet which has meant they’ve been able to decide what should and shouldn’t be allowed.
Web3 is the answer to Web2’s prayers.
Web3 is all about decentralisation. And with that, comes trust. The co-founder of Ethereum (Gavin Wood) said that many crypto adopters felt that the internet needed too much trust. The internet we use (whether we like it or not) means that we rely on and trust a bunch of companies to act in our best interest which, as we know all too well, isn’t always the case. But there was no alternative, till now!
Web3 is all about using blockchain (a public record of crypto transactions), crypto and NFTs (proof of digital ownership) to give the power back to the users instead of it being solely with these tech juggernauts. Too much power in too few hands is never a good thing.
The 4 core ideas of Web3 as explained on Ethereum’s website:
– Decentralised: instead of the internet being controlled and owned by a few big companies, ownership is distributed amongst its builders and users
– Permissionless: everyone has equal access to participate in Web3; no one is excluded
– Native payments: Web3 uses crypto for spending and sending money online instead of relying on the outdated infrastructure of banks and payment processors
– Trustless: it operates using incentives and economic mechanisms instead of relying on trusted third-parties
There are a number of comparisons between Web2 (what we’re using now) and Web3 (what we’ll probably be using). This is taken straight from ethereum.org:
– Twitter can censor any account/tweet
– Payment services may decide to refuse payments for certain types of work
– Servers for gig-economy apps could go down and affect worker income
– Tweets would be un-censorable because control is decentralised (i.e. not owned by one single biz)
– Payments apps require no personal data and can’t prevent payments
– Servers can’t go down since they use Ethereum, a decentralised network of 1000s of computers as their backend
So you can clearly see the use, and real need, for Web3. But like any new technological innovation it’s important to keep an open mind along with a healthy dose of scepticism. Though you’ve gotta admit, it’s all quite exciting!
Now, if you really wanna test yourself at how well you know all this Web3 stuff, go and explain it to your grandparents!! If they get it, you’ve done a cracking job. And you can safely assume you know your stuff.
On that note, time to ring my gran!
Disclaimer: This blog is not investment or financial advice. It is my opinion only. This blog is not a personal recommendation to buy/sell any security, or to adopt any such investment strategy. Always do your own research before you commit to any investment.