Computer scientist Gavin Wood coined the term “Web 3.0” in 2014, presenting his vision for the future of the internet.
The phrase, also shortened to “Web3”, has become an internet buzzword recently with high-profile technologists including Twitter founder Jack Dorsey and Tesla CEO Elon Musk debating the term’s meaning.
Wood, who is one of the co-founders of Ethereum and founder of blockchain infrastructure company Parity Technologies, spoke with CNBC on an episode of the “Beyond the Valley” podcast to discuss his vision for Web3.
What’s wrong with the current web?
Proponents call Web3 a decentralized version of the internet – one that isn’t dominated by a handful of powerful players like Amazon, Microsoft and Google.
Web1 started with the idea of an open, decentralized internet, but Web2 – the internet as we know it today – led to the birth of trillion-dollar tech companies that have a strong hold on the internet and own much of the infrastructure that it uses. web is built on.
“The big problem with that is… pretty much the same thing as putting all your eggs in one basket, if something goes wrong with one of these services, you know, the service is suddenly unavailable to a lot of people,” Wood told CNBC’s “Beyond the Valley” podcast.
“Also, the keyword here is trust. We’re having to trust the people behind the services. We’re having to trust the business owners who run the service… And so yeah, we kind of managed to architect for that.” , a bit like a dystopian version of what the world could be.”
So what is Web3?
For Wood, Web3 is truly decentralized and a more democratic version of today’s internet.
“Web3 is really an alternative view of the web, where the services that we use are not hosted by a single service provider company, but are purely algorithmic things that are, in a way, hosted by everybody. So it’s like, it’s very peer to peer, right? … The idea is that all participants contribute a small slice of the final service,” said Wood.
“And so, nobody really has an advantage over anybody… not in the same sense, at least as, as you know, when you, for example, go to Amazon or eBay or Facebook, where the company behind the service really has absolute power over what they do in providing the service.”
Web3 Key Terms and Technology
Blockchain is a key technology behind Web3. It is most often associated with the bitcoin cryptocurrency and is the technology that underpins it. The bitcoin blockchain is a public ledger of bitcoin network activity. But bitcoin is not owned by a single company or person and is not issued by a central authority like a central bank. Instead, it is decentralized and the network is maintained by a global group of people running specialized computers.
So blockchain is a key technology and decentralization an important phrase.
Web3 is based on the idea of a “trustless” model. Right now, we have to trust companies to deliver the service they promise. But if Web3’s products and services are built on blockchains and are decentralized, you just need to trust the underlying algorithm to deliver that product.
This carries its own risks, of course.
What could a Web3 version of Twitter look like?
Wood gave the example of a Web3 version of Twitter that he said would give more users control over their posts and make it easier to verify identities, for example.
“So it’s a lot harder for someone to like it, to falsify my identity, because we have cryptographic evidence that I did it, and only I could have done it,” Wood said.
“We probably have bigger elements, like free speech… the system.”
Where does cryptocurrency fit into this?
Web3 advocates suggest that cryptocurrencies will play a key role in the future of the internet. An example could be where there is a Web3 application that runs on a certain blockchain that uses a specific digital currency.
For example, services running on the Ethereum blockchain may require ether-based digital tokens.
There have been thousands of virtual currencies that have popped up in recent years. But Wood said that Web3 the way he envisions it might not be too reliant on cryptocurrencies.
“I suspect that currency will continue to play a role in services. But I think … overall, we’ll start to see services delivered without the need to use tokens,” Wood told CNBC.
“And I think it’s going to be a big leap. And I think it’s one of the key factors that will open the door to the mainstream,” he added, suggesting that most people probably won’t want to buy too many different tokens. to use a service.
How will regulation work?
Bitcoin itself has never been regulated because it is very difficult to do, due to the fact that it is not owned by a single entity. However, companies that touch cryptocurrency in some way, such as exchanges, often find themselves under some sort of regulation.
So if a Web3 service is built on the same decentralization theory as bitcoin, how will regulators approach it?
For now, countries around the world are still trying to figure out how best to regulate cryptocurrencies and related technologies. Web3 is a part of that conversation.
Wood suggests that it will be difficult for authorities to regulate the Web3 services themselves. Instead, it might be in an app’s “self-interest” in terms of its product bringing in rules that align with regulators, Wood said.
He added that regulators may seek to regulate “users of the service rather than the service itself”.
Will it be the end of the tech giants?
Web3 advocates suggest that with Web3, the might of the tech giants can be challenged.
However, these same companies like Microsoft and Twitter are also investing in Web3.
Wood said it will be “hard to do damage … on these Goliaths,” but he compared their potential situation to Microsoft in the late 2000s and beyond.
“It doesn’t matter if you’re running the Windows operating system or creating your document in Microsoft Word… we use the web as our platform, and the web can be used on any operating system,” said Wood.
“Ultimately… I hope that Web3 will meet the needs of the future in a way that can never really be met by these centralized service providers,” he added.