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Web3 wants to democratize the internet and break corporate power
Blockchain and crypto assets are meant to bring change
There are still a number of issues to be resolved for the launch and success of Web3
From Web 1.0 to today’s Internet
In order to be able to understand what is meant by Web3, it is important to know Web 1.0 and Web 2.0 first. As we can see, unlike the third generation, the predecessors were each written with a dot and a zero. This has been removed in the latest version.
As the Deutschlandfunk Kultur website describes in a report, Web 1.0 was the beginning of the World Wide Web. It was a collection of many websites, all connected by hyperlinks. Web 1.0 was about pure information. There was no exchange or interaction. After this rather boring Internet came Web 2.0. It is the type of Internet that the public now knows and uses on a daily basis. Since the turn of the millennium, it has become a meeting place that connects many people from all over the world. Social media made it possible. In a short time, the Internet has changed completely and has become a place of communication, information gathering and consumption. This development has been shaped mainly by large corporations. With the accumulation of countless personal data, companies such as Google, Facebook or Twitter have assumed an incredible position of power on today’s Internet. So if you ask who owns Web 2.0, you can say that in today’s online world, it’s mostly businesses that are in the driver’s seat.
Web3: the blockchain is supposed to revolutionize the internet
Web3 wants to break corporate power and democratize the Internet. At least that’s the view of some Silicon Valley thought leaders. Blockchain is supposed to bring the new change. According to the Tagesschau, this is the means of choice to make the Internet a decentralized web of which each user can own a part. Neither tech giants like Google or Facebook, nor banks or government organizations would have a dominant position here. There is no control or supervision over the network. Blockchain makes all transactions transparent and traceable. Everyone has the power to have their own data and is responsible for it, and this data must also be able to be taken from one offer to another without any loss. “Anyone who drives to Uber Auto and racks up a 5-star rating, then drives to competitor Lyft, starts all over again. In Web3, I can take that with me. In Web 2, there were just silos of data”, quotes the Sddeutsche Zeitung Christoph Jentzsch, co-developer of Ethereum. By data silos, Jentzsch means large accumulations of data that are solely in the hands of large internet companies and no one else has access to. We would like to completely remove this with Web3. The corresponding social networks should no longer be under the control of individual providers, but should be created and managed by the community.
With Web3, users should finally take control of the Internet. What sounds great in theory is not so easy to put into practice. Before Web3 can take off and become a success, it must first get rid of a few problems.
For the transformation from second to third generation to be successful, a lot of risk capital is needed. According to the Tagesschau, this comes mainly from Silicon Valley, that is to say from the same investors who have already supported the major players in Web 2.0. Millions if not billions of US dollars must be invested in the crypto dream. Investors are anything but altruistic. Their risky investments must pay off sooner or later. To do this, they need returns and some right to co-management, which someone must ultimately pass on to them. And the big tech companies themselves, which actually need to be knocked down, are also extremely active in developing the next level of the Internet. Facebook has therefore renamed itself Meta and pursues the goal of creating a metaverse, which is actually just another term for Web3. It remains to be seen if the power of individual companies can really be broken with Web3. Especially since we are also dependent on the help of Web 2.0 players. Without the help of Twitter, many users get little information about Web3, for example, and a transition from the second to the third generation can hardly take place.
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The next problem lies with the blockchain and its crypto assets. The Süddeutsche Zeitung writes that British programmer and blogger Stephen Diehl considers crypto assets to be as worthless “as those title deeds of individual stars in space that clever entrepreneurs sold in the 1990s.” Applying this analogy to each user’s share of the blockchain, participation in Web3 may only be worth a promised slice of the firmament. The question arises, what does participating in Web3 really bring to users? If you think of creating crypto assets as a kind of creating value out of thin air, you realize that when you make a purchase, you hold more crypto as an asset in your virtual hands. With blockchain and NFTs, while it is unmistakably clear and certain that one owns an item, the underlying value very much depends on the beliefs of the community. Similar to fiat currencies, crypto assets are valuable primarily because the public strongly believes in them. Unlike money, however, there are no institutions for crypto and Web3 assets that guarantee their intrinsic value.
This poses the problem of a lack of regulation and oversight. The great freedom and independence within Web3 go hand in hand with little protection. For proponents of the decentralized network, controls and powerful central organizations controlling what happens is a bad thing. You don’t want to be watched or controlled, and you don’t want to give anyone the power to make decisions about others. However, supervision has not developed in the banking and economic system without reason. Anyone who sees it as something negative and a restriction of rights completely ignores their right to exist. This opens the door to fraud and illegal activity on the Web3. A study by research firm Satis Group, for example, showed that nearly 80% of initial coin offerings (ICOs) are fraudulent. In these scams, actors collect money from investors in exchange for issuing tokens and then disappear without a trace. In a market where people are responsible for their own actions and data without restrictions, consumer protection does not exist. Economic activities on the Web3 are therefore associated with great risk.
Nicolas Flohr / Editor finanzen.net
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