The digital life
Your alarm (on your smart phone) wakes you up. You scroll through posts on a social media platform. You get ready for the day listening to your favorite music on a music streaming platform. On your way to work and on your way back home, you listen to your favorite podcast on a podcast application. Back home, you log into your banking app to check your balance. It’s not a negative a number. You relax watching a new show you can’t get enough of on a video streaming platform. You’re digitally content and ready to call it a day.
The next day, you find your social media account is banned because you liked something harmful. Shame on you. One of your favorite musicians is no longer available on your music streaming platform due to licensing issues. Your favorite podcast is now banned on the podcast application for spreading misinformation. You log in to your banking app to see a negative number (it was an overdraft fee). To top it all off, the show you were really getting into is no longer available on your streaming platform for similar licensing issues shared by your favorite musician.
Let’s ignore the fact that you’re completely addicted to technology. The good or bad is debatable (probably bad) and an argument for another day. Today, let’s analyze our dependence on a centralized system founded on trust.
Built on top of the internet, the web evolves
The internet is just a bunch of underwater cables. Thanks to these cables, computers can communicate with each other.
The world wide web, web for short, leveraged the internet to bring the world closer together in unique ways.
The first iteration of the web served academic purposes. Academic institutions and governments shared documents with each other.
HTML paved the way for “Web 1.0”, a version of the web populated by static websites. It brought the web to the masses. We were fascinated by the fact that we could instantaneously (dial up permitting) access and share information.
Languages such as PHP and JavaScript evolved the web to “Web 2.0”. We were introduced to new concepts such as social media. Online banking became a valid method to access finances. Use cases such as online gaming became normalized. Streaming replaced radio and TV (not all of us are there yet).
We need to come to terms with the level of trust we’re putting in underwater cables to make all of this possible. That’s just something we have to live with. But are we okay with the level of trust we place in various institutions to provide us with these services?
Trust
You trust the company that created your social media app of choice to allow your voice to be heard. You trust the music streaming service that requires a monthly fee to provide you with the music you want to hear. You trust your podcast app to platform your favorite podcast. You trust your bank to keep your money safe (and not rip you off with fees). You trust video and gaming platforms to provide you with the shows and games you want to consume.
Our social and financial systems are founded on trust.
Do we think service providers have our best interest at heart? Or do they exist to create profits. We hope for the former, but we know the latter is what forms our reality. Often, maintaining the customer’s best interest aligns with making a profit. But that is not always the case.
In this system of trust, we abstract a lot of decision making onto the provider. Maybe this system is preferential to the alternative.
The alternative would be a framework where the consumers make all of the decisions. The consumers decide on who should and should not be platformed.
What is web3?
“Web 3.0”, or web3, is the next evolution of the web. Blockchains built on top of the internet enable web3. Applications built on top of blockchains absorb the defining characteristics of blockchains: trustless, decentralized, permissionless. These blockchain applications create the web3 ecosystem.
Moving away from the Web 2.0 system based on trust, web3 introduces a trustless paradigm. Rather than placing trust in centralized institutions as in Web 2.0, users of web3 respect the code as law. Additionally, web3 applications are decentralized. There is no central organization making decisions for the application. Web3 applications are permissionless. Users cannot be denied access to the application.
These features completely change our relationship with the web.
What changes?
Social media applications would change in the fundamental way messages are handled. Behind the scenes, messages would exist on something like Nostr. We would no longer rely on a Meta or an X to platform our online interactions. Instead, our messages would exist on a decentralized platform that can be accessed by anyone. This is a reality that could happen over night.
Music, video, and podcast platforms would work directly with creators. Music creators would upload their content to an application like Audius. Video creators would use a decentralized network such as Livepeer. In theory, podcasts would exist on a similar platform. What they all have in common is creators publishing their content directly to the platform without a third party. Creators and consumers interact directly relying on mediation through a decentralized network. We are not too far from this reality.
Applying web3 to the gaming industry is a bit more complex. There are many moving parts in game development. Complications such as game engines make it difficult to move towards a decentralized distributed network. Adoption of web3 in gaming would require cooperation between developers and a standard for developing games meant specifically for blockchains. With a successful implementation, players would interact directly with game developers in a decentralized network. Players would have true ownership of games and and in game assets, and developers would receive royalties for all sales of games and assets. But this reality is only possible in the distant future.
We have seen actual adoption of web3 in the financial setting. Decentralized finance (defi), with its many faults, has a large amount of value locked. Users can interact directly with applications such as Aave or Uniswap in a permissionless manner. All of the rules are dictated by the underlying code that powers the applications. Rather than having to place trust in a centralized organization as in Web 2.0, web3 users have direct access to the code. The code is law.
The case for web3
In theory, web3 is the logical evolution of the web. As technology advances, it empowers individuals while also connecting the world. Empowerment and connection are thematic elements of web3.
Individuals are empowered by a trustless, decentralized ecosystem. Rather than institutions creating rules, individuals make decisions.
The world is more connected as there is no permission required for participation.
Creators and consumers interact directly with each other. The value of transactions is not diminished by a middle man.
In theory, web3 is for the people. But what about in practice? Is decentralization just a meme?