Web 3.0 (also called “Web3”) is a developing vision for the future of the internet focused on collective ownership - collective ownership both in the sense of “financial ownership” and “decision making rights”.
Importantly, it’s not a description of our current reality. Today blockchains haven’t yet scaled, and speculation has far outstripped the delivery of impactful, widely adopted improvements. It’s also a vision that is focused on the internet as whole, rather than specific segments (e.g. digital money, cryptocurrencies) or specific enabling technology (e.g. blockchain, distributed ledgers, peer-to-peer protocols).
In historical context, Web 3.0 aims to address important perceived problems with today’s environment. Web 2.0 is currently characterized by tech behemoths like Facebook and Google using closed ecosystems designed to amass and monetize user data. As the internet has grown, the public has unfortunately come to expect ads and limited control of their data as necessary payment for otherwise “free” services, but change is on the way.
Many foundational concepts for this vision were popularized with Bitcoin’s introduction in 2008. Rather than placing trust in self-interested tech companies and financial institutions or governments vulnerable to regulatory capture, Bitcoin encouraged people to place their trust in code and decentralized communities designed to host as well as maintain it.
A term coined in 2014 by Dr. Gavin Wood, Web 3.0 carries forward the same spirit of decentralization and belief in code as a solution. However, it also expands the scope beyond just “digital money” while aiming to add additional benefits beyond “censorship resistance”.
If we view this concept through the lenses of collective ownership, then it worth noting the distinction between “financial investment” and “decision making control”. “Financial investment” means that everyday users earn a larger share of the value they help create. Unlike centralized structures which tend to concentrate wealth, Web 3.0 organizations distribute coins and tokens to community members, both to share rewards of collective efforts and encourage greater participation. Rewarded behaviors can range from lighter activities like using protocols to heavier behaviors like being active community members or employees. Within this framework, users often also receive more control of and are able to better monetize the content and data they produce.
Despite the obvious downsides of speculation, it also has many benefits - as the case with cryptocurrencies, speculation may be a “feature, not a bug” (link). Similar to how financial investments work in the real world, speculation in Web3 companies can help drive public attention, attract capital, and incentivize team members. Just as prospective employees may be more likely to join a promising startup with likely valuable stock options, even lower levels of financial investment for lower participation levels may be quite effective.
The “decision making” aspect of Web 3.0 has been less developed, but is arguably more important. Though voting by communities today can be implemented on larger scales with greater sophistication, community members still undoubtedly carry more influence in Web 3.0 compared to users of traditional tech giants. On a more macro level, Web 3.0 also encourages greater cooperation and hence decision making across communities, by encouraging composability and interoperability. Borrowing an example from DeFi, foundational DeFi services are described as composable “legos” or “money legos” (link) precisely because they aim for simplicity in design by trying to do one thing well, relying on others to add additional layers of complexity, rather than tackling additional functionality as well as complexity entirely in house. Otherwise, the prevalence of open standards like ERC-20 (tokens) & ERC-721 (NFTs) as well as the emphasis on blockchain interoperability allow developers not just to leverage the code and ideas from neighboring communities but to have their systems communicate directly.
What’s the role of technology in all of this - isn’t Web3 (like crypto) all about technology at it’s core? Going far beyond just making sure things “work”, the role of tech in Web 2.0, in Web 3.0 technology makes the movement’s very values possible. Distributed ledgers, smart contracts, and NFTs enforce that censorship resistance. Interoperability and composability support collective decision making, while smart contracts can be used to support binding votes. Taking a long-term view, although it’s still the early days and much of the technology is still in development, there are clear promising signs on the horizon in the search for better alternatives to Web 2.0.