Some call it the next phase of the Internet. Some say it is a fast money scam that will go bust. But what exactly is Web3?
The phrase “Web3” is used broadly to refer to a new age Internet that will run on the record-keeping technology blockchain, a decentralized public accounting system. The current iteration of the Internet, Web2, by comparison, runs on centralized, company-owned servers.
What is it?
According to the Harvard Business Review, Web3 offers a “read/write/proprietary version of the web, in which users have a financial stake and greater control over web communities”.
Investors hope this version of the Internet will lead to the democratization of data on the web, where transactions and contracts can be double-checked by all users. However, according to venture capitalist Joe Lonsdale, consumers should be skeptical, as mainstream products have yet to materialize despite heavy cash investments.
Watch Palantir co-founder Joe Lonsdale explain why he thinks Web3 is a ‘Ponzi scheme’:
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The Palantir co-founder previously told Fox News, “A lot of people are saying Web3 was a Ponzi scheme, and it doesn’t make sense.” “That said, protocols with decentralized ownership are very interesting.”
Decentralization, a key feature of blockchain, distributes the responsibilities of key Internet functions such as server control, transaction confirmation, and time stamping to a network of users instead. Traditional methods where all the operations would be handled by one company or organization. While Amazon Web Services’ servers hosted about 30% of the Internet in 2020, Web3 promises to distribute that responsibility among users, fundamentally changing online interactions.
Decentralized digital infrastructure – such as cryptocurrencies such as bitcoin and non-fungible tokens (NFTs) – are designed to be key components of Web3 and will be essential to its functioning.
How does it matter?
“In the long run, it makes sense for more decentralized power and the existence of something like bitcoin,” Lonsdale said in a previous interview. Bitcoin “allows for a greater sort of freedom for the financial system from governments that actually do bad things.”
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Meanwhile, Elon Musk has expressed doubts over Web3.
“I’m not suggesting Web 3 is real – right now it’s more marketing buzz than reality,” Tesla chief tweeted last year,
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Twitter founder Jack Dorsey has also raised questions on the new age internet.
The user is not the owner of “web3”, he Tweeted last DecemberThrowing cold water on the notion that users will be able to monetize their data online.
dorsey working on one Web3 CompetitorsWhich claims on its website to be “an additional decentralized web platform”.
Click here to watch the full interview with Lonsdale on Web3.
Bradford Betz contributed to this report.