Web3: An End for Monopolistic Tech Giants?
By- Lokesh Somani
The present internet is dominated by four tech behemoths: Meta, Apple, Amazon, and Google. Despite not being classified as a typical “monopoly”, they control more than 80% of the market share in their respective industries. Since their services are used by the majority of the world’s population, they wield enormous power over our lives. The Internet was supposed to be a free world, but it has veered off course. However, web3 aspires to decentralise and deprive these digital behemoths of their authority.
History of the Web
The World Wide Web’s inventor, Tim Berners-Lee, envisioned the internet as a collaborative and decentralised media, a place where everyone could meet, read, and write without the consent of central gatekeepers. On the other hand, the current scenario is diametrically opposite, with large tech companies wielding unregulated centralised control and power over what can be disseminated on the internet.
Web 1.0 (1994 – 2004)
Web 1.0 was the earliest iteration of the internet that we are acquainted with today, and it was driven by hypertext and static documents that were interlinked on the web for everyone’s consumption. This was a significant breakthrough as it allowed anybody from anywhere in the world to put out content on the web as long as they had an internet connection. However, the original web is also termed as a ‘read-only’ web since it confined user participation to simply browsing and reading what was already there.
Web 2.0 (2004 – Present)
The paucity of user interaction and content creation in web 1.0 paved the way for a far more user-oriented and engaging web, known as the social web or web 2.0 or a ‘read-write’ web. Search engines (Google, Yahoo) and social media platforms (Meta, Twitter) powered by user-generated content, disrupted industries such as media and advertising that formerly possessed the power of content creation. The business model of Web 2.0 is based on user engagement to create new content, with the resulting data being sold to third parties for personalised advertisements directed at the users.
Why Web2 is flawed
Web2 has played a highly influential role in the past decade by removing the barriers of communication and geography; yet, its business model has been heavily criticised for narrowing the ethical gap between profit and users’ privacy.
Attention Economy -User attention is the native currency. Sites use AI and algorithms to generate content loops and personalised feeds so that you can’t stop scrolling and clicking. Creating fire is the most effective approach for social media to gain attention. When click equals revenue, triggering and manipulating people and their opinions against each other is good for business.
Centralised Control – The internet’s forefathers envisioned a decentralised internet. However, in the quest for monetization and capitalisation, web2 appears to have lost sight of its vision. Nearly 90% of the web is managed by four companies, the largest being Amazon Web Services (AWS). Their data centres power the websites and apps we use every day, such as Meta, Twitter, Uber, and Netflix. These companies have total control over the internet. Either we play by their rules or we don’t play at all. Such censorship makes us rethink if the internet is truly free.
The Issue of Trust – Human civilisation originally came together when institutions permitted two strangers to conduct commerce with each other by serving as trustworthy third parties. Web2 replaced such intermediaries with a few ultra-large digital platforms which dominate,own, process and analyse users’ data without their knowledge. Social media, the tissue that connects us, is becoming Pandora’s box for dis/misinformation, an unregulated front for hate speech, racism, and bullying. Trust, as a multiplier, has diminished to a negative. We can’t trust Google, Twitter, or Uber to function as intermediaries because we don’t trust the people who constitute them. Most of the tech companies engage in unethical business practices to evade competition and enhance profits. How can we trust the means if the ends are not legitimate?
The centralisation and exploitation of users’ data without their meaningful consent in Web2 had prompted concerns about data privacy and ownership among the general users, yet there were no viable alternatives. The primary aim of Web3 is to decentralise this power from the centralised organisations.
Web3 is the third stage of the web’s evolution, and its services will run on the blockchain technology. It aims to create a decentralised online world in which data and information are distributed across various computer networks, and no entity can claim ownership of data without appropriate proof. Web3 operates on the same vision the pioneers of the internet worked relentlessly for – to create a free and decentralised internet. Before we understand the reason why web3 will create a better human society, we need to understand what a blockchain is and how it can solve the issue of trust.
What is a blockchain?
The blockchain is a decentralised digital ledger that keeps track of who owns what in a network. This might include money, property titles, medical data, or other things that a person can “own”. Each block on the chain contains a number of transactions, and whenever a new transaction happens on the blockchain, a record of that transaction is added to the ledger or block of every participant. Being decentralised means every user in the network has an up-to-date copy of the digital ledger which makes hacking almost impossible. If a modification is made to any block, the remaining network will reject it, and the altered block will be replaced by the original.
Blockchains help to automate trust. Users do not need to trust records because the network has validated them. Trust is coded into the system for all the network participants. Blockchain essentially removes the fee-charging central intermediary from the equation of trust, hence making it free from bias and corruption. It is a self-governing networked community of strangers, incentivised to manage the blockchain because of the reward it offers- cryptocurrencies.
Satoshi Nakamoto published the Bitcoin whitepaper in 2008, outlining how blockchain technology might be utilised to build a peer-to-peer digital currency. Bitcoin changed the way we think about digital transactions by providing the first safe means of exchanging money over the Internet that did not rely on a third party, but on a decentralised network of cooperative individuals who actively maintain the blockchain.
As the first cryptocurrency, Bitcoin has paved the way for the creation of other useful cryptocurrencies.
Internet of Value and Ownership
Since last year, it seems like everyone has been trying to cash in on the NFT craze, regardless of the fact that a handful of people understand how it works. According to DappRadar, which measures NFT sales across several blockchains, nonfungible token trading reached $17.6 billion in 2021-22, up 21,000 per cent from 2020, which is pretty impressive and unreal.
But, what are NFTs and how are they connected with Web3? NFT is an abbreviation for Non-Fungible Token. When a token’s value is viewed as unique and cannot be substituted by another token, it is non-fungible. NFTs provide verifiable ownership of digital assets, allowing digital commodities to have a functional degree of uniqueness comparable to physical objects.
Now, NFTs liberate artists and consumers from platform monopolies. Previously, anything you uploaded on the internet, for example, on Meta, you unintentionally granted Meta ownership rights in accordance with their terms and conditions. Now that the creators retain ownership, they have control over their ideas and products. Regardless of how far and wide the files are copied and pasted over the internet, their origin and ownership are eternally documented on the blockchain. Such tokenization is already having a significant influence on ownership rights in real estate, art, gaming, and sports collectibles. Hence, to ‘reading and writing’, Web3 adds ‘owning’.
The future of Web3
With the rising popularity of blockchain and cryptocurrency, as well as growing awareness of the flaws in the current monopolistic giants’ business models, Web3 appears to be our inevitable future. But what more does Web 3 have to offer?
Decentralised Applications – Decentralised apps (DApps) are digital applications or programmes that run on a blockchain or peer-to-peer (P2P) network of computers rather than a single centralised server. DApps exist outside of the jurisdiction of a single authority. A developer, for example, can design a Twitter-like DApp and place it on a blockchain where any user can post messages. No one, not even the app’s developers, can erase the messages once they’ve been uploaded. This makes dapps immune to censorship and gives users the ability to secure and own their information. In the instance of transactions, dapps would employ ‘smart contracts’ to settle transactions between two parties. Smart contracts are simply programmes stored on a blockchain that automate transactions when predetermined conditions on the blockchain are met, fulfilling the role of an intermediary.
DAO – All modern firms are centralised, which implies that a small group of individuals make decisions for the whole organisation. Decentralised Autonomous Organisation (DAO) seeks to abolish such localised concentration of authority. DAO is the future vision of organisations on Web3 and it intends to build an entity with no central leadership. Human management would be written out by code that token holders would democratically agree on. Each member would own a portion of the DAO’s assets and have a say in decisions in proportion to their token holdings — as specified by the smart contract. The DAO concept transforms companies into communities and communities into companies.
Web3 blends the decentralised architecture of Web 1.0, the original Internet, with the dynamic and interactive experience of Web 2.0 coupled with user-owned data and transactions backed by cryptography. Web3 has various massive-scale possibilities that might convert the internet into a ubiquitous entity that integrates our physical lives with our online lives completely. With user data ownership and privacy as the fundamental pillars of web3, the tech giants must reconsider their entire business model and cooperate with other decentralised organisations, resulting in a more egalitarian web experience.
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