What is Web3?

By Harry Alford

Web3 is a new wave of platforms and monetization models that will decentralize culture and, ultimately, put Big Tech's hold on the internet under pressure. 

As a long-time believer in the transformative power of crypto and blockchain technology, I've become increasingly excited about how this new wave of decentralized networks will impact industries like culture in the form of art, social media, entertainment, and media. If crypto is the decentralization of finance and government, Web3 is the decentralization of culture and Big Tech.

Web3 is an alternative to the centralized internet many consumers use today, referred to as Web2. Web3 is an ecosystem of decentralized apps (dapps) living on the web and built on new foundations of blockchain technology. Web2 and Web3 apps can run on the same browsers or operating systems, but they're fundamentally different in how they work: to use Web2, you need an app store account, and you must connect your device to the internet; to use Web3, all you need is some access (like WiFi), and your device can be offline for most interactions. 

Web3 is a new vision for the internet and business models for dapps that are fully open source and transparent, giving users complete control over their data. Web3 commerce can happen peer-to-peer rather than through corporate intermediaries. Instead of having your data stored in one place (i.e., in a database), it's distributed across many different nodes. 

One protocol at the center of Web3 technologies is Ethereum, a blockchain-powered network that facilitates the use and creation of dapps. It's also sometimes used to describe the Web3 stack, which represents the layers of software used to create dapps. The Ethereum platform runs smart contracts, which can be used to build dapps that run exactly as programmed without any possibility of censorship, fraud, or third-party interference.In 2021 the ecosystem reached an all-time high of almost 300,000 active developers, according to an Electric Capital Developer Report. Ethereum was among the five (5) largest developer ecosystems alongside Polkadot, Cosmos, Solana, and Bitcoin. There are numerous reasons why developer activity will continue to grow. Below are some ways Web3 developers enable new forms of creative expression to flourish, which has enormous ramifications for the future of culture.

Web3 has been a boon to artists, allowing artists to find a wider audience and earn more for their work through the NFT market. The decentralization of the internet allows artists, musicians, writers, and other creatives to find their audience without relying on gatekeepers like galleries, record labels, or publishers. Earning money right away will make it easier for smaller artists to monetize their work while building up demand through pre-orders or other digital assets that give fans access before release dates. 

In addition, Web3 removes the gatekeepers of 'traditional' culture. In a world where central authorities control the entire art infrastructure, artists are at the mercy of gatekeepers who may or may not pay them for their work. Announced just this month (December 2022), Fleek Network is building a decentralized content and application delivery network that will “supercharge Web3” by guaranteeing consensus, with a reward mechanism, and content addressability to ensure content permanence and censorship resistance.

Web3 and cryptocurrency allow for fair compensation for creators and greater control over how their content is shared and monetized. Artists can now earn money from every aspect of their creations — from streaming revenues to merchandise sales — and they're free to sell directly to fans without having to go through corporate red tape first. And this isn't just limited to well-known artists: on Web3 platforms like Royal, users can invest in the music they love, and the musicians can decide what percentage of their songs' royalties they would like to list for sale.

Web3 brings us a new culture of sharing' small data'. The current internet, Web2, is full of big data. Tech giants collect vast amounts of personal information about you and sell it to advertisers. That's how they make their money. You'll enjoy more privacy online — and less surveillance from outside sources — by using Web3 services that don't need all your information to function properly (like Facebook). This could also be a good thing for brands; if people get used to not giving away as much information about themselves online, they might feel more comfortable interacting with companies directly rather than through third parties. Either way: a win-win situation!

According to web3 Studios, the digital identification market might be worth more than $600B by 2030. Since Web3 is all about decentralization and data privacy, digital identity, particularly self-sovereign identity (SSI), is essential for its implementation. If irresponsible data sharing and unrestricted exploitation for commercial gain typified Web2, Web3 flips that paradigm in favor of giving data owners control over their data. The latter is made feasible by SSI, a technique of identity that focuses information control around the individual, eliminating the need to completely store personal data on a central database.

Ultimately, Web3 will be driven by crypto’s networked collaboration. In a decentralized world, not only is participation open to all, but the incentive structure is designed so that the more human coordination scales, the more everybody succeeds. By breaking away from traditional business models centered around benefiting the corporation, Web3 foretells the possibility of community-centered economies of scale. This collaborative spirit, and its associated incentive mechanisms, attracts some of the most talented and ambitious developers working in technology today, unlocking projects never previously possible. 

Web3 communities like The Graph, an indexing protocol with the largest community of subgraph developers, curators and indexers, drive growth within their respective communities through grants and advocate programs to build dapps and publish open APIs, making data easily accessible and compounding network effects for all projects.

It's hard to imagine the common culture of sharing before the internet. People used to share recipes, music, and videos via cassette tapes, postcards, or even word-of-mouth. Now we have access to a wealth of digital content on our phones, computers, and other devices through digital platforms. So what would happen if no gatekeepers were holding back sharing? What if everyone could freely share their 'small data' without fear of retribution from corporations? The next generation of Web3 products and platforms will decentralize culture and ultimately challenge Big Tech's grip on the internet. The blockchain is a new frontier for culture and developers are leading the way.