What is Web 3.0 and Why Should You Care?Apr 02, 2021
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What is Web 3.0 (Web3)? It’s a popular term in the world of blockchain and decentralized technology, but is it just a buzzword, or is it something we should be paying attention to?
Matt and I spoke with Mason Nystrom, research analyst at Messari, about what Web 3.0 is all about, what it means for the internet, and where he thinks things are headed over the next few years.
History of the Internet
The internet, in its early days, was all about freedom, decentralization, and sharing ideas. These early principles injected the internet with a feeling of hope and excitement. This was something entirely new, a brand new project that existed outside of the institutions and power structures that had always governed our lives.
Over time, things changed. Today’s internet is much more centralized, with big corporations like Google, Facebook, and Amazon controlling large swathes of the online landscape and making it close to impossible for smaller projects to challenge them.
How could decentralized technology like blockchain change that?
What is Web 3.0, and is it Better?
Mason defines Web3 as “the trend of democratizing the internet.”
It will involve all of the existing protocols and services we see on today’s internet, but they’ll be built on permissionless blockchains with open protocols and open standards. This will allow for a much greater level of freedom, decentralization, and democracy for individual users, content creators, and projects.
Right now, we’re still building out the infrastructure. The technologies that will serve as the foundations for Web3— blockchain, cryptocurrency, smart contracts, and more — are still growing and taking shape. But the future looks promising.
Why Does Web 3.0 Matter?
One reason Web 3.0 is such an important concept is because it gives individuals ownership and control over the content they create.
Today’s online platforms are built on the backs of individual content creators, like YouTubers, artists on Spotify, and writers on Medium.
Even though these platforms have become fantastically wealthy from this content, the creators themselves aren’t rewarded proportionally. They’re forced to rely on the platforms to reach their audiences, but they don’t receive fair compensation for the value they create.
Web 3.0 allows for much fairer rewarding of content creators, as we’ll explore later in the article.
Another issue is the centralization of data. When our data is controlled by a few centralized organizations like social media platforms, it’s hard for innovation to take place because it’s incredibly difficult for new startups to compete with these incumbent forces.
Additionally, these tech giants may abuse users’ data, violating privacy expectations. Our data should belong to us, and we should get to decide who uses it and makes money from it.
Finally, there are many corners of the internet that are widely used and beloved by all, but poorly monetized. These are known as “internet treasures” and include sites like Reddit, Stack Overflow, and Wikipedia. Web3 and cryptocurrency open up many new avenues to monetize these platforms and ensure we get to benefit from them for a long time to come.
Crypto-enabled Content Platforms
How do content creators make money from what they produce?
Right now, artists’ early work is often very valuable, but they sell it at a massive discount in the early days. This is because as you build a brand and a name, your previous work grows in value. Just look at the early albums of major musical artists — they typically generate a lot more revenue now than they did at the start.
Crypto helps solve this by allowing artists to ascribe a digital representation (like a Non-Fungible Token) to each piece of digital art. They can sell their art as an NFT and collect a royalty on it for the lifetime of the art. Every time it’s sold, the artist gets a cut.
For musicians, moving away from big centralized platforms can have an enormous impact. Mason talks about the possibility for musicians to make 100x more than what they did on the platforms, simply by going directly to consumers.
The Timeline For Web 3.0
Right now, Web 3.0 is still in a speculative phase in many ways. There’s a lot of hype around cryptocurrencies and NFTs, and Mason believes this will return to more clear-headed levels at some point in the not-too-distant future.
In the long-term, Mason talks about the overarching goal for global systems to run on permissionless blockchain networks. The next few years hold the potential for massive growth in this area as the infrastructure starts to really take shape.
Advancing Web 3.0
Advancing Web 3.0 is Nystrom’s newsletter, a manifesto for the decentralized web and how it has the potential to change everything we do online. It talks about how Web 3.0 works, why it’s so important, and how this impacts startups and venture capital. You can check it out here.
One of the best ways to stay up to date on developments in Web 3.0 and learn more is by trying it out for yourself. Snag YourName.crypto while you can, and try sending some crypto to friends or family, building a decentralized website using one of our free templates, or even testing out how an NFT auction works on OpenSea.
For regular discussions about all things related to Web 3.0, decentralization, cryptocurrency, blockchain, and much more, tune into The Unstoppable Podcast.