On July 11, the European Commission announced it had thrown its hat into the ring to become “a world leader in Web 4.0 and virtual worlds.” The commission’s goal is to steer the new technological transition and “ensure secure, trustworthy, fair and inclusive empowerment for citizens, businesses and public administrations.”
This lofty aim has not received universal acclaim, with some suggesting that the EU putting its substantial weight behind Web 4.0 is a misstep because its predecessor, Web 3.0, still has not delivered on its promises.
However, this somewhat pessimistic reading of Web 3.0 ignores some of the exciting work and applications currently in development or already deployed, not least on a scalable public blockchain like the BSV blockchain.
What is Web 3 and Web4
Web 3.0 essentially describes the evolution of the World Wide Web from the user-generated content of Web 2.0 to a space powered by artificial intelligence (AI) and Big Data, and incorporating concepts such as decentralization, blockchain technologies, and token-based economics.
Despite the fact the Web 3.0 is still being developed, Web 4.0, the fourth generation of the World Wide Web, is already gaining traction.
This next phase is characterized by a more collaborative and interactive approach to web development, and a blurring of the lines between user and Web. Web 4.0 applications are designed to be more user-friendly and allow users to easily share information and ideas, some of the most popular applications being social networking sites, blogs, wikis, and video-sharing sites, as well as ideas around virtual spaces and metaverses.
This evolution was summed up by the EU when it announced its Web 4.0 strategy:
“Beyond the currently developing third generation of the internet, Web 3.0, whose main features are openness, decentralisation, and user full empowerment, the next generation, Web 4.0, will allow an integration between digital and real objects and environments, and enhanced interactions between humans and machines.”
But before going on all in on Web 4.0, does the EU need to consider carefully the alleged failures of Web 3.0?
Addressing the critique of Web 3.0
A major criticism focuses on the relatively poor uptake by major financial players of any blockchain other than BTC, pointing a particular accusing finger at the second most widely circulated digital asset, Ethereum.
This criticism seems to miss the key point that Ethereum, and BTC, are both unscalable blockchains, and thus by definition cannot achieve the promise of Web 3.0 because they cannot incorporate enough transactions per block to support a fully digital token-based economy.
BTC has a block limit of 1MB, so miners are incentivised to use this limited space for larger transactions with big juicy fees attached to them because of the cost in energy and computational power of the mining process.
Ethereum has a similar problem but for different reasons. Under the proof-of-stake system used by Ethereum, validators are chosen based on the number of staked coins they have. Validators are required to pay a “gas fee” to successfully conduct a transaction or execute a contract on the Ethereum blockchain platform. The exact price of the gas is determined by supply, demand, and network capacity at the time of the transaction.
This has resulted in complaints about high network and gas fees, making it difficult to justify using the platform for smaller transactions.
Due to this fact, Ethereum and BTC could not effectively or affordably incorporate microtransaction in their current state, restricting their use to the domain of big finance and asset speculation.
The BSV blockchain, on the other hand, is almost infinitely scalable, only this March BSV ecosystem member mintBlue, the Blockchain-as-a-Service (BaaS) platform, broke the Proof-of-Work world record with over 50 million transactions.
Over the course of a day on March 15, 2023, the platform processed 18GB of data, at a minimal cost of $325, registering 91% of all transactions across all major blockchains (BitInfoCharts), whilst also being the greenest provider, according to the mintBlue Blockchain Sustainability Index.
“This ground-breaking milestone showcases the immense potential of public blockchains in facilitating large-scale deployments of use cases centred around data ownership, transparency, storage, and authentication,” said the company’s press release at the time.
The ability to handle many, in quantity and variety, transactions per block means the BSV blockchain, or any equally scalable blockchain, could potentially sustain a token-based economy, and may still do so.
“The global virtual world market size is estimated to grow from €27 billion in 2022 to over €800 billion by 2030,” said the EU on July 11, when unveiling its Web 4.0 strategy.
“The virtual worlds are persistent, they continue to function even if you do not interact with them. They are in 3D, immersive environments, which make it possible to blend physical and digital worlds in real time, for a variety of purposes such as designing, making simulations, collaborating, learning, socialising, making transactions or providing entertainment.”
Such a broad virtual world and virtual economy, with its diverse citizenship, consumers, businesses and transactions simply could not be facilitated by blockchains such as BTC or Ethereum, whose block limits and mining processes do not incentivise the inclusion of small transactions.
However, if an economy this size was to move into the virtual space, a digital currency such as BSV could provide the scaffolding needed to maintain it.
Digital twinning and Web 4.0
The BSV blockchain can also provide a valuable use case for a key application of Web 4.0, known as digital twinning.
Digital twinning is a process in which a physical object, system or a being is recreated on a virtual interface. As described by IBM, “a digital twin is a virtual representation of an object or system that spans its lifecycle, is updated from real-time data, and uses simulation, machine learning and reasoning to help decision making.”
This complex interaction between the physical and virtual is the essence of Web 4.0, and if the EU is to make a success of its Web 4.0 strategy it will need to get on board with the idea of digital twinning.
Despite its strong presence in the physical world of manufacturing and exporting of goods, the EU has been criticized as lagging behind international peers, notably the U.S. and China, in the virtual spaces that make up the other half of the Web 4.0 equation.
One way to catch up may be to utilize the potential of BSV blockchain to support the creation of digital twins, and an application already doing just that is Trace.
Created jointly by IBM and Gate2Chain, Trace is a blockchain-powered platform that facilitates the creation and tracking of digital twins across entire supply and distribution chains.
“Our primary objective is to solve everyday problems for real-world businesses and simplify the integration of blockchain technologies into business processes,” explained Jessica Jaume, operations and business development manager at Gate2Chain, speaking at London Blockchain Conference in June.
Trace is easily accessible and available, requiring no native tokens and no miner fees.
The advantages that such an application could provide to a 27-State trading bloc are myriad: supply and distribution chains could be protected from counterfeit goods and theft; a digital twin secured by the immutability of the blockchain would allow physical items to be managed more transparently; customers could verify a product’s source and authenticity across its lifecycle; and if an item with a digital twin got stolen, it could be marked as such and subsequent utility to the thief reduced.
The EU’s Web 4.0 strategy could prove itself a smart horse to back, but if the Commission wants to increase its odds of success it could do worse than look to BSV blockchain and its applications.
Watch: Putting the world on chain with Trace, by IBM and Gate2Chain
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