Blockchain technology will drive “Web 3” and return power to ordinary internet users. Or, so goes the claim we’ve heard hundreds of times lately. How likely is this to happen? The answer isn’t simple, but one thing is certain: Web3 will need to exist on the right blockchain network to deliver on its promises. That blockchain would have to be proven over a long period of time, it must have a stable and secure protocol, and it must be trusted. BSV is all those things—however, a lot also depends on the people who build the Web3 services people use. Can we rely on them to deliver the online functions humanity needs?
“Web3” is a term credited to Polkadot (DOT) creator and Ethereum co-founder Gavin Wood. It refers to online technologies presumably based on decentralized blockchain networks where users own their data and can control levels of access to that data. Access to services, ownership of items, and privacy levels could be based on tokenized assets and membership buy-ins. Control and governance of the services themselves may be decentralized and managed by independent bodies or DAOs.
CNBC interviewed Wood and other Web3 proponents in a recent short video looking at the hype. Web3, it says, follows from the static internet of the 1990s (Web 1.0) and “Web 2.0,” which emerged with user-based content creation networks like Facebook, Twitter, and YouTube. While Web3 offers similar promises of user participation to Web 2.0, it alters the rules pertaining to data ownership and control.
“Critics say it’s become too centralized, with power concentrated in the hands of a few big tech companies,” the video says. While terms like “Web3” and “the Metaverse” are still hazy concepts, they come with an implicit promise that next-generation online services will offer something different. Maybe.
The big players and their opinions
Bertrand Perez of the Web3 Foundation offers the most grounded assessment of Web3’s realities and potential. He drops the now-familiar slogan of “if the service is free, then you are the product” you upload your content and personal data to cost-free centralized services, which in turn target you with advertising and build complex data models based on users’ personalities and online activities. Few fully understand how these models are used to manipulate our behavior online and offline, but it’s safe to say this goes far beyond mere marketing.
As well as the privacy intrusion, there’s the issue of censorship. Thousands of users over the past decade have had their Web 2.0 service accounts removed (along with all their data) simply for expressing opinions considered contrary to those held by service platform owners, their employees, and their political controllers.
Web 3 isn’t without its detractors, as the video notes. Entrepreneur Elon Musk has said Web3 “sounds like more marketing buzzword than reality right now,” while Twitter Co-founder Jack Dorsey (who has a complex history with censorship and privacy on his own platform) has noted that most Web3 companies are backed by the same venture capitalists that brought us Web 2.0. The implication here is that (a) their primary motivation is still the return on their investments; and (b) Web3 services will be beholden to the same external pressures that control Web 2.0.
“Not all blockchains are equal,” Perez says. “Some of them are really pure speculation. They’re not building for the long-term, they just want to—as we say—pump and dump. They key is in how much the VCs are taking on the governance of the project,” he added.
Perez notes that future services could be owned by DAOs rather than individuals or companies, owned by users and stakeholders. He also (correctly) points out that NFTs should be more than speculative assets and should instead be digital representatives of item ownership and access rights.
Getting the ‘blockchain’ part right
CNBC mentions that most current Web 3 offerings run on Ethereum, while others choose proof-of-stake “next generation blockchain” networks like Polkadot and Algorand (ALGO). BTC, which cannot handle data in anything but tiny volumes, is rarely mentioned as a Web3 base despite its 13-year existence.
Unfortunately, it’s now a common mainstream belief that proof-of-work (PoW) blockchains like Bitcoin and current-day Ethereum are inefficient and unable to scale to handle large quantities of data. BSV, with its original and “set-in-stone” PoW Bitcoin protocol, has proved this to be incorrect—a PoW blockchain can process and verify any amount of data and becomes more energy-efficient the more it’s used. So far, though, BSV has faced an uphill struggle in its attempts to communicate this reality to the wider world.
BSV presents the potential for new economic models online. With its ability to handle micro-and even nano-payments, users can pay for access to networks with barely-noticeable payments per function. Twetch and Relica are two examples of this: it’s a few cents to like, follow or comment, and creators receive most of the payment rewards. Neither service requires advertising to turn a profit, and users maintain ownership of their content.
Why would users actually want Web3?
One challenge is whether most users will warm to these new models. While most by now are accustomed to social networks being cost-free (at least on the surface), many are also frustrated by the lack of financial returns for their efforts. Even ordinary users have relied on marketing and advertising to turn social media popularity into real profit. This offers them a decreasing share of a shrinking pie due to competition saturation.
There are other challenges. Are Web 2.0’s data privacy and ownership problems technology-based, audience-based, or socio-political? Developers have long considered these issues, and several non-blockchain social networks already exist—along with several blockchain-based ones. Anyone can already create their own social networks based on technologies like Mastodon and Fediverse.
On the whole, though, millions of users still trust centralized services like Facebook and Twitter, thanks to network effect and ease of use. For example, content creators will still aim to be popular on YouTube or Twitter than on alternate services offering greater control because YouTube and Twitter offer them the largest potential audience.
External pressures for data control
Socio-political pressures that favor privacy violations and censorship are a contentious issue—sometimes dismissed as “conspiracy theories,” it’s hard to rationalize an objective argument that they aren’t present. Jack Dorsey, for all his flip-flopping on the matter, is well aware that Twitter faces non-financial pressure to present an establishment-friendly consensus. Elon Musk, through his efforts to purchase 100% of Twitter’s shares, has also faced a barrage of sudden media criticism for his support of free speech, along with a realization that a considerable percentage of Twitter’s “user content” is not organic.
Blockchain technology and new online economics will not solve all these problems by themselves. However, they have a far better chance of solving them by existing than not existing. And for Web 3 platforms to overcome the “latest internet fad” image, they should be based on solid, trustworthy blockchains. “Original and set-in-stone protocol” should carry more weight than “next-gen blockchain.” Proof-of-stake is far from proven as a trustworthy way to secure data, but proof-of-work proponents must also present this argument in a more mainstream-friendly way.
As Bitcoin creator Dr. Craig S. Wright has said in the past, technology is for solving technological problems, while humans must solve socio-political ones themselves. The two must ultimately work in tandem. Web3 is not a silver bullet, but it’s still a powerful tool. The better Web3’s services are, and the more benefits they deliver to users, the more popular they’ll become in the future.
Watch: The BSV Global Blockchain Convention, Web3 and BSV Blockchain
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