Remember when companies like Google, Amazon, eBay, and Facebook were huge disruptors in their industries? They upended their competitors in online search, book sales, reselling, and social networking. Now, these Web 1.0 and Web 2.0 companies are on the verge of being disrupted themselves by the emergence of Web 3.0.
The Evolution of the Web
Web 1.0 was the early days of the Internet. Dial-up modems screeched and clanged. We got online using AOL or CompuServe. Games came on CD-ROM. Ask Jeeves was a cutting-edge research tool.
Web 2.0 let us share our thoughts with the world through Tripod and LiveJournal, and later, Blogger, WordPress and Medium. It heralded the rise of virtual social networks through AIM, Yahoo, Friendster, and Myspace. Broadband replaced dial-up, Wikipedia supplanted print encyclopedias, and YouTube shouldered out VHS tapes and homemade DVDs. We stopped using our phone lines for internet service and started using internet service for our phones via Skype, Google Hangouts, and GoToMeeting.
Now, Web 3.0 is on the horizon — or rather, it’s here, but most people don’t know it yet. It’s not integrated into our lives in the way so many Web 2.0 services are because its killer apps haven’t emerged. But they’re coming.
The Many Promises of Web 3.0
Web 3.0 uses blockchain technology to give control of the internet to individual users, as opposed to the huge corporations that became dominant in the Web 2.0 era. Web 3.0 can’t help us claw back all the personal information we’ve already exposed to Facebook and Alphabet and Equifax and had sold to advertisers and hacked by thieves behind our backs, without our permission, and without compensation. But going forward, it can change what we share, with whom, and how while allowing us to protect that data from the prying eyes of companies and governments and decide how and when to monetize it. Ethereum cofounder Gavin Wood calls Web 3.0 a “secure social operating system.”
Reliability, Decentralization, and Censorship Resistance
Web 3.0 also uses blockchain technology to create a more reliable internet. True, we can almost always access all the websites and apps we take for granted to get through the day. But as events such as the October 2016 distributed denial of service attack that seriously interrupted major online services including Twitter, Netflix, Spotify, Airbnb, Reddit, and the New York Times have shown, Web 2.0 platforms’ reliance on central servers means hackers can take them down all to easily. Blockchain technology, by contrast, relies on a worldwide network of distributed computers, each with a copy of the entire blockchain’s data. The cost to take down the Bitcoin blockchain, for example, is almost insurmountably high, and that’s by design.
Web 3.0 also gets rid of centralized middlemen. It allows direct peer-to-peer transactions through distributed apps running on a distributed ledger. It uses technology that allows us to safely interact with anonymous strangers we have no reason to trust without relying on an intermediary institution to facilitate that trust. The technology eliminates the need for traditional models of trust. Without intermediaries, fewer parties have access to our data and transaction costs go down. The transaction fees paid to blockchain miners and validators for Web 3.0 services look to be dramatically lower than the fees consumers now pay to notaries, lawyers, escrow services, and other intermediaries in real estate transactions, for example.
Blockchains are censorship resistant, too. China infamously exerts intense government control over our current Web 2.0-dominated internet. But through the blockchain, China’s citizens could “side-step centralized organizations” and publish work “quickly and securely, without any third party control or regulations,” writes Forbes contributor Matej Michalko.
Let’s take a look at a few of the Web 3.0 services that aim to disrupt the web’s original disruptors.
Steemit vs. Facebook
Instead of sharing and commenting on content for free via a third party that mines and monetizes your personal data and uses proprietary algorithms to decide who actually sees what you share, Steemit aims to provide a social news service where users get paid to upvote, comment, and post and content creators earn reputation-based rewards.
Status vs. Facebook Messenger
Status, available in alpha release on both Android and iOS, aims to connect everyday users to blockchain-based distributed apps (dapps) with an easy-to-use browser and messaging system. The service should provide greater privacy than existing messaging apps, such as Facebook Messenger. It also allows users to securely exchange cryptocurrency.
DTube vs. YouTube
With an interface that looks remarkably like that of its predecessor, blockchain-based DTube aims to unseat YouTube from its video-sharing throne. This decentralized, censorship-resistant video platform runs on the STEEM blockchain. It eschews ads and, like Steemit, community votes determine who gets paid.
Ripple vs. Western Union and MoneyGram
Companies like Western Union (founded in 1851) and Money Gram (founded in 1940) have complicated fee structures. They vary widely depending on where transactions originate, where they go, and what form they take. Additionally, these companies pay huge overhead to operate thousands of physical locations with tens of thousands of on-site agents. While they do have mobile apps that facilitate payments, they can’t compete with the ability to send Ripple’s cryptocurrency, XRP, with almost no transaction fees. Cryptocurrencies built on blockchain technology can be sent nearly instantly, even in huge amounts, as Ripple recently demonstrated on the Ellen DeGeneres show by donating $4 million worth of XRP to her wildlife fund. It’s even faster than BitPesa, a cheaper and faster alternative to Western Union and MoneyGram that’s popular for transmitting money (including Bitcoin) via mobile device to, from, and among African companies.
Storj vs. Dropbox and Google Drive
When it comes to cloud storage, decentralization means making use of underutilized hard drive space around the world and compensating the providers of that space in cryptocurrency. It also means users might pay as little as 1% of their current fees for equivalent storage space. Another advantage is storage on demand, rather than purchases of large predefined “lots” of storage. Transfer and retrieval speed could improve as well. Web 3.0 cloud storage offers superior privacy, with lower vulnerability to hackers and government snoops. Files are stored in small pieces across multiple hard drives so that only the owner has a complete copy. While Web 2.0 cloud storage encrypts files during transfer and storage, it also keeps them on vulnerable centralized servers. There are also questions about how your data is used for advertising.
The Bottom Line
Amazon once nearly obliterated traditional brick-and-mortar bookstores. Now, they’re bringing them back in a new and different way. In the same vein, web 3.0 technology is dismantling and replacing web 2.0 infrastructure. The transition will be gradual and will pick up speed as time goes on; it won’t happen overnight. Decentralized apps have become easier to build in the years since Ethereum was launched; they will become easier to use as the technology continues to develop, as more people adopt them and network effects increase their usefulness, and as blockchain transactions become faster.
The information in this article is for informational and educational purposes only. Investing in ICOs, cryptocurrencies or tokens is highly speculative, and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.