I recently wrote an article examining the origins and promises of blockchain and cryptocurrency, asking whether these technologies are really living up to the hype being thrust upon them by industry investors, pundits and insiders.
My conclusion after much research was that blockchain, as a foundational technology, is real and is starting to live up to some of the hype heaped upon it.
While blockchain has mostly been discussed in terms of a few key applications, like cryptocurrency, the value it provides in eliminating trusted intermediaries between individuals and groups is starting to be seen in broader applications.
One of the most talked about buzzwords today in terms of blockchain technology is the term Web 3.0, or Web3. This term and sector are in the midst of great debate right now as to whether it has real validity and utility for consumers or whether it’s a marketing hype machine created by venture capitalists.
So, is Web3 just a buzzword being used to make VCs some bucks by jacking up crypto prices, or is it a real evolution of the internet that people must pay attention to?
From Web 1.0 to Web 2.0
When you hear the term Web3, if you are old enough, it harkens back to the days of Web 1.0 and Web 2.0. In short, for the neophytes, Web 1.0 refers to the period in the development of the internet from about 1991 to 2004 where websites were static HTML pages, and it was mostly consumers buying things from online retailers, like books from Amazon.
Web 2.0 was coined by Darcy DiNucci in 2004 and then popularized by Tim O’Reilly during his first Web 2.0 conference in 2004. They defined Web 2.0 as websites that are more interactive than the old static pages, where user-generated content and collaboration occur in a virtual community.
Web 2.0, like Web3, has its detractors. Most notably, the inventor of the internet, Tim Berners-Lee. In 2006, when asked whether Web 1.0 was connecting computers while Web 2.0 was about connecting people, he replied, “Totally not. Web 1.0 was all about connecting people. It was an interactive space, and I think Web 2.0 is of course a piece of jargon, nobody even knows what it means.
“If Web 2.0 for you is blogs and wikis, then that is people to people. But that was what the Web was supposed to be all along. And in fact, you know, this “Web 2.0,” it means using the standards which have been produced by all these people working on Web 1.0.”
What Is Web 3.0?
The term Web 3.0 was coined by Gavin Wood, co-founder of crypto-firm Ethereum. The concept of Web3 is that the internet evolves into a completely new underlying infrastructure that is based on blockchain technology. The stated hope is it will provide more of a decentralized environment, using token-based economics to perform transactions.
The claim here is that it will make the internet more democratic and take away power from Big Tech, liberating throngs of web users to frolic in a blockchain paradise. Other promises of an internet run on blockchain technology include improved data security, scalability and privacy for users.
But will these promises become reality? Are the people, who seem to be primarily VCs, hyping this concept out of a brilliant vision for a better tomorrow, or a baser emotion called greed?
Will this new decentralized web simply take power from Big Tech and place it into the hands of ruthless VCs, putting data and security at risk to a new group of internet overlords?
Related Article: Understanding Web3’s Supporting Blockchain Technology
Where is all the hype around Web 3.0 coming from? One of the big promoters of this concept is a person with $2.2 billion invested in it, super angel investor Marc Andreessen, co-founder of Netscape and partner of VC firm Andreessen Horowitz. Marc also sits on the board of Facebook/Meta, which tried to launch its own cryptocurrency.
And if one strips out much of the marketing hype, the Web 3.0 discussion is really about crypto, as all the people promoting and supporting Web 3.0 are people who have a large interest in the success and growth of cryptocurrency. And those people want to find a way to legitimize and promote blockchain technology to pave the way for crypto financial success.
Is crypto really a good investment for the average person, not a billionaire hedge fund or VC guy? Skeptics will point to the extreme volatility, while supporters will point to growing valuation and potential profit. Many have compared crypto to a pyramid scheme, where everyone makes money so long as new money keeps getting poured in. Pyramid schemes only work for a period of time before their inevitable collapse.
While supporters of Web3 tend to come from the investment class and supporting media publications, most technology industry insiders paint a less rosy picture of the movement, or marketing push, pending your perspective.
While supporters hail Web3 as a trusted, decentralized version of the internet built on blockchain, many insiders call marketing hype on this.
Jack Dorsey, CEO of Twitter, as well as many others, is suspicious of the amount of VC money that has poured into Web 3.0. As much as $17 billion in VC funding has flowed into cryptocurrency projects in the first half of 2021.
When a user recently tweeted, “There is no web3, only webVC,” Dorsey responded with “True.”
And coming from the editors at The Register, they call Web3 “a myth, a fairy story. It’s what parents tell their kids about at night if they want them to grow up to become economists.”
Blockchain technology watcher and pundit David Gerard told The Register: “Web 3.0 is a marketing buzzword with no technical meaning. It’s a mélange of cryptocurrencies, smart contracts with nigh-magical abilities and NFTs just because they think they can sell some monkeys to morons.”
Stephen Diehl further called Web3 a “vapid marketing campaign that attempts to reframe the public’s negative associations of crypto assets into a false narrative about disruption of legacy tech company hegemony.”
Finally, in November 2021, James Grimmelmann of Cornell University argued that moving the internet toward a blockchain-centric infrastructure would centralize and create even more data collection when compared to the current internet.
Related Article: How Is Web3 Decentralized?
Is It Hip or Hype?
The overwhelming opinion of most industry insiders, who do not have money or stake in crypto, is that Web3 (or Web 3.0), is marketing hype, not hip forward-looking technology.
To be fair, the same arguments were made against Web 2.0 when that was suggested. But this version of the web is much more than just redefining it for discussion or classification; what is being suggested is a new infrastructure based on blockchain.
The problem is, why is that necessary, and does it make sense? Blockchain has great value in applications like crypto and data sharing, but is it the right technology to base the entire internet on?
Or are the guys who are suggesting this have more cynical goals in mind, namely a pump of crypto prices and a place to sell NFTs?