The development of Web 3.0, a decentralized version of Web 2.0, looks to address the failures of a digital infrastructure that currently depends on Big Tech, profits from Big Data harvesting and is plagued with poor security protocols. While advocates look forward to a system that would ideally put end-users in a greater bargaining position, tech leaders’ question its underlying premise of decentralization.
In theory, the decentralized blockchain model would cut out Big Tech as acting middlemen, which currently allows users to navigate and upload content to the internet in exchange for their personal data. In other words, the internet would not be owned or controlled by central gatekeepers like Google, YouTube and Facebook (Meta) that currently monopolize this sphere. Instead of relying on the “free tools” of these platforms, users can become direct participants and shareholders by earning tokens on blockchain, effectively diverting power back to users.
At its core, proponents claim that Web3 has the potential to address Big Tech’s supremacy, improve privacy and data security while simplifying scalability. Critics, which among them include tech leaders such as Jack Dorsey and Elon Musk, question if Web3 will be able to live up to its main desired function: decentralization. For Dorsey, Web 3.0 is another “centralized entity with a different label.”
The concept of a decentralized internet is not new, it is an initiative that has been slowly scaled over the last decade as evidenced by the proliferation of cryptocurrencies and blockchain applications like non-fungible tokens (NFTs) and decentralized finance (DeFi). Building a fully decentralized system has never been done before and is incredibly difficult according to Úrsula O’Kuinghttons, Director of Public Relations, Parity Technologies.
“Centrali[zed] systems are easier to build but less transparent. Some blockchain hybrids are a combination of centraliz[ed] and decentrali[zed] systems, but creating 100 percent decentrali[zed] tools is the hardest and the longest part. But this is what Web 3.0 is truly about,” she told Euronews Next.
As envisioned, it will be years before Web 3.0 is ready for commercial use, but this has not stopped companies and venture capitalists from investing. This is where Dorsey’s criticism lies. Even if this new infrastructure minimized the power Big Tech has wielded to influence the market, Web 3.0 software developers and venture investors would become the new beneficiaries.
VC funding for cryptocurrency and blockchain was US$30 billion in 3Q21, up 445.5 percent year-on-year according to data from PitchBook. This superheated market has impelled deals to range from a base of low millions to well over US$1 billion. “The crypto industry is seeing funding levels beyond what 2020 totaled, within half or two-thirds of the time,” Imran Khan, Partner, Volt Capital, told Blockworks.