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AAX Web3 Series: The Steady Rise of Web3

In crypto, 2020 is the year DeFi took its position in the spotlight breaking free from the niche and embraced by the wider community. Of course, decentralized finance is not a new concept in crypto as that’s exactly what Bitcoin is: decentralizing money away from institutions and into the hands of every individual. But the recent wave in DeFi applications have pushed the limits of innovation, running protocols on top of protocols to create entirely new business models from decentralized lending, to flash loans, on to streaming payments.

The next frontier is decentralizing the web. The movement is referred to as Web 3.0 and spans every facet of the internet, the role companies play and the power individuals have over their own experience. Let’s take a closer look at what Web 3.0 is all about and what role crypto may play in the evolution of the internet.

The current model of the web

Before we can talk about Web 3.0, it helps to understand the versions that came before it. Web 1.0 is the original internet: a vast network of pages tied together by hyperlinks, interconnected in an intricate mesh of references. Web 2.0 is also called the social web, as it opened up endless channels with user-generated content across social media, forums, blogs and more.

But even though it may seem like the web is everywhere, spread out across the world on different devices, the reality is that the internet is indeed very centralized. When we send information to each other, the data is retrieved and stored on other computers called servers. These servers “serve up” web pages when we request them. Like this very blog article you’re are reading now.

In what seems counterintuitive, no matter how many devices connect to a server at the same time, the server will be in communication with each user separately, but the users don’t communicate directly through each other.

When you send a message on WhatsApp to someone sitting next to you, it doesn’t go directly from phone to phone. It goes through a server that enables your devices to connect to the same service. Even though your phones are likely closer to each other physically, the server will always take a central position in the communication, which is what creates a centralized model of web services.

The problem with a centralized web

The early web was hosted on computers that were owned and operated by the people who created the content. Today, most of the web is hosted on servers belonging to a small group of giant tech companies. While the content itself is much more diverse than it was before, control over the hosting and distribution of that content is more also more concentrated than ever before.

In February 2020, independent analysts reported Amazon’s AWS has over a third of the market at 32.4%, more than Google, Microsoft, IBM and Alibaba combined. This poses a security threat as centralized nodes in a network are single points of failure that can malfunction – purposely or otherwise. As an example, an issue with AWS in 2017 made hundreds of websites in the US including Slack and Quora to become unable to “serve” content.

But then there’s another issue with centralization, perhaps one that’s more important than not being able to ask a question on Quora when you want to. Our experience on the internet is now largely shaped by the agendas of big tech companies.

For example, Facebook and Google are both still not comfortable with anything related to Bitcoin or crypto and getting content through usually results in your account being flagged and at some point, you could even be banned. In December 2019, crypto influencers on YouTube suddenly saw most of their content being deleted for “citing harmful or dangerous content” as the video platform, for apparent no reason, turned its back on longtime crypto celebrities.

The alternative offered by Web 3.0

The third evolution proposes a decentralized alternative, built on a peer-to-peer model. It’s actually a model you may already be familiar with if you know how illegal movie downloads work. Instead of you streaming a movie from Netflix that serves up content from an AWS server, you would be downloading files directly from other computers in the network. In that process, you might be connected to 100 different “peer” computers each of which send you data. If a few go offline, you are still able to download the data from the other peers that are online.

It’s this principle of direct peer-to-peer networks that is applied to websites and web applications in de decentralized web. As a user, you would receive a copy of a website you visit, which is then seeded to other users visiting the same site as you, who in their turn seed the site to others as well. In this peer-to-peer model, the more people visit a site, the greater the capacity to serve new users, reducing reliance on a few centralized players.

The decentralized model can be applied to any part of the web ecosystem, including web hosting, storage, domain name systems, applications and search functions. As an example, decentralized storage has for a long time been top of mind in the crypto space, with known players being MaidSafeCoin and Storj. The idea is that users store data the same way they would today using Dropbox or Google Drive, but in the backend there is actually a distributed network where the data is stored. Interestingly, anyone can become a storage provider and contribute storage space to the network.

In that scenario, it would be considerably harder for any one centralized institution to stop or control information flow on the internet. And any agent that wants to scoop up and analyze user data, would no longer have a single source to mine but instead the data would need to be retrieved from potentially millions of storage locations – and sifted through IP packet by IP packet.

With that, web 3.0 restores the imbalance of the current centralized web and puts the power of information distribution back in the hands of the individual. The way early pioneers had envisioned the internet.

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