This is part 2 on the topic of how the cryptocurrency industry(Web3) will revolutionize and shape many aspects of our society, from healthcare, to daily transactions and digital art. I went over more of the in-depth sectors in this blog here, for this post I’ll be having a more generalized discussion on how and why Web3 will revolutionize the world. Let’s get into it!
The Current World We Live In
In order to understand the importance of Web3, you need to understand the current world we live in. I highly recommend reading my comprehensive guide to Bitcoin here in order to understand money and our historic monetary systems. Apart from money and its role in our world, it’s important to understand that in today’s society there are small groups of people that control most of the world. This might sound fictitious but this power is represented in government and corporations alike. Governments have a monopoly on violence, money and all things policy related. In order to live in a country you need to pay in their designated currency, setup an account with their banks, succumb to their monetary policies and inflation, and overall trust that the government and middlemen you deal with on a daily basis aren’t going to screw you over.
You see we live in a trust based society. Our society is built on promises of things like our food is safe, money secured, our identities are ours and medical records are safe. There isn’t a way to prove any of this, we just have to trust that the third parties(whether it’s corporations, governments or government agencies) will act in good faith. But as history has shown us, this isn’t always the case. The 2008 Financial crisis where corrupt bankers privatized their risky gains but socialized their losses is a prime example of how individual people get screwed over when the few people that control things put themselves first. Later in this post I will explain how blockchain technology looks to solve these issues.
History of the Internet
The internet has been on a rapidly evolving trajectory since its widespread adoption in the 1990s. Web 1.0 was largely a skeleton of what the internet is today, with ecommerce just getting started at the time, the majority of internet use was businesses displaying information for read only use for customers.
Web 2.0 is where the internet really started to grow into what it is today. This is where the internet went from static desktop pages to interactive experiences and users could begin generating their own content. Companies like Facebook, Youtube, Airbnb and Uber are a few notable names to have spawned from this version of the internet.
Web 2.0 is defined by 3 main drivers:
Mobile: The invention of the first Iphone in 2007 launched a mobile revolution where as a society we went from using the internet a few times a day to everybody having 24/7 access right in their pocket.
Cloud: Cloud computing was revolutionary as it allowed companies to move away from building and maintaining their own expensive computing infrastructure and instead outsource this aspect of their business. Now companies rent computer storage, power and business tools as they see fit and these tools scale as their business scales.
Social: The social networks that have spawned from Web 2.0 have reached almost half of the world’s population with 3.6 billion people using social media in 2020. Social networks have changed the way our society operates in many ways, whether it’s the user generated reviews which dictate which products are purchased all the way to individuals renting out their homes(Air bnb) or driving strangers around in their cars(Uber).
Web 2.0 is still underway with mobile, social and cloud constantly evolving. What we’ve seen the past five years is a glimpse at the beginning emergence of Web3. Web3 will be even more drastic of a change from 2.0 than 2.0 was from 1.0. Web3 marks our society’s jump to a permissionless, open and trustless society.
Open: Applications, businesses and webpages alike will be built on open software with an open team of developers in full view of the world. What does all of that mean? Essentially what we’ll have is decentralized projects where access to work on and view the project’s results is a lot more open then if it were through a private company. DAOs are a great example of this.
Trustless: Similar to open, trustless networks are the result of decentralization which allows users on the network to interact and exchange value with one another without a third party middleman.
Permissionless: Individuals can participate in the network without authorization from a middle man/ governing entity.
The result of these 3 defining characteristics is that power will be stripped from the few and given to the masses. Cheap, efficient, and accessible banking will be provided equally to everyone in the world. Data will no longer be centralized within a select few corporations but accessible to all. Middlemen will become obsolete. Blockchain technology will touch every industry as we move from a world of narratives to one where everything is proven. I’ll explain this in greater detail in a later blog post.
The drivers of Web 2.0 was Social, Cloud and Mobile whereas Web 3.0 will be driven by Edge computing, AI and decentralized data networks.
Edge Computing: Edge computing is where the processing and data storage is brought closer to the original source of the data, the edge. Essentially individual computers will process data rather than large centralized data centers.
AI: Artificial intelligence and machine learning algorithms have been growing rapidly in terms of their strength(predictability) and their application. The greatest resource for AI is simply more data. As a world moves into a decentralized data structure model, AI will continue to flourish and grow rapidly.
Decentralized Data Networks: Decentralized data networks like what we see often in the crypto space, will allow individuals to have access to their data and actually own it. No longer are centralized middlemen the ones that control all the data and make the final decisions on what should be done with it.
Web3's Societal Impacts
Now that we’ve discussed the technological aspects of Web 3.0, what does all of this mean for society as a whole? Society evolves when humans collectively agree upon a goal and relentlessly pursue cette goal. With this in mind, let’s examine societies’ progression so we can identify how Web 3.0 will change society.
Pre industrial revolution when societies were made up of small villages, information and value was exchanged between small groups of people within a small geographical area. Because of the small scale of everything within these societies, individuals typically assumed many roles within that society. For example, our hypothetical person Robert, might have been the police officer, farmer, father and fighter.
Moving forward in time, we have a rising population which leads to urbanized cities. With cities you have much larger populations with which you can exchange information and value with, therefore work life exploded. With this came businesses that were able to specialize and grow on a much larger scale.
Web 1.0 and Web 2.0 vastly shrunk the cost and time of exchanging information and value between individuals and with this spawned a truly global economy and businesses. Today, we have technological intermediaries like Facebook, Uber, AIrbnb etc. which allow strangers to interact with one another through these trusted third parties. Issues begin to arise when you look at how dependent we as a society have become on these middlemen and therefore how much power these middlemen have accrued.
The business model of many internet companies is that of a free to use platform where the users of the platform are the “product”. We’ve become so reliant on these platforms that they no longer need to focus on attracting more users but rather on extracting information from their users to fuel the digital advertising industry.
All of this will slowly fade away with Web 3.0. One of the most notable innovations of Web 3.0 is that required trust will be minimized on a global scale and therefore global cooperation will be more seamless and efficient. This systematic change will be seen through global cooperatives and DAOs (decentralized autonomous organizations). This is beneficial because:
- Society will become more efficient as third party intermediaries will become obsolete
- Better privacy and security for companies, individuals and machines alike
- Future proof innovations by removing the ability of central platform eradicating an innovation
- Ownership of data and digital footprints will be possible through digital scarcity and tokenized assets
It should be evident by now that Web 3.0 looks to change how we do everything in society, from restructuring of supply chains, businesses and governments to changing the way we exchange value, data and information. Web 3.0 is the next wave of the internet and its being fuelled by crypto currency ecosystems, many of which won’t see be around longterm but those that are will be worth Trillions. Check out my fundamental analysis of which crypto projects I believe are most likely to succeed here.
Thanks for reading!