Will the real Web3 please stand up?

If you have been around tech circles, you may have heard the use of the term Web3. Web 1.0 was the read-only web, static websites, while Web 2.0 was the read-write Internet characterised by interactive websites, social media, the cloud, and user-generated content. Web3 is the read-write-own web, and it is often referred to as the decentralized web or semantic web, represents a new generation of internet technologies, it is built on blockchain technology and emphasizes decentralization, privacy, user control, and peer-to-peer interactions. The Ethereum Foundation describes it thus:

“The premise of ‘Web 3.0’ was coined by Ethereum co-founder Gavin Wood shortly after Ethereum launched in 2014. Gavin put into words a solution for a problem that many early crypto adopters felt: the Web required too much trust. That is, most of the Web that people know and use today relies on trusting a handful of private companies to act in the public’s best interests. […] Web3 has become a catch-all term for the vision of a new, better internet. At its core, Web3 uses blockchains, cryptocurrencies, and NFTs to give power back to the users in the form of ownership.”

The core ideas of Web3 are:

• Decentralization: Web3 aims to distribute the control and power of the internet from central authorities (like large tech companies or governments) to individuals and smaller organizations.
• Tokenisation: Ownership mediated through tokens representing everything, from real goods to digital services.
• Trustless and permissionless: According to the Ethereum Foundation, “Web3 operates using incentives and economic mechanisms instead of relying on trusted third-parties”, and “everyone has equal access to participate”.
• Blockchain and Cryptocurrencies: Web3 often utilizes blockchain technology and cryptocurrencies to enable decentralized, trustless transactions and to provide the infrastructure for decentralized applications (dApps).
• Smart Contracts: These are self-executing contracts with the terms of the agreement directly written into lines of code. They allow trusted transactions and agreements to be carried out without the need for a central authority.
• Decentralized Applications (dApps): These are applications that run on a P2P network of computers rather than a single computer.
• Interoperability: Web3 is designed to allow different networks and systems to work together seamlessly. For example, a user’s data and digital assets can be used across multiple dApps.
• User Control: With Web3, users have full control and ownership over their own data, which is a shift from Web 2.0 where large corporations often control user data.
• Privacy and Security: Through cryptographic principles, Web3 aims to provide a more secure and private online environment.

Sounds pretty nice, right? The problem is that the Crypto Winter has not been kind to the Web3 dream, the downturn in cryptocurrency prices have dented the air of inevitability that this technology had, but also meant that the public started to distrust the Web3 space. The optimism that once characterised the space have given way to disappointment and caution.

Venture capital was very important to the whole concept, with various big enterprises pushing the concept and providing financial boost to Web3 startups, but these funds have dried up and moved to the new game in town: artificial intelligence.

The concept of tokenisation, which emerged as a significant trend in the crypto space, has largely disappeared. This phenomenon can be mostly attributed to the collapse of the NFT market and the plummeting prices. Tokenisation, in its glory days, offered the allure of democratising access to various asset classes. However, with the NFT bubble burst, faith in this once revolutionary concept has taken a severe blow.

This downturn is also revealing some inherent problems with many crypto-based products. The marketplace is littered with slow, inefficient products, solutions to non-existent problems, and a prevailing gambling mentality among users and developers alike. The craze that once drove people to pour funds into nascent projects has now come into question, as many of these initiatives have failed to deliver on their promises.

Furthermore, one of the most significant criticisms of NFTs has been their terrible performance in managing rights, a subject that we have covered extensively here. Despite their initial promise, NFTs have been unable to adequately address the complex nuances of digital rights management. This shortcoming has left artists and creators at a loss, as the digital assets they once believed would revolutionize the ownership and monetisation of their works, have largely fallen short. The Crypto Winter, in its harsh reality, has exposed these shortcomings, adding to the general disillusionment with the Web3 space.

So Web3 is over, right? Let’s move on to the next fad…

Not so fast. While I’ve been a vocal Web3 critic, it may be possible to salvage a few core concepts that could prove viable in the future. The first possibility for Web3 could be a resurgence of another buzzword, namely the metaverse. While many people have been declaring the death of the metaverse, Apple’s announcement of the Apple Vision Pro could lend a lease of life to virtual spaces, or more accurately, to augmented reality. Some of the ideas of ownership of digital assets mediated by some sort of cryptographic infrastructure and tokenisation could prove useful.

There is a final aspect that could save Web3, and it is artificial intelligence. An interesting proposal that is contained in the proposed AI Act, as well as in other legislation, is the idea that AI generated works will have to have some sort of marker. This transparency requirement could give a new lease of life to provenance and tokens, it may be useful to use some sort of cryptographic infrastructure to ensure the provenance of a work, be it human or AI generated.

Concluding, Web3 might be dead, and nothing will bring it back from the netherworld. But perhaps a few concepts could survive Web3, particularly some sort of provenance and limited tokenisation.

Who knows, wouldn’t it be ironic if tokens became all of a sudden useful in AI detection? Looks like provenance is back on the menu, boys!