NGI Pointer Project
Key people: Sergio Carrasco
If you are reading this, it means that you share or at least are interested in the evolution of the internet as we know it.
During the previous NGI Pointer posts we have talked about and presented projects that work in this line, providing solutions and technologies that contribute to this evolution, but perhaps more importantly, generating questions and debate around why it should change, and which direction it should take.
Today we deal with a topic aligned with this idea and that lies at the very heart of the current change on the Internet: the Web3.
The origin of the concept is attributed to Gavin Wood, one of the co-founders of Ethereum, the second most used blockchain protocol in the world. This technology is what supports the foundations of Web3.
To shed light on this topic, we talked to Sergio Carrasco, IT Lawyer, Engineer and entrepreneur specialized in GDPR, blockchain, cybersecurity and intellectual property.
Let’s start from the beginning: what is Web3 and, perhaps more importantly, what are Web1 and Web2?
The first web pages, what we would call Web1, consisted of static pages with unidirectionality of information where the user related to the information in a more passive way. From the structural point of view behind Web1 we find a decentralized ecosystem, where each creator hosted his website on his private server.
Later, in Web2, the content creator/consumer relationship changed to involve the user and allow them to generate content on social networks and platforms, the so-called user-generated content. This change is accompanied by the centralization of resources with large technology corporations providing services such as hosting on servers or recently cloud services. And with centralization comes the chance (and maybe temptation) to control said content and resources.
Amazon, Microsoft and Google currently lead the cloud data storage market. The first, with its subsidiary AWS, controls 41.5% of the total, according to McAfee data from 2019. It is followed by Microsoft’s Azure, with 29.4%, and Google Cloud, with 3%.
These three companies have half of the 600 large data centres globally, according to a report by Synergy Research Group.
For its part, the Web3 concept represents a new iteration of the World Wide Web concept in which the decentralization of resources and content regains centre stage, trying to avoid the concentration of content and resources in the hands of a few multinational corporations. Web3 will allow information to be distributed in copies located at different points on the network, making it virtually impossible to control. For this, blockchain technology is the key element responsible for its distribution.
Web3 aims to decentralize the web, avoiding the concentration of power and control, in which blockchain plays a key role
It is not surprising that this decentralized ecosystem is supported by open-source initiatives. In Sergio’s opinion, users tend more and more to request access to the Source Code of the applications they access, generating a trend that enables transparency, but also the development of other solutions and projects based on current proposals (what is known as a fork).
Ok, but is there currently a website that meets the criteria of Web3?
The shift from Web2 to Web3 has not happened yet, furthermore, Web3 is just getting started. It is a long process, as it was in the transition from Web1 to Web2.
According to Sergio, the concept is booming right now. The foundations of Web3 are being built in this very moment: what it consists of and where the interest is moving to. The first tests are being done with flat content and marketplaces (as an element that generates interest and attracts capital from investors).
Elon Musk himself posted a few months ago one of his typically controversial tweets on the subject, wondering if anyone had seen Web3.
The foundations of Web3 are being built in this very moment
Some of the first initiatives framed in the Web3 universe could be the Dfinity Foundation trying to replace the cloud computing industry with its blockchain-based Internet Computing and creating a new generation of applications. Or Unstoppable Domains with their NFT domains.
Another of the most interesting initiatives is that of Permaweb by Arweave. It is a hosting service without servers, based on a decentralized network that connects users with available space on their hard drives with users who are looking for that space to store content permanently.
As we can see, all the elements of Web2 find their replica in Web3 but adding the key concept: “decentralization”.
Ecosystem behind the Web3
In addition to technology and application developers, the Web3 ecosystem is completed with other agents, especially those related to investment.
According to FORBES, during 2021 we have witnessed a large injection of capital into the Web3 ecosystem, in the form of support for blockchain projects. These projects raised almost $ 30,000 M, with an increase in the average ticket in seed investment from $ 1.5 M in 2020 to $ 3.3 M in 2021.
The main players in the investment ecosystem of Web3 are both new fund managers such as a16z or Paradigm that have raised funds worth 5,000M dollars, as well as worldwide funds such as Tiger and Sequoia that are entering the market very aggressively.
But as in every technological revolution, the new paradigm does not impose itself. Several drawbacks are yet to be overcome for Web3 to take off, such as the current efficiency of using high-cost blockchains to host websites and their elements. Something that is aggravated by the speculation around cryptocurrencies and blockchains.
On the other hand, there is the issue with trust in the network of nodes that guarantees decentralization. If that trust is lost, the value of the blockchain crumbles. Cases such as the rollback of Ethereum or the need to develop a proof of value on top of the proof of work are a sign that decentralization can be a system with gaps such as the current one of third-trusted parties.
In short, for Sergio Carrasco we are witnessing the flight of the Wright brothers for Web3, where few users can really benefit from Web3 except in specific use cases such as those in which the transmission, trust and veracity of the information are currently in question.
We are witnessing the birth and boom of the Web3, the Wright’s flight of our era.
From NGI Pointer we look forward to the take-off of this trend. In the meanwhile, we thank Sergio for his time to assist us.