Why Is Web3 The Future?

Recently, there has been a growing debate about Web2 vs. Web3, especially with regard to large corporations controlling the ownership of users’ data, which has aroused widespread concern within and outside the industry. USV (Union Square Ventures) co-founder Fred Wilson published an article on his personal website to discuss Web3.

There has been a lot of debate and conversation about Web2 vs. Web3, many of which have dominated the questioning of Web3, but it is good to keep the debate and reasonable doubts alive. But for some Web3 lovers on twitter, it also reminds me of missionaries who try to recruit unbaptized people into their belief system, and frankly, it’s too much for me .

Ultimately, Web3 will have to deliver on its promise, which will also mean that the things it builds can provide new value to society; if this does not happen, then Web3 will also become the panacea that some people ridicule. I believe this will not happen, and the important thing is to judge whether it is good or bad only if it is verified, and it is meaningless to talk about it.

And it all boils down to the database that sits behind the application, and if that database is controlled by a single entity, like some big tech company, then huge market power goes to the owner or administrator of that database.

If the database is a public, truly open system that is not controlled and managed by a single company and is available to all, then such market power cannot be built around data assets.

And, you can already see this effect in the fastest growing areas of Web3, such as decentralized finance (DeFi) has built hundreds of financial applications on Ethereum, they all share the same database, users can access from One app moves to another and keeps their data along with login credentials stored in the wallet at all times.

But until teams build the same experience for a wide range of consumer and business applications, we will continue to have this debate, and the good news is that there are tens of thousands of teams building new things on top of the Web3 stack.

In addition, some of the best entrepreneurs and developers have also joined in, and the above tools are getting better and better, which reminds me of the early days of Web2 from 2001 to 2003. At the time, we were just starting out as a USV, and no one was willing to pay for our business blueprint yet, so we barely raised our first funding. But later, we also proved that the business scenario we described was true, and I believe that Web3 will also this time.

If you want to know more about USV’s views on Web3, you can also read the following: “USV Partners: Combing the Inevitability of Web3 from Internet History”. Author: Albert Wenger, Partner, USV

One of the things that always amazes me is how many people think there is absolutely nothing redeeming about Web3 or crypto. Maybe that’s what they really believe in, maybe it’s an extreme reaction to those Web3 supporters who think Web3 brings true liberalism. And from the beginning I tried to provide a more holistic view pointing out the possible good and bad of Web3, just like my talk at the Blockstack Summit.

Today, however, I want to try to provide a convincing explanation of why the focus on Web3 makes sense, and that requires some storytelling first, and an understanding of the nature of Web3’s disruptive innovation.

This type of innovation as a “disruptive innovation“: an innovation that provides the market with new capabilities and efficient solutions but, in turn, has the potential to disrupt existing markets. Therefore, in the early stage, the innovation may lead to a worse situation in other aspects except that it has a good effect in one dimension, but this dimension will eventually become more and more important, and with the innovation Be widely adopted, and other aspects will gradually start to get better.

Also, an example of a “disruptive innovation” is the personal computer (PC). When the first PCs came out, they were worse than every computer today, they had little memory, little storage, slow CPUs, little software on them, couldn’t multitask, etc.; but they There is also an advantage: it is cheap. And that’s important for people who don’t have computers at all.

But it was also this odd combination that made existing computer makers (shrinking mainframes to minicomputers) ignore the PC. They focus on all the bad parts and ignore the positives, or within the limits of their understanding, they also try to compete by making their products cheaper. But with the exception of IBM, these computer makers never embraced the PC until they went out of business or were bought by other companies.

So far, the blockchain is still a terrible database. It’s slow, requires more storage and computation, and doesn’t have much customer support. But at the same time it also has a completely different dimension: no one entity or one organization can control it, as people try to express this dimension by saying that it is “decentralized”, although it does not work well.

OK, so how is this any different than PCs being cheaper? Because to some people it’s important. Why? Because most of the power that big corporations and governments have comes from the databases they operate and control. For example Facebook can decide who can read and write from their database and who can see which parts of it, and they can change this database individually. As it turns out, it’s also Facebook’s source of power around the world. Right now, many people have rightly seen this power as a problem, but have yet to see how the structure of primitive web technology directly contributes to this extreme centralization.

And it would be useful to go back to the early days of the Internet and see how it got to where it is today. When Tim Berners-Lee invented HTTP (Hypertext Transfer Protocol), he unleashed what we now think of as permissionless distribution, when anyone could create a web page and anyone with a browser Anyone can access it. This was an astonishing breakthrough at the time, because previously almost all publishing had to go through the publisher, who decided what should be published or not. While some complain about the loss, I see this as an opportunity to gain knowledge for many creators and learners who were previously marginalized or shut out entirely.

Additionally, HTTP is a stateless protocol, meaning that there is no memory built directly into the protocol, and thus no concept of a database. So if a user wants to build something like a shopping cart that can hold multiple items, they need to implement data storage somewhere that isn’t part of HTTP itself. And Marc Andreessen and his team at Netscape invented “cookies” to help with this problem, but unfortunately, this mechanism is far inferior to the REST proposed by computer scientist Roy Fielding (Roy Fielding) in the paper many years later. (Representational state transfer, presentation layer state transition) comes elegantly.

Meanwhile, a cookie is a file sent with an HTTP request that can be read and then written by a web server. In the early days, people would write the contents of their shopping carts directly to cookie files, but having these files locally on the client computer meant that people couldn’t start shopping on their desktop at work and then finish it when they got home. As a result, cookies these days often only contain the user ID, with all other database functionality residing on the server.

Thus, all powerful Internet companies are true database providers. Facebook is a database of people’s profiles, contacts of friends, and their status updates, Paypal is a database of people’s account balances, Amazon is a database of SKUs, payment credentials, and purchase history, and Google is a database of web pages and query history. Of course, over time, many competitors to these large companies have been born, but the operational database has always been at the core of their strength, and only they can decide who has the right to read and write to this database and what they can access. which parts of .

In other words: it turns out that unlicensed release is not enough, we also need unlicensed data. Why do we need this? Because we need to avoid being left with just a few big corporations controlling the vast majority of what happens on the internet, which would lead to regulatory distortions in our efforts to correct power imbalances, we need to consolidate power imbalances and know the consequences of not doing so . Comparatively, this is why almost everyone hates the cable companies and electric companies that control them (some of their data).

It’s worth noting that we also didn’t know how to do permission-free until the Bitcoin paper was published. At that time, we had distributed databases, we had federated databases, but all of these were still handled by a small number of entities, such as almost all financial networks, ACH or VISA and so on. We don’t have a protocol to maintain consensus, which means it’s hard to agree on what to put in the database, and it’s hard to decide who is allowed to join the protocol or leave.

It cannot be overemphasized that Web3 is such a transformative innovation. Also to be clear, I’m not saying it will solve all problems, of course not, it will even create new ones. But despite this, permissionless data remains a critical missing piece of the internet, and its absence has led to a massive concentration of power. Therefore, if developed properly and with the right governance, Web3 can provide meaningful power transfer for individuals and communities.

If widely adopted, Web3/crypto technology will start to improve in other ways as well. It will be faster, more efficient, easier and safer to use. Just like the PC was a platform for innovation that never happened to mainframes or minicomputers, Web3 will be a platform for innovation that never came from Facebook, Amazon, Google, etc.

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Puneet Kantiwal

Puneet Kantiwal is an experienced professional in the field of blockchain and cryptocurrency technology. With a strong background in computer science and programming, Puneet Kantiwal has been involved in the crypto space since its early days. He has worked on various projects related to blockchain technology, including the development of smart contracts, decentralized applications, and blockchain-based platforms.

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