An Introduction to Web 3.0, The Technology That Can Revolutionize the Internet and Cloud Computing
Originally published: January 10, 2022
“The truth is no online database will replace your daily newspaper, no CD-ROM can take the place of a competent teacher and no computer network will change the way the government works… Nicholas Negroponte, director of the MIT Media Lab, predicts that we’ll soon buy books and newspapers straight over the Internet. Uh, sure.” — Clifford Stoll for Newsweek on February 26, 1995.
In 1995, only 14% of US adults were connected to the internet. There was no central authority, communication was peer-to-peer, and users had control over the content they published. However over the past two decades, the internet has undergone a mass centralization led by internet giants Google, Amazon, Facebook, and Microsoft. With the emergence of Artificial Intelligence, IoT, social media, and cloud computing, the internet has exploded and the tech giants have become the sole possessors of the platforms on which the internet resides. The centralized internet has contributed to major data privacy concerns, the use of algorithmic biases, censorship of users, and the establishment of a single point of failure for the network.
One of the greatest misconceptions about crypto networks is that they are solely focused on the establishment of digital currencies to compete with the dollar. Much of this confusion stems from the first-ever crypto network, Bitcoin, whose blockchain was designed specifically for this purpose. However, the implications of blockchain are in fact much broader, and the advent of Bitcoin has created an entirely new infrastructure for maintaining and storing data. Much like how AWS provides a framework for web applications, blockchains are the backend infrastructure for crypto applications. Specifically, blockchains provide the structure to support decentralized applications ( dApps) and a decentralized internet, or what many are calling Web 3.0.
The History of the Internet, Web 1.0
While very related, the internet and the web are not the same. The internet is the physical servers, wiring, and connectivity protocols that govern how computers communicate with one another. The internet is simply a network of independent computers that follow Internet Protocol (IP) and Transport Control Protocol (TCP). At its core, the internet was decentralized and was created in the 1960s primarily for academic and military use. It wasn’t until Tim Berners-Lee invented the Web in 1989 that the internet became commercialized. The web is essentially a system of online content that is linked together via hyperlinks and it dramatically simplifies the process of accessing information via the internet. To access a web page, users must provide the exact server location for the content they are requesting, and the web allows for users to quickly access web resources using hyperlinks as opposed to remembering a physical server location. With the creation of the web and web browsers, users got access to applications, such as AOL. These web pages were strictly static/read-only. The internet was not yet interactive. Today, this period in time (~1990s) is now referred to as Web 1.0 in which the network was decentralized and users directly requested content from servers in a peer-to-peer fashion.
Web 2.0 — The Centralized Web and Cloud Computing
Throughout the 1990s, businesses began to develop new software that outpaced the capabilities of open protocols and provided efficient, scalable infrastructure to support the internet. Microsoft released Internet Explorer as a free add-on to its operating system, Google and Yahoo developed search engines, and Stephan Schambach invented the “online shopping cart” which led to mass commercialization of the web. Much to the dislike of internet critics, the number of internet users exploded and by the year 2000, 52% of Americans were online. Software dramatically simplified the process of accessing and navigating the internet, and communication and publication began to flow through a few services that were able to outperform all others. These innovative services were so great that companies like Google, Amazon, and Facebook were able to quickly scale and construct high barriers to entry. The strategy was to gather as many users as possible and worry about monetization another day.
This led to the centralized web, known as Web 2.0 (2000s-present), the period defined by user participation and read, write capabilities. The centralized web brought dynamic web pages, social networks, mobile devices, and much more. However, this innovative software also brought centralization to the web in which a few services dictate user access, communication, and publication. Web 2.0 is best described as services in exchange for user data. Today, the tech giants are under regulatory and public scrutiny for exploiting user data, censoring users, employing algorithmic biases, and building a moat around the cloud computing industry.
Cloud Computing — The Hallmark of Web 2.0
In the late 1990s, Amazon.com began to build data centers across the globe to meet online traffic demands. After years of trial and error and server outages around Christmas time, Amazon perfected extremely efficient cloud infrastructure services. So efficient in fact that Jeff Bezos and Andy Jassy realized they could provide computing services for other companies. This little side business became known as AWS and gave rise to the $275 billion cloud computing industry. AWS currently makes up 32% of the cloud infrastructure market and combined with Microsoft Azure, totals over 53% of the market. Although cloud computing has boosted the efficiency of the internet and allowed for users to scale applications effortlessly, the cloud is ultimately the greatest contributor to the centralized nature of the Web.
Through AWS, Amazon found a way to monetize the original, decentralized internet and effectively built a platform to support the entire network. Jassy himself stated, “if you believe companies will build applications from scratch on top of the infrastructure services if the right selection [of services] existed, and we believed they would if the right selection existed, then the operating system becomes the internet, which is really different from what had been the case for the [previous] 30 years,” In other words, AWS was able to leverage the efficiency of their servers to shift the underlying architecture of the internet to a centralized platform.
On December 7, 2021, Amazon Web Services experienced a major five hour outage. Millions of users and businesses were affected as websites like Netflix, Disney+, Venmo, Delta, and more went down. AWS hosts over 9 million websites and a small bug in its cloud infrastructure can be catastrophic. Furthermore, with Artificial Intelligence and IoT growing at rapid rates, more and more devices are connecting to the internet (Alexa, Sonos, Ring, and even your smart toilets) are now collecting data in your own homes. The security of the cloud is imperative and user data has become an increasingly valuable asset. It is estimated that the cloud computing industry will grow at a 20% CAGR between 2021 and 2028 and will reach a valuation close to $800 billion.
Web 3.0 Poses A Solution to Monopolies and Privacy Concerns
Decentralized, cryptographic networks provide the backend and necessary tools to support a decentralized internet. Blockchains are public, distributed virtual machines that are maintained by a network of validators (independently owned computers that keep track of and update the state of the system). A blockchain is similar to AWS in that it is a virtual computer, but rather than constructed by a network of physical servers owned by Amazon, a blockchain is constructed by a group of independent, anonymous computers. These independent actors (often called validators) constantly communicate to validate and synchronize the records they have stored. Blockchains utilize consensus protocols comprised of cryptographic mechanisms and game theoretic economic incentives to ensure that the bad intentions of anonymous network participants cannot affect the validity of the network. This allows blockchains to run applications and store public, verifiable, immutable information without relying upon a central authority to maintain/update the state of the network.
The beauty in blockchain is that applications that run on these decentralized virtual machines can contain immutable software commitments that users can trust. Take Bitcoin for example, which is a decentralized application that runs on a blockchain and contains software commitments such as how many coins a respective account holds, as well as other facts such as the 21M bitcoin limit. Since the Bitcoin blockchain is decentralized (maintained by a network of independent actors), the software that runs on this network contains these commitments that cannot change without majority network consensus. A centralized virtual machine, such as AWS for example, could never effectively run a digital currency application because users will not trust that the centralized authority. At any moment, AWS could manipulate the software and change the amount of coins in circulation, eliminate users from participating in the network, or a mass server outage could temporarily disable or delete transactions. This idea of decentralization is what makes blockchains the next phase of computing.
The Future of the Web and Cloud Computing
Similar to a database or centralized server, blockchains can run other applications and store other forms of data beyond transaction records. Blockchains, such as the Ethereum Blockchain, store and maintain smart contracts, which are immutable, self-executing software agreements. Smart contracts are similar to “if, else” statements that will self-execute when a set of conditions are met. Like tokens, smart contracts are verified and updated in a decentralized manner which enables anonymous parties to engage in verified agreements without the need for an intermediary. This makes smart contracts entirely different from typical contracts since they cannot be influenced by a higher authority. It is these autonomous, immutable lines of code that provide the building blocks for decentralized applications (dApps). dApps are very similar to software we see today (Netflix, Uber, Chrome, etc.) but instead of relying upon a centralized server, dApps run on blockchain networks. These apps allow users to have complete transparency into the application’s behavior because the data on the blockchain is completely public and users can simply read the contract logic to understand exactly how the application will behave. This allows for users to establish trust with the server and ensure the security of their data.
The idea of Web 3.0 is to leverage blockchain technology to establish a decentralized, peer-to-peer infrastructure in which decentralized applications can interoperate. Web 3.0 is the next reconstruction of the backend of the internet. In the same way that AWS centralized the backend of Web 2.0 by essentially building an OS for the internet to reside upon, Web 3.0 developers are attempting to build a network of blockchain-based protocols to re-establish decentralization but still maintain the efficiency and technologies of Web 2.0. Gavin Wood, co-Founder of Ethereum and creator of Polkadot, described Web 3.0 as “an inclusive set of protocols to provide building blocks for application makers. These building blocks […] present a whole new way of creating applications. These technologies give the user strong and verifiable guarantees about the information they are receiving, what information they are giving away, and what they are paying and what they are receiving in return.”
The goal of Web 3.0 is to maintain the technologies and advancements of Web 2.0 but preserve the openness and decentralized nature of Web 1.0. The decentralized web will be a safer platform for users to transact and communicate without the need for intermediaries. No central party will own the network, nor the data, users will have permissionless entry, there will be no single point of failure (in case of server outage), and through asymmetric encryption, security will be in the hands of users.
The architecture of Web 3.0 is far from complete as the decentralized internet is still under construction. The invention of Ethereum in 2015 paved the way for decentralized applications to emerge. Ethereum envisions an ecosystem in which users can navigate through interoperable decentralized applications which rely upon a token economy and network verifiability of the underlying architecture of web applications. The Ethereum network has its own object-oriented programming language, Solidity, that lets developers utilize smart contract logic to build applications within the Ethereum ecosystem. Other Web 3.0 projects, such as Polkadot and Cosmos, envision a different Web 3.0 and are building towards an internet of blockchains. The idea of these projects is to build a network, or OS, with protocols that allow for distinct blockchains to interoperate. Just as Web 2.0 applications have different compute, storage, and data requirements, the same is true for decentralized applications. A social network, web browser, and a music streaming service all may require a backend with different compute, storage, and data specs. Thus, it is implied that Web 3.0 will be more efficient if applications can be built upon specialized blockchains tailored to their respective needs. The goal of Polkadot and Cosmos is to allow for specialization and efficiency but allow for these blockchains to interact with one another.
Polkadot Ecosystem of Parachains
Cosmos Network — Connecting Blockchains
The Future of The Internet
Between the years 1995 and 2000, the Nasdaq Index rose 400%. Thanks to the decentralized nature of the web, innovation was at an all time high as internet companies, such as Microsoft, Google, Amazon, and Apple were able to develop value-driven software. Over the past 22 years, these companies have become so dominant that the internet is no longer community-owned. Web 3.0 aims to resolve the issues of central authority and reintroduce innovation to the internet. By preserving decentralization and introducing token economics, applications and services in Web 3.0 can be focused on driving value rather than finding ways to monetize and exploit user data. As more of the world goes online, trust in the network has never been more vital. Through blockchain, users can gain data privacy, autonomy, and security.
Originally published at https://www.linkedin.com.
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