How Blockchain, Smart Contracts, and Tokens Provide the Architecture for a New Form of Internet
Blockchain technology has grown far beyond the scope of securing the Bitcoin network. While most of the focus remains on the use of the technology to facilitate payments, remittances or other types of online transactions, it could be an indicator for other concepts.
Instead of representing a means to transact on the internet, blockchain technology could represent the future of the internet. Combined with other technologies such as smart contracts, it could turn how the world perceives the internet on its head.
Web3 — A Blockchain-Based internet
Web3 is a growing idea about the next generation of the internet. Its proponents state that Web1 was the first alliteration of the internet. It relied on web pages filled with content created by commercial companies.
Web2 was introduced with the arrival of social media, where users of the internet were no longer just observers but also creators of the content online. With web2, the masses could now benefit directly from the internet. However, it is still heavily reliant on commercial companies with huge resources, which has led to the centralization of the internet.
This highly centralized future has led to some unsavoury trends in recent times. Today, a few large corporations have the power to decide who can profit from the internet and who cannot. They also have the power to decide whose content is viewed by the masses. For many, this represents a dystopian Orwellian future.
Web3 is envisioned as an internet cut-off from Big Tech, where everyone has an equal voice. By eliminating the middleman, it will create a decentralized internet that is self-regulating in all aspects, including how content is created, and who can profit from it.
The Role of the Blockchain in Web3
Web3 is envisioned to revolve around blockchain technology, smart contracts, and crypto coins. The goal of Web3 is to create a single, decentralized layer where data can be managed across all systems without having to rely on mega-corporations that have their own interests, and are driven by the need to maintain profitability.
Governing a Decentralized Internet
For any organization to thrive, and grow, it has to be guided by a set of rules, which allows its users to understand how they can climb to the top. In the current state of the internet, Big Tech sets the rules on how things work.
With a decentralized internet, such centralized structures would be eliminated. Instead, governance would be via decentralized autonomous organizations (DAOs). A DAO enables the creation of a corporate structure that features the power of arbitration over several functions. For instance, they can be responsible for the accounts, division of shares, interaction mechanisms, and more. There is no limit on how complex or simplistic a DAO can be with enough time, expertise, and resources.
DAOs exist and are regulated via smart contracts. A smart contract is a self-executing code. Once all conditions are met, they execute the agreement contained in the code. Value and property can be authentically exchanged without having to rely on a notary register process to validate the transaction. In essence, it creates trustless trust, where the parties do not need to trust each other since the system is trustworthy. The use of code as law substitutes various organizational mechanisms, and in the future, it could substitute all of them.
Possible Applications in the Decentralized Internet
1.Data Analysis
Information decisions are only as good as the data on which they are based. By using the blockchain, it becomes possible to trust the validity of any data. Since its provenance can be proven via the blockchain, the quality of analysis results will be easier to validate.
2. Content Creation
For many years, content creators have grappled with who owns their work. To date, most online platforms still maintain that they have a right to use data uploaded to their platforms as they please. For a minor creator, protecting the copyright of their work via conventional methods is almost impossible.
The type of software and hardware needed to monitor the internet for copyright infringement and royalty tracking is simply impossible. Using the blockchain makes it easy to verify the authenticity of any content on the internet. It also makes it easy to track royalty payments without having to go through a third party. As a result, it eliminates the need for centralized organizations to track royalty payments.
It is impossible to fake any information when the internet is decentralized since it can immediately be recognized as fake, and penalties applied immediately.
3. Gamification via Tokens
Once Web3 becomes the default internet, many brands may begin to tokenize their reward systems with tokens that have real-world value. Current token systems mean that rewards are locked into certain programs. However, in a future Web3, tokens could be decentralized and used for various programs by different companies. Cross-brand tokens could essentially help to ensure that a lot of value, which is currently locked due to closed reward systems, is unlocked.
4. Decentralized Storage
One of the biggest challenges when it comes to a decentralized internet is how the information will be stored. It is part of the reason some may believe that a truly decentralized internet is not possible. However, there are already projects that demonstrate this is possible.
One such project working on this solution is the internet Computer (ICP) project. While the project is not the perfect solution, it lays out the basic framework for how decentralized storage could work in the future. Essentially, it would be an incentive-based system where users receive compensation for helping to provide storage and computing power for a decentralized internet.
Summary
In the future, blockchain technology adoption will mainly depend on the speed at which the masses will gain confidence in it. To most people, giving computers powers over functions such as property rights might be too difficult to accept. However, the masses will more likely accept some aspects, such as loan processing, which is already a feature of decentralized finance (DeFi).
Join Coinmonks Telegram Channel and Youtube Channel learn about crypto trading and investing
