Web 3.0: Decentralization Matters to Business

Web 1.0 was the beginning (or readable phase) of the Internet. Web 2.0 was the writable phase where users generated content. Google, Facebook, Twitter, and other “centralized” services dominated the Internet with user content for the past 15 years. These free services have made us (their users) their products. The next phase of the Internet (Web 3.0) will be decentralized.

Today’s Internet-based companies have built very tall “walled-gardens” or closed eco-systems. Fortunately, many of these companies have introduced APIs to allow developers to read and write to their centralized services; however, we’ve all seen what happens when a company like Twitter decides to change the rules of the game — startups, developers, and users pay.

Coincidently, many people believe that the Internet (as we know it today) has reached a point of extreme fragility and is one hack away from becoming permanently unavailable. Let’s rewind, the initial implementation of the Internet was called ARPANET. It was designed as a decentralized Internet where each node maintained a host file that mapped website domains to IP addresses allowing a webbrowser to access any website in a peer-to-peer (P2P) fashion.

Domain Name System (DNS) was introduced a few years before ARPANET was decommissioned. DNS made it possible to quickly grow Internet domains and content but at a price. The Mirai botnet attack recently demonstrated just how easy it is to bring down most of the centralized websites using a simple Distributed Denial of Service (DDOS) attack using Internet of Things (IoT) connected camera devices.

Cloud platforms such as Amazon’s AWS, Microsoft’s Azure, and IBM’s Softlayer were built to make it easy for “centralized” apps and data to quickly setup and scale as needed. These cloud platforms offer centralized storage such as AWS S3, centralized DNS such as AWS Route 53, centralized servers such as AWS EC2, and now centralized functions such as AWS Lambda.

Tomorrow’s companies and technologies will be “decentralized”. This means that their technology (and data) will no longer be hosted in centralized cloud services like AWS or Azure but rather on decentralized and distributed blockchains or mesh computing platforms like Computes.

Decentralized applications (Dapps) and data will will soon be controlled and accessed by users directly in a P2P fashion similar to our ARPADYNE decentralized web experiment. Rather than IP addresses, content will be accessed by hashes similar to those used by IPFS. (In fact, Firefox and Brave browsers are already working on native IPFS support and other decentralized protocols.) There will be no single point of failure or control in these new decentralized networks. Users will finally control their own data. Hackers will continue to target Web 2.0 companies but will no longer be able to access Web 3.0 user accounts due to lack of centralized databases.

While attending Stanford’s recent BPASE blockchain conference, I couldn’t help but notice how competitive the decentralized startup landscape had already become. New decentralized tech startups were already positioning themselves as the new “facebook” and new “netflix” or “youtube” and new “airbnb” or “uber” of Web 3.0. If you think about it, Computes and Filecoin could become the new “AWS” or “Azure” of Web 3.0.

Computers are made up of three components: network (IPFS), storage (Filecoin), and compute (Computes). Presented together, we are creating a very valuable computing platform in B2B markets as private mesh computers as well as B2C markets as public mesh computers. Organizations seem very interested in using Computes and Filecoin to reclaim their latent CPUs/GPUs and storage essentially creating private mesh computers everywhere. Here’s a quick sketch of how I envision our platforms working together.

If this Web 3.0 momentum doesn’t get the attention of well established Web 2.0 companies, perhaps DAOs will. There are new “companies” forming and self organizing as DAOs (decentralized autonomous organizations). These DAOs have no conventional management structure or board of directors. In fact, they may not even belong to a particular country. Their existence is governed by their decentralized user communities and developers. Dapps execute code (or smart contracts) on decentralized blockchains and mesh computers when virtual conditions or real-world events transpire.

Web 3.0 (decentralization) is the most profound change in the Internet since its inception. Since all communications, Dapps, and data are P2P, there are no more middlemen, government eavesdropping, or walled gardens. It’s certainly a brave new world. The businesses that embrace Web 3.0 and decentralize will be better positioned to meet their new competition.