Web3 Explained — The Road to Decentralized Internet Ownership

1, 2, Web goes 3. Giving a version history to the internet can come across like a buzzword. Anyone who glances at new projects emerging in the online space will quickly notice the heralding of Web3 as the savior of the modern internet — with products providing the ultimate integration with this new and essential conception of cyberspace. It’s true, but this is often said without context. Let’s provide some.

What is Web3? How does it work? Is Web3 live? And if so, what sort of utility can it provide to global internauts?

The History of Web1 or The Dawn of Data

We all know the internet has changed everything. When the digital super-highways of information were first created, it led to a drastic improvement of humanity’s ability to communicate with each other. By doing so, it propelled hitherto impossible avenues of commerce, and allowed businesses to begin to work with others internationally in a way that wasn’t startlingly complex and horrendously slow. The World Wide Web was the harbinger of the globalized world we all live in today.

In the beginning though, the web was not a very smart place. You take it for granted now that an error-strewn typing of the words ‘bestselling novels available on Amazon’ into the search bar will throw up what you need. In the past, not so. There was no intelligent software built into the architecture of the web to help you find what you seek and help you do what you needed to do.

Rather, Web1 was an arcane catalogue, tricky to browse, where, if you knew exactly where to go, you could arrive upon various outpost storefronts of e-commerce and transact, or become part of communities, or download the data posted there. Early ‘search’ programs like Altavista were not really worthy of the name, and social media sites were merely a twinkle in the eye of some ruthless Harvard boy. Accessing the web was entirely done from desktops and — most crucially — it was not an ‘always-on’ activity. Browsing the web was like going to shops, a fun activity reserved for free time to spend a bit of money and enjoy some entertainment — usually at the expense of blocking all incoming calls off your landline as your modem hogged it to serve you data. Furthermore, there was no consistent spree of content being created. Hosting a webpage was expensive, required dedicated infrastructure, and so websites were hosted either by big business or by dedicated hobbyists.

Corporation-Enabled Web2; Always on!

It’s strange to think of a world without your mobile. It’s statistically likely you’re reading this very article on your phone. When thinking of Web2, it is hard to underestimate how much mobile access changed everything. Now that the web was always on and always accessible then — combined with the increased sophistication of the internet running complex software (akin to software only your PC could previously run), then a vast profusion of internet-enabled services began.

This was aided and abetted by the pioneering of cloud-based computing that meant all businesses, great and small, could get a portion of the infrastructure they needed to deliver their services to customers and their content to consumers. It resulted in spectacular economic growth as people could search effectively for what they needed using services like Google. Even cottage industries could be on the front page of the internet. Booking hotels, taxis, trains and cars for travel, advertising your products and creations through auction sites, and of course the constant coruscating chatter of social media.

Social media, and a social sense of the internet is, too, at the crux of Web2. Whereas previously content was the domain of dedicated, business-orientated providers, social media placed content creation into the hands of users. Just about everyone has now provided some tidbit to the great internet hive mind super-consciousness that is continuing to define the human race. Maybe it was only a status update 8 years ago, maybe you tweet daily on Twitter, but by now it’s unlikely you haven’t contributed. Internet endeavor is now a collective enterprise of creation, data spirals expanding outwards every day, like city lights, receding. Gibson, who first coined the term cyberspace, called it a ‘consensual hallucination.” He was close.

Because ‘consent’, when it comes to the web, is still a crucial battleground. It is one that might define the future of our species. It’s a battleground upon which many of us have meekly surrendered, accepting cookies from anyone who will feed us in exchange for our content, our data, the spiritual ‘soul’ of techno-sapiens. Will we live in a tech oligarchy, or is there an opportunity for our consensual hallucination to become a lot more, well, consensual? This, then, is what Web3 is.

Exploring Web3 — Giving Society a Stake

In our current conception of the internet, users interact — at the permission of the network providers — with various services. In exchange, those services absorb as much data as they can get away with so it can be used to profile its users and use that information to sell them services, chronicle their habits, and maybe even influence political elections by tapping into what they are susceptible to based on browsing history.

How is this possible? It’s because the internet is currently a permissioned network, accessed through central ISPs and funnelled into the services of large corporations who hold the data on their servers and control the information you can see. The information is aggregated into the middle and spread out to the edge. Although shocking to consider, the current structure of the internet means a national government could, in theory, turn the whole thing off — or edit the nature of it. Yes, there are workarounds, but they would be too flimsy or too specialist to engender any populist recapturing of the net.

However, Web3 aspires to three things: to be open, permissionless and trustless. Open, in that the software that powers it is completely open source and viewable by anyone. Permissionless, in that anyone can access any service and there is no gated access. Trustless, in that every proceeding and interaction on the net is ratified consensually and not by a single third party controlling everything. Something that, truly, can never be switched off or controlled by anyone, ever.

How Web3 Will Change the Internet

Heady stuff, but it was actually Tim Berners Lee’s original vision for the web, what he called the ‘semantic web’. A truly open network where trust is validated by the entire community of online users and commerce and activities are regulated by unimpeachable smart contracts viewable to all. Where a third party can’t seize your funds, block your transactions, or limit or control what you do.

Without the need for a third party to ensure trust, and with trust being an implicit feature of the network you are interacting with, it both speeds up and incentivizes shared endeavor. If two counter-parties can connect and do business without having to worry and without having an intermediary broker, the subsequent burst in global economic growth will be unprecedented. It will incentivize the long-tail of content and service providers that make up the heartbeat of the web.

There are other advantages too. Platform-dependency is a real trauma facing businesses today. If Facebook arbitrarily delists your page that is the main driver of your revenue — it’s over for your business. Organizations themselves with decentralized authority can be more resilient to rapid change through the governance of their participants.

Unlike Web2 which is known for funneling value to central entities who own the data, Web3 creates significant value for its very own community of users.

The Hurdles of Getting Web3 Right

Of course, Web3 is still extremely nascent. Suitable on-ramps to plug into and take advantage of Web3 are rare and are often not truly decentralized — rather an overly bureaucratized entity who claims 3.0 but are really 2.5 or just 2.0 in sheep’s clothing.

We believe that cryptocurrencies and decentralized finance represent the stepping stone for Web3 to become truly global. On-chain value transfers deployed within decentralized and permissionless protocols will empower seamless value transfers anywhere in the world, allowing user-governed interaction at an incredible scale. From micropayments, credit markets, and yield opportunities, to in-game economies, art collection, and decentralized autonomous organizations, Web3-enabled DeFi will reshape the world’s financial architecture.

However, there are some bottlenecks to adoption. Unsurprisingly, many of the Web3 hurdles also apply to the DeFi realm. Of these, we’d like to bring up ease of access, interoperability, and capital stability.

To interact with Web3, you need to be able to buy and deploy stablecoins across the entire architecture of the blockchain economy, not just a siloed mainframe where you are cut off from all emerging projects. You need to transact on a decentralized network, and you need the freedom to depart from that network as required. It’d also be ideal not to spend hours trying to figure out a protocol’s tools, menus, and features, only to find that they’re limited.

Demystifying Web3 Access, Value, and Interoperability

Onomy Protocol’s suite of products allows total integration with the Web3 economy, but not in a buzzword-like way. By definition, building in DeFi is synonymous to integrating Web3, so to reach our goals, we mustn’t only develop a solid infrastructure for the deployment of financial products. Rather, we must make it so that access is unrestricted, capital is secure, transactions are efficient, and the protocol is interoperable.

By now, you’re likely well-aware of the products being built, and if not, here’s a quick refresher of what Onomy Protocol is (psst, we’re a multi-chain decentralized ecosystem converging traditional finance with DeFi through an orderbook+AMM DEX, stablecoin issuance system, native layer-1 network, and DeFi access wallet).

Now that this is out of the way, let’s explore how we demystify Web3-enabled DeFi.

We can all agree that adoption truly happens when the unsavvy can freely interact with tech products. Our design principles, from software specification and code to the interface, are solely focused on the user. From the first glance at our upcoming DEX, you’ll notice an intuitive interface that quickly guides you from new to pro. Market, limit, or stop-loss orders can be placed with the click of a button for multiple pairs, even when transacting across different blockchain networks.

Secure, non-custodial and frictionless asset storage? It’s here. Through the Onomy Access Wallet, you keep your private keys, and when opting for Natural Rights, you can log into multiple blockchains by simply scanning a QR code. This eliminates the need of having to keep (and remember the passwords) of multiple browser extensions, and removes the difficulties of finding the right platform to bridge your assets through. Finally, there’s no more reliance on centralized bridges or wrapped cryptocurrencies that may or may not keep their value.

Our upcoming partnerships with the market’s leading players will enable simpler adoption of DeFi, by creating super fast highways of inter-chain asset transfers that allows users to tap into the newest opportunities as they unfold, anywhere within the crypto-sphere.

Last but not least, we preserve value. Cryptocurrencies brought along novel means of wealth creation and value preservation. However, not everyone has the risk appetite to hold their life savings in bitcoin, especially when the bears come. As the market matures, we’re likely to see less stringent price swings, but stablecoins pegged to the value of national currencies can be transacted and accepted anywhere, at any time. With Onomy, users may seamlessly mint crypto-collateralized on-chain representations of fiat currencies, which can then be used to trade the Forex market, efficiently remit money overseas, obtain yield via their existing capital in DeFi, or simply pay for products and services. Crypto payment adoption has been rather lackluster during the recent years, with most merchants being adverse to the risk of storing their capital in volatile cryptos. However, as stablecoins become established as truly stable assets, the trend will change, and Web3 will power the transition.

Web3 — Decentralizing the Internet of Value

Web3. A buzzword then? No — only when used by centralized entities trying to absorb excitement in this new paradigm of human social interaction. Web3 is a time in history where the hallucination that dominates our lives becomes consensual, where cyberspace becomes our space — a space for humanity to evolve and roam securely, trustlessly and free on the data highways of our community-owned internet.