Wednesday, May 18

Web3: users’ revenge against ‘big tech’ companies

An illustration about the blockchain

The role of investment funds in the future of the internet is the latest big debate among billionaires on Twitter: Elon Musk, the owner of Tesla, and Jack Dorsey, the founder of the social network Twitter, have questioned the hoarding of the web3 concept , the presumed next evolution of the internet, by Silicon Valley hedge funds. But what is web3 really?

The term was first coined by Gavin Wood, one of the founders of the blockchain network. Ethereum, to raise the possibilities that the decentralization of the Internet would give. In the current state of the network, users depend on big technology companies and their platforms. The servers where everyone’s data is centralized mainly belong to companies like Amazon, Microsoft and Google; which not only causes privacy problems due to the administration of this information, but also makes the system vulnerable. The web3 supporters want to end this.

Web3 Foundation, an organization created by Wood in 2017, is one of the initiatives that pursues this goal: “web3 seeks to return to the initial idea of ​​the internet, when it was decentralized, open source and based on nodes. Nowadays we all depend on the big providers, but if one of their servers goes down, we cannot use applications like WhatsApp, Netflix or Uber. We want web3 not to depend solely on one provider”, he told Five days Ursula O’Kuinghttons, spokesperson and participant of Parity, the Web3 Foundations subsidiary that develops one of the software to make this possible. According to the expert, web3 is already a reality, only that its elements have been developed over the years and its technology has not yet been assimilated by the general public. Examples of web3 technology that exist today are cryptocurrency decentralized finance and metaverse platforms.

O’Kuinghttons says that one of the most interesting elements that web3 will allow is the participation of its users. Currently, there are already different governance models in some platforms that use blockchain. Among them, there are DAOs (Decentralized Autonomous Organizations), which are user communities that participate in the platforms and that make decisions democratically about the future of their platforms. There are also the Technical Councils or Committees, which are groups of participants that make decisions about the development of the projects.

These models can work both in a totally democratic way among all users or as a kind of shareholders’ meeting where the future of these projects is decided: “For example, if Spotify decided to go to web3, it would have to democratize and look for a system of governance where the future of the application would be decided within a community”.

Much to the annoyance of Musk and Dorsey, much of the funding for the sector comes from investment funds that have seen potential in the projects. One of them is Lightspeed Venture Partners, the US fund that was the first major investor in the Snapchat social network. Lightspeed has been investing in these projects since March 2013: “In the last eight years, our commitment to the sector has increased. We have invested almost 500 million dollars in 2021 in 40 web3 blockchain companies”, Lightspeed sources have assured. Five days. According to the sources, it is enough to look at how Facebook changed its name to Meta to understand the magnitude of what web3 is going to be together with the metaverse and other of its applications.

In Spain, some initiatives have already begun to experiment with new business models based on decentralized systems. This is the case of Ethichub, a social enterprise that uses blockchain technology to connect groups of small farmers with users who can provide the necessary financing to work their land and sell their crops in direct markets. ”We are talking about a disintermediation of trust. Before, for example, we depended on the banks, which kept a percentage. Now it is no longer necessary”, he told Five days Jori Armbruster, CEO of Ethichub.

The most important blockchain networks

  • Bitcóin. The original blockchain system. It was conceived in 2008 by an entity or person known under the pseudonym Satoshi Nakamoto, whose exact identity is still unknown. Satoshi worked on the reference app’s source code alongside other volunteer developers until December 2010, at which point he decided to end his public activity and leave its development to the community. At the moment it can only be used for cryptocurrencies.
  • Ethereum. The second largest network in the world. They created the concept of ‘smart contracts’, which are a kind of certificates that also allow the creation of tokens and NFTs, among other things. It is programmable, which means that developers can use it to create new types of decentralized applications.
  • Polkadot. Polkadot is the flagship project of the Web3 Foundation. According to its creators, Polkadot is designed to provide full interoperability. The network seeks to facilitate an internet where independent blockchains can reliably exchange information and transactions. It was founded by Gavin Wood, one of the founders of the Ethereum network.