The Evolution of Web 3.0 and the return of data privacy

Understanding Web 3.0 

The web has evolved several times since its inception, starting from Web 1.0 which forms the most rudimentary form of the web. Before going on to more advanced forms of Web which were called Web 2.0.

Web 1.0 consisted of static web pages which were purely for informational purpose. A more advanced version of this came in with Web 2.0 which supported interactive and dynamic web pages.

Social networking sites, AJAX, media sharing, lightweight collaboration, and so many other things form a part of Web 2.0. However, the evolution of the Web doesn’t stop over here.

Further ahead to this, a complete re-invention of Web 2.0 would be in the form of Web 3.0. This according to geeksforgeeks.org refers to the evolution of web utilization and interaction which includes altering the Web into a database. It enables the up-gradation of the back-end of the web, after a long time of focus on the front-end (Web 2.0 has mainly been about AJAX, tagging, and another front-end user-experience innovation). Web 3.0 is a term that is used to describe many evolutions of web usage and interaction among several paths. In this, data isn’t owned but instead shared the same data.

The Semantic Web (3.0) promises to establish “the world’s information” in a more reasonable way than Google can ever attain with their existing engine schema. This is particularly true from the perspective of machine conception as opposed to human understanding. The Semantic Web necessitates the use of a declarative ontological language like OWL to produce domain-specific ontologies that machines can use to reason about information and make new conclusions, not simply match keywords.

The key differences between the three by geeks for geeks are:

More features of Web 3.0 

Semantic Web

The succeeding evolution of the Web involves the Semantic Web. The semantic web improves web technologies in demand to create, share and connect content through search and analysis based on the capability to comprehend the meaning of words, rather than on keywords or numbers.

Artificial Intelligence

Combining this capability with natural language processing, in Web 3.0, computers can distinguish information like humans to provide faster and more relevant results. They become more intelligent to fulfil the requirements of users.

3D Graphics

The three-dimensional design is being used widely in websites and services in Web 3.0. Museum guides, computer games, e-commerce, geospatial contexts, etc. are all examples that use 3D graphics.

Connectivity

With Web 3.0, information is more connected thanks to semantic metadata. As a result, the user experience evolves to another level of connectivity that leverages all the available information.

Ubiquity

Content is accessible by multiple applications, every device is connected to the web, the services can be used everywhere.

What brought about Web 3.0?

First, there was Web 1.0, better known as the World Wide Web. Most of us remember those early days when you had to dial up the internet and sit through the noisy process. Websites were static, took forever to load, and a page like MySpace wasn’t even possible yet.

As more people started using the internet and began to recognize its potential, a new global infrastructure to support the World Wide Web emerged. The internet became faster and allowed for heavier applications and websites, giving rise to the era of social media, YouTube, Amazon, Airbnb, Netflix, and Bitcoin.

Today, people across the globe can share information and entertainment, shop, get answers to all their questions, and interact with each other, all on Web 2.0. According to estimates, 54.4% of the global population has access to the internet.

Apple’s Siri, Alexa are classic examples of web 3.0 which combines Artificial intelligence with voice recognition.

Web 3.0 is still under development and a lot of research is yet to be done. A lot of concepts including the basic definition of what is categorized as web 3.0 is vague.

A lot of novel technologies are being tried to automate things. This comprises Artificial intelligence, big data, the blockchain, and similar newer technologies. However, this seems to be a vague list of technologies. This is still getting evolved.

These newer technologies require more advanced skills. This is currently limited. With a low skill set, it is challenging to bring in newer innovations.

Web 3.0 will be primarily focused on data. This data is very huge and appropriate technology and storage architecture needs to be designed. While Big data seems to be the way forward, a lot of research is yet to be done on the most effective use of technology to store data.

Web 3.0 deals with data and can lead to several privacy concerns. Laws across several countries are restrictive. This is again a grey area on what information and access to personal data should be permissible and restricted while using web 3.0

How Web 3.0 is changing the economic landscape 

The transition from Web 2.0 to 3.0 is gradually taking effect without being noticed by the masses. The Web 3.0 applications look and feel the same as the 2.0 applications but the back-end is designed completely differently. Siacoin will just be seen as a cheaper Cloud storage alternative, Steemit as a social media platform on which people can directly exchange content for value, and Augur as a fun way to bet on future events.

The first killer application of blockchain has emerged, and major companies are moving their operations to this more secured portal, there will still be a global exodus from 2.0 to 3.0. Developers already have a clear example of how to balance blockchain technology with the user-friendliness of Web 2.0, and slowly everything will transition.

In the following segment, we will look at various segments and companies on Web 2.0 and see which blockchain projects are getting ready to disrupt the incumbents and lead to the 3.0 evolution.

Digital Payments

The majority of our online payments are conducted through the use of intermediaries in the form of credit card companies (VISA, MasterCard), banks, and PayPal. These organizations have the responsibility to ensure the funds move hands, keep all the private information secure, and prevent any form of theft.

For all this, these organizations incur massive overhead costs. Keeping data centres and capital secure while also making profits results in hefty transaction fees for users of these organizations’ services.

Cryptocurrencies meant for transactions solve a lot of these security concerns and dramatically decrease the cost, due to their lack of third party involvement. Bitcoin, Litecoin, Monero, and Zcash are all examples of secure digital currencies that can be quickly and cheaply sent around the globe. All users need is access to the internet and a device to keep their wallets on. For merchants, companies like Bitpay help them integrate cryptocurrencies into their payment system.

But coming back to the concept of a smooth transition, it is likely that most people will use Web 3.0 without knowing it, thus without actually using cryptocurrencies. Using PayPal, your bank account, or a credit card is much easier than creating accounts and trading on crypto exchanges, keeping your private keys secure, and keeping a cool head in the face of market volatility.

Stellar Lumens is a blockchain company that is committed to disrupting the digital payments industry by connecting banks, payment systems, and end-users. The platform allows for quick, reliable, and low-cost global transactions. These transactions don’t necessarily have to be in crypto, but can be any fiat currency. Stellar Lumens users won’t even realize that cryptocurrencies were involved in the process, even though on the back-end these transactions run on Stellar’s native cryptocurrency, XLM.

Another project devoted to transactions is the Request Network, often mentioned as a serious competitor of PayPal. The platform allows anyone anywhere to make payment requests. These payments are conducted on the blockchain, eliminating the need for intermediary parties and making the payments fully secured.

The team behind the Request Network understands that most people do not want to have to deal with cryptocurrencies yet, and they have implemented mechanisms that allow payment requests to work with every global currency. By leveraging blockchain technology, the Request Network has a serious competitive advantage, because transactions on the platform can be done for far lower fees than with any other industry player.

Social Media

Even though we keep using the popular social media platforms en masse, most users realize something is broken in their business models. Facebook has dominated headlines with their recent data scandal, but other cases like Instagram’s and Twitter’s manipulative mechanisms, as well as their completely broken advertisement model, are becoming more clear to the public.

The key issue here is that the data collected by these online giants are highly sensitive due to their nature, and it can result in gross invasions of privacy. You don’t want your friends going through your entire browser history, let alone some distant online conglomerate who not only tracks your data but also makes entire profiles of you based on your data, which it then sells.

And yet, cats are so damn cute, and we still want our phones to entertain us and help us keep in touch with distant friends. We can’t abandon social media; we just need a much better model for running it.

The Steem blockchain, and its best known social media application Steemit, lead the way in this segment of the Web 3.0 evolution. The Steemit platform has employed its economic model in which creators of content are curated by their peers. Quality content gets upvoted, and each upvote represents a microtransaction of Steem, the platform’s native currency.

The platform is ad-free, no user data is centrally stored or sold, there is no censorship of content by a central organization, and users are awarded cryptocurrency for being active on the platform and improving the quality of its content. Steemit is the leading application on the Steem blockchain, but there are more applications like DTube, a YouTube alternative, and dMania, a decentralized 9GAG.

The success of Steemit has given rise to some healthy competition. Narrative (a beautiful website) is a NEO-based competitor. It employs a similar dynamic to Steemit, but there is more governance by users who can own topic niches. The narrative also dedicates a part of its website to brands that can make themselves known to the platform through quality content.

There is also Sapien, a democratic and social news platform; Indorse, an Ethereum-based alternative to LinkedIn; and ONG.social that focuses more on privacy – and these are just a few of a growing number of blockchain-based social media platforms.

Entertainment

Besides social media, we turn to companies such as YouTube, Netflix, and Spotify for most of our daily entertainment. However, these mega-companies have taken their markets by storm, leaving little room for competition. This has turned out to be a good thing for the companies, as they can collect and sell massive amounts of data, but a bad thing for the creators of content.

Users publish their content on these platforms in hopes of having a shot at making a name for themselves but receive very little in return for the value they create. Additionally, there has been a lot of critique on YouTube’s questionable censorship and monetization policy, Spotify’s payments to the musicians on its platform, and Netflix’s unmatched power over the movie and series industry.

In this segment of the Web-based industry, there are plenty of blockchain initiatives willing to disrupt it. The music industry has been haunted by bad deals for artists and exploitation by labels, and musicians are taking the initiative to change this. Musician Imogen Heap, for example, started her own blockchain project Mycelia to make the distribution of value in the music industry fairer, especially when it comes to the creators of music. Voise is a similar platform that has set out to create a decentralized platform for music, directly connecting artists with their fans.

Flixxo is an Ethereum-based application willing to dethrone YouTube, and, as mentioned earlier, DTube is the Steem-based blockchain competitor. Another serious candidate is Videocoin, a startup that managed to attract $35 million during its ICO, which is creating a decentralized platform for all kinds of video applications, ranging from video content to live streams to news channels.

Storage

Cloud storage is one of the great solutions that Web 2.0 introduced to the world. Individuals and companies alike could suddenly cheaply store far more and larger files than their hardware allowed for, and these files could be accessed from anywhere.

However, even though cloud storage has major advantages, the fact that all stored data is in the hands of a centralized party is a problem. This is because it has a single point of failure, no matter how well-secured the cloud storage centres are. The data is held by one entity, and so compromising this entity is all it would take to get your hands on huge amounts of sensitive data.

So let’s decentralize cloud storage too. In terms of market cap, Siacoin is the biggest company in this segment. This startup allows people with excess storage capacity to rent it out in exchange for cryptocurrency payments. Siacoin has proved to be much cheaper than Amazon and Google’s storage services and based on their road map, we can expect some serious growth.

Another startup decentralizing storage is Filecoin. This company managed to attract $257 million in ICO funding, making it one of the biggest ICOs ever. Filecoin’s decentralized network reliably stores files at hyper-competitive prices. A third big player in this part of the Web 3.0 evolution is Storj, a comparable decentralized Cloud storage platform with low prices and high security, in which only the user has access to his or her data.

How to prepare your brand for the web 3.0 takeover 

As futuristic as it sounds, early-stage applications of the Spatial Web or Web 3.0 are already here. Now is the time for leaders to understand what this next era of computing entails, how it could transform businesses, and how it can create new value as it unfolds. By exploring both the more established and the more experimental Web 3.0 business models, people need to be ready to understand how some of them will accrue value over the coming years.

• Issuing a native asset
• Holding the native asset, building the network
• Taxation on speculation (exchanges)
• Payment tokens
• Burn tokens
• Work Tokens

Issuing a native asset

These native assets are necessary for the functioning of the network and derive their value from the security they provide: by providing a high with enough incentive for honest miners to provide hashing power, the cost for malicious actors to perform an attack grows alongside the price of the native asset, and in turn, the added security drives further demand for the currency, further increasing its price and value. The value accrued in these native assets has been analysed & quantified at length.

Holding the native asset, building the network

Some of the earliest companies that formed around crypto networks had a single mission: make their respective networks more successful & valuable. Their resultant business model can be condensed to “increase their native asset treasury; build the ecosystem”. Blockstream, acting as one of the largest maintainers of Bitcoin Core, relies on creating value from its balance sheet of BTC. Equally, ConsenSys has grown to a thousand employees building critical infrastructure for the Ethereum ecosystem, to increase the value of the ETH it holds.

Taxation on speculation (exchanges)

The subsequent generation of business models focused on building the financial infrastructure for these native assets: exchanges, custodians & derivatives providers. They were all built with a simple business objective — providing services for users interested in speculating on these volatile assets. While the likes of Coinbase, Bitstamp & Bitmex have grown into billion-dollar companies, they do not have a fully monopolistic nature: they provide convenience & enhance the value of their underlying networks. The open & permissionless nature of the underlying networks makes it impossible for companies to lock in a monopolistic position by providing “exclusive access”, but their liquidity and brands provide defensible moats over time.

Payment tokens

With The Rise of the Token Sale, a new wave of projects in the blockchain space-based their business models on payment tokens within networks: often creating two-sided marketplaces, and enforcing the use of a native token for any payments made. The assumptions are that as the network’s economy would grow, the demand for the limited native payment token would increase, which would lead to an increase in the value of the token.

Burn tokens

Generating communities, companies and projects with a token might not always be able to pass the profits on to the token holders in a direct manner. A model that garnered a lot of interest as one of the characteristics of the Binance (BNB) and MakerDAO (MKR) tokens was the idea of buybacks / token burns. As revenues flow into the project (from trading fees for Binance and stability fees for MakerDAO), native tokens are bought back from the public market and burned, resulting in a decrease in the supply of tokens, which should lead to an increase in price. It’s worth exploring Arjun Balaji’s evaluation (The Block), in which he argues the Binance token burning mechanism doesn’t result in the equivalent of an equity buyback: as there are no dividends paid out at all, the “earning per token” remains at $0.

Work Tokens

One of the business models for crypto-networks that we are seeing ‘hold water’ is the work token: a model that focuses exclusively on the revenue-generating supply side of a network to reduce friction for users. Some good examples include Augur’s REP and Keep Network’s KEEP tokens. A work token model operates similarly to classic taxi medallions, as it requires service providers to stake/bond a certain amount of native tokens in exchange for the right to provide profitable work to the network.

Sources:

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Mersch, M (2019, April 24) Which New Business Models Will Be Unleashed By Web 3.0? https://medium.com/fabric-ventures/which-new-business-models-will-be-unleashed-by-web-3-0-4e67c17dbd10

Maurya, S (2019, January, 22) Embracing Web 3.0: The New Internet Era Will Begin Soon https://hackernoon.com/embracing-web-3-0-the-new-internet-era-will-begin-soon-630ff6c2e7b6

Cook, A et al (2020, July 21) The Spatial Web and Web 3.0 What business leaders should know about the next era of computing https://www2.deloitte.com/us/en/insights/topics/digital-transformation/web-3-0-technologies-in-business.html

IP Location (2018, November 20) What is Web 3.0? https://www.iplocation.net/web-3

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Sharma, M (2018 September, 24) Web 1.0, Web 2.0 and Web 3.0 with their difference https://www.geeksforgeeks.org/web-1-0-web-2-0-and-web-3-0-with-their-difference/