How many steps are needed to reach Web3?

"Has anyone seen Web3? I didn't find it." On December 21, Tesla founder Elon Musk once again mentioned this hot concept.

Not long ago, Web3 was named the annual technology buzzword by Reuters. Many technology companies and frontier workers have expressed their willingness to embrace Web3, but the concept is still too vague and general, and hype has taken over the high ground. Musk once said that Web3 sounds like "nonsense."

In Reuters' definition, Web3 is used to describe the next stage of the Internet: a "decentralized" Internet based on blockchain technology. In this model, users will have ownership of platforms and applications, which will be different from today's Internet.

Currently, a few Internet giants control users’ identities and privacy data. Even on Twitter, the world’s largest social platform, there is no trace of Web3 features.

In the view of Ethereum technology contributor Josh Stark, Web3 is a set of technologies designed to reconstruct Internet control. In the Web3 world, users no longer rely on centralized entities to provide services and have more control over their personal identities and data. At that time, individual users will find it easier to share the commercial value previously owned by Internet giants.

There are still many obstacles to Web3, including how decentralized projects can efficiently complete the initial launch and subsequent iterations, decentralized network performance upgrades, and regulatory pressure, etc. In addition, users also need to be aware of "taking back control."

Musk jokes that Web3 is "like gibberish"

Although the concept of Web3 is increasingly appearing in the public eye, this emerging concept still appears vague and general before it actually arrives.

On December 21, Tesla founder Elon Musk tweeted, "Has anyone seen Web3? I didn't find it."

This is not the first time Musk has poured cold water on Web3. On December 2, he said on social media that Web3 sounds like "bullshit." On December 20, he said that the current Web3 is more like a marketing buzzword than reality, "I wonder what the future will look like in 10, 20 or even 30 years. 2051 sounds like crazy futurism."

Musk, who has always embraced future technology, has become conservative, positioning the current stage of Web3 development as a "marketing buzzword", suggesting a strong atmosphere of hype. Previously, he shared a cartoon about "urinal etiquette", which more vividly described the marketing sense of the Web3 concept. In the cartoon, a man enters the bathroom and walks to a stranger who is urinating, promoting popular concepts such as encryption, Web3, and DAO to him.

Musk mocks Web3 hype with cartoon

What Web3 is has not been clearly sorted out yet, but this word seems to have penetrated into people's discussion space in every possible way.

Not long ago, Web3 was named one of the technology buzzwords of 2021 by Reuters. In Reuters' definition, Web3 is used to describe the next stage of the Internet: a "decentralized" Internet based on blockchain technology. In this model, users will have ownership of platforms and applications, which will be different from today's Internet, the so-called Web2.

If we use this definition to look for Web3, Ethereum seems to be the closest one. In this decentralized network, a large number of decentralized applications have been established, including Uniswap, Compound, etc. Users do not need to register or authenticate to use these applications, which protects their privacy and allows them to better control their personal identity and usage data.

However, the application of Ethereum network is still mostly in the single field of finance. Its coverage is not wide enough, and even many applications are not that decentralized. The frequent occurrence of project parties embezzling funds is an example.

Under this situation, Twitter CEO Jack Dorsey believes that users do not own Web3. The actual owners of Web3 are the venture capital institutions (VCs) and their limited partners (LPs) behind the project. "Web3 can never escape their incentives. It eventually became a centralized entity with different labels."

As a centralized social media giant, Twitter CEO's doubts about Web3 obviously have their reasons. This remark quickly triggered a rebuttal from a16z partner Chris Dixon, who said that in Web3, all code, data, and ownership are open source, and venture capital (including a16z) owns very little.

When some Internet opinion leaders are discussing Web3, an important core point is "whether it is decentralized enough". So, what exactly is the ideal Web3? What challenges are there to "find it"?

The core of Web3 lies in "user control"

Web3 can be seen as another evolution of the Internet. Over the past few decades, the Internet has undergone many major upgrades, including the expansion of performance, functionality, and scale. People have moved from text-based Internet to streaming video Internet, from static web pages to full-featured applications under mobile Internet, and from list services to global social networks.

The performance of the Internet has leapt forward significantly, but the trend towards centralization is becoming more and more obvious. Data shows that Google has gained control over 74% of search traffic based on its search services. Facebook has built the largest social network and gained control over the online identities of 2.2 billion people.

Currently, all Internet services used by people in their daily lives are provided by centralized entities. These centralized companies control people’s identity data and privacy data, and also push endless advertisements to users.

Josh Stark, a technical contributor to Ethereum, believes that compared to the current Web2 era, the core of Web3 is no longer about speed, performance or convenience, but about "control". It is about who controls technology and our daily applications. Therefore, Web 3 is a set of technologies designed to reconstruct the control of the Internet. These include financial projects (cryptocurrency), basic communication technology (end-to-end encrypted information transmission), mass consumption scenarios (open social networks, p2p markets), and key Internet facilities (decentralized DNS).

In Josh Stark's view, in Web3, money will become a native function of the Internet, thereby unlocking many new business models, including intermediary-free lending, low-cost cross-border remittances, etc. The builders of these business models will shift from centralized entities to decentralized entities, such as a decentralized Twitter or Medium, which allows users to share content, comment, like, etc. The platform incentivizes users to contribute through built-in mechanisms, without having to consider indirect methods to monetize fans and traffic.

In a decentralized social platform, users do not need to wait for Twitter to add new anti-spam or anti-harassment features as usual, because the service ecosystem grows on open source protocols and users can control everything.

This social scenario is just the tip of the iceberg of the ideal Web3 world. With the help of blockchain technology, in Web3, users have more control over their identities and data. Due to the use of decentralized services, when people use social media, rent houses or cars, there will be no centralized companies collecting, storing and selling personal data. Industry insiders believe that individual users will be able to more easily obtain the billions of dollars of commercial value previously owned by platform companies.

The vision of Web3 is undoubtedly good, but there are still many obstacles to its realization.

First of all, in decentralized services, the commercial value belongs to the users, so who will provide substantial incentives for the early launch of the project? A typical example is that Didi and Uber once fought a money-burning war in the taxi market, which eventually changed the way people travel. When there is no centralized company to drive it, the development speed of Web3 applications may become slow, and the iteration efficiency may be significantly lower than that of centralized giants.

At the same time, the realization of Web3 also requires a strong blockchain network to provide support, but there is still no sufficiently mature public chain to carry the huge migration of Internet application services. Take Ethereum, the public chain network with the largest ecological scale, for example. A popular application can cause network congestion and transaction fees will easily go through the roof.

In addition, regulatory obstacles may be greater than imagined, because Web3 includes technologies to avoid censorship and regulation, allowing users to avoid financial regulation and law enforcement. When regulators perceive risks, Web3 will face huge resistance. Take Twitter for example. Although it was born in the United States, which advocates freedom of speech, not all speech can be publicly discussed on Twitter. Speech that does not conform to Western political correctness is also a minefield for discussion and will also face censorship and concealment by the platform.

When Musk claimed on Twitter that Web3 could not be found, people had to admit that centralized companies still play a key role in the Internet. The migration from Web2 to Web3 not only requires overcoming technical and regulatory challenges, but also requires users to awaken to the awareness of "taking back control."