Web3 hype explained

Web3.0

Web3 noise

My fellow Avenga colleagues and my LinkedIn network asked me what I thought about Web3 or Web3.0.

There are both fans of Web3 and those who openly criticize the idea. Let’s take a look at both the pros and cons.

I witnessed the Internet revolution from the dark ages using Mosaic and Lynx in 1996 on Sun Solaris machines, to opening the first web pages, and then being overwhelmed by Netscape 2.0 which allowed images to be displayed inline on the web page as before it was limited to only text. I remember gopher, finger, FTP, CGI, and Java applets. So 26+ years of web experience and knowing how it all works, from the photons in fiber cables, to protocols, to backend, to front-end, to the cloud, to the user experience, to content management strategies  . . . . which makes me feel compelled to comment on the internet revolutions and evolutions. 

I didn’t ask for Web3 but here it (kinda) is, so let’s dive in.

Internet issues for me and you

What are the main problems with the current Internet? 

I did not run any surveys, but let’s take a moment and think about it. All of us daily use the Internet via desktop, tablet, and phone browsers. So, what is bothering you?

I know what is bothering me and I know I am not alone in this. Let me share my thoughts with you.

For me, as a user and an avid technology researcher who uses the Internet 16+ hours a day, first of all, it is the inferior and annoying user experience. And, with a clear trend of it becoming worse. 

The Internet used to be much faster, lighter, and easier to read, and it had no cookie pop-ups, fewer inline aggressive ads, and it wasn’t asking me to allow notifications.  I am an active user of the reading mode in both Apple Safari and Microsoft Edge, while using an alternative Twitter client app to follow the industry news in order to reduce my anxiety and be able to focus. Another trend that I hate is replacing 500 words of text with a lengthy 30-minute video that has a very sparse amount of information. Sometimes the accompanying article is just a short summary of the video and then an embedded video. I don’t have 30 minutes to watch something that I could read in five minutes. (Of course, we can speed up a video, but still, it’s a very inefficient use of my time).

Search engines used to return the results I wanted without paid content on top and without trying to guess my intent, which is wrong almost every time. (DuckDuckGo is a key exception and I hope it doesn’t follow Google’s lead). 

And the perceived speed of web pages can be annoying too, even on my fast M1 machine with a 1 Gbps fiber network and ethernet cable. Fatty JavaScript monsters get in the way of the user accessing the content, and then the waiting time is “rewarded” with annoying pop-ups and cookie forms. 

Plus, the dominance of the Chrome browser is so huge that many websites simply do not work correctly in Apple Safari, which is much faster and much more energy-efficient, and certainly less privacy-invading than Google’s browser. 

Also, many pages still do not support system-wide dark mode settings, and literally blind me during my evening reading sessions.

There’s more to fix in today’s Internet for me, but let’s just stop my complaining here, because the list is long enough and there’s no cure in sight. Unfortunately, there are only workarounds and funny memes about our current inferior user experience.

Maybe you agree or disagree, it’s fine either way, but we all have our own personal and professional use cases, experiences, and opinions.

How is all this related to Web3? Because, Web3 is advertised as the primary and ultimate solution for the Internet’s problems. A new Internet era is needed to fix the current Internet problems.

Internet problems by Web3 proponents

To my surprise, all Web3 proponents are trying to fix the different problems of the Internet. They claim the main problem of the Web today is its centralization. Like if the Internet was owned by a few major companies like Google, Facebook, Amazon, etc. and users cannot use the Internet as they want.

Of course, this is not true as you can open your own WordPress website in minutes, quickly optimize it and publish whatever you want. Plus there are tools to turn poor web pages into secure and well-performing experiences for the users. But, this is what Web3 proponents say in any opening statements about the need for the Web3 revolution.

You can publish your photos, videos, or whatever you want using tens or hundreds of readily available services, or even just opening source tools you can deploy yourself or with the help of technology partners.

However, the centralization (or domination to be more exact) is not a myth entirely. For instance, YouTube dominates the video-sharing market (TikTok is behind them), Google Search dominates the search market, Google dominates Internet ads, Facebook dominates the social networking space, etc.

Internet traffic is dominated by several major services from the key major players. Depending upon the research, it’s up to 80% – 90% of all Internet traffic. The traffic costs, as there’s an entire market that sells and buys petabytes of Internet traffic.

Lots of traffic goes through major proxies like Cloudflare and Akamai, so there’s a point about the fairness of Internet traffic management as well. The monopoly of application stores by Apple and Google is also viewed as the centralization of mobile experiences. (I prefer official secure stores from trusted vendors rather than exposing my personal data on my mobile devices, but others disagree and prefer more freedom).

None of those huge companies are a monopoly, because there is competition, albeit often much smaller companies, and they are almost doomed to fail in comparison.

I did an experiment once and tried to live without Google’s services (for personal use) and it’s perfectly doable. There’s a huge world outside Google and Facebook including email, maps, videos, search engines, and browsers, and everything can be replaced.

I’ve never ever gone easy about the disregard for privacy presented by major Internet monsters in many of my articles including Human Digital Twins, so why am I not jumping on the Web3 bandwagon? At least not in its current shape? 

What is Web3 then?

Let’s start with the big enormous lie that is being repeated over and over again by the Web3 fans. Web3 people divide the Internet into three phases. Web1:  which they claim was a read-only Internet and lasted until 2004 (generally), but for the record, this is simply not true, because we could order food, buy goods, and even perform bank transactions. Web2:  which they claim was when the Internet-enabled sharing content and being creative (blog platforms, YouTube, TikTok, etc.), but was centralized. And now, Web3:  which puts users in control of their content. 

Again for the record, this is something that can be done today with a little bit of effort instead of the convenience of uploading it to the Internet giants and then whining about not being in control. 

Plus, I have used the decentralized Internet in the last millennium to download, let’s say, Linux distributions using a Torrent network and decentralized protocols such as DHT, in particular. 

Decentralization is the critical property, but there are also applications that operate in this new universe, decentralized finance (DeFI) as the best example.

Web3 is heavily based on blockchain technology including distributed ledger apps, called DApps, that are usually written in the Solidity language and executed on the Ethereum platform. And, these platforms are out there, they work, and there are even free courses on the Internet to start learning and using them. Any previous blockchain experience is the key to start building Web3 applications.

In a kind of irony, the front-end is basically the same as in the current web, however, it is the backend that is totally different from today’s backend, which is based on databases as the stores for transactions and content. Previous revolutions or evolution have been focused on user-facing opportunities, such as being able to write this document in Google Workspace using just an Internet browser or by using a favorite service on a mobile device. 

After all, the topic is so hot that I would not be surprised if someone announces a new design soon for Web3, etc., and then people will follow the trend. This is how hypes work, every single time, and Web3 hype is no exception.

Decentralization of content distribution and operations

In the case of the traditional web, the data, content, and translation records are stored on servers in databases, queues, and files, however mainly in clouds nowadays.

In the case of Web3, the idea is to store data on the blockchain and distribute it in chunks, called blocks, into a distributed and decentralized network of nodes which contribute to creating a global network of content.

By the way, I have known of such networks for at least 20 years, but let’s keep on pretending for a few more minutes that this idea is new (Freenet for instance has been available since the year 2000).

Ownership of data

Data is owned by individual users or communities, and not by a single company (like the Internet giants). Again, you can own your own data today, but you have to rent your own server (which takes a few dollars and minutes to do for more tech-savvy people). In the Web3 era, to own your own data, for a change (?), you have to have your own server (irony!) yet the data will be stored as encrypted and signed blocks of a digital distributed ledger. So in order to own data with Web3, you have to do more or less the same thing, but it will be stored differently. Plus, did you know you could already use privacy-preserving networks for the last 22+ years? But, that kind of message would undermine the “novelty” of Web3.

Tracking protection

Many Internet users do not like to be tracked and try to opt-out as much as possible to avoid tracking. Tracking user activities is much more complicated in the Web3 era than on the regular Internet. Is it good? In the case of personal attacks, fake news, etc., it would be much harder for law enforcement to find someone hiding behind a screen and committing cybercrimes, including institutional or government-based attacks. So, it’s not so good after all and it can do more harm than good.

But is it even real? You probably guessed it already, it is not. You may have perfectly decentralized nodes and blockchain, but there’s always some kind of access point to it from the regular Internet, like normal emails, normal IP address, browser settings, and behavioral patterns. But then again, maybe you also donated your crypto to support the new services. This can all lead back to you.

Resilience

Web3 promises more resilience than the traditional web. Yes, we do have multiple nodes, redundancies, etc., but there’s still a central node or entry point (proxy) which could be the single point of failure. In the case of Web3, there’s a promise of much more resilience, because the underlying blockchain is decentralized and any single node may fail without affecting the integrity and availability of the data.

At least theoretically this is true because Web3 is accessed through the Web2 layer of the user’s interface, and the same risks apply to Web3 as a consequence. 

It should be harder to lose data in Web3, but it also means it is impossible to remove any data. And, this is a huge issue. What about the right to be forgotten in the GDPR EU regulations?

Unstoppable applications

Web3 fans are happy about applications that cannot be removed nor stopped (“censored” in their vocabulary) and claim it is one of the pros of Web3. Everyone can deploy the application, yet it will run indefinitely.

What about bugs? What about apps stealing data with malicious intent? There are two sides to this coin, and it seems the solution is worse than the problem. 

Users can profit from their data

In the case of the classical web, and to be more specific in the case of an average user not willing to put out any effort, the Internet giants do in fact own the user data and benefit from it. 

It’s not the problem of architecture, infrastructure, or Web2 technologies, but more the marketing power and convenience of using the most popular ad-based services, and not their paid alternatives.

But, Web3 fans simplify this by saying that users are not profiting from their own data in the Web2 era, but they will be in the Web3 era, because of NFTs, for instance, and the lack of intermediaries between their content and the buyers. 

Who will benefit from this?

Can ideas based on so many lies and misconceptions be successful?

Oh yes, they definitely can. It has been proven many times before. (I’m skipping any sensitive historical and political topics here). Many people still believe that Apple invented smartphones and tablets, Facebook was the first successful social network, that Google is the only usable search engine, or even that the CIA is not behind the Tor network. Not so many of us like to wake up from our digital dreams. And, the same rule applies to Web3.

Venture Capitalists (VCs) who invest believe that Web3 companies will generate money. So, definitely, this is a new opportunity for buying/selling companies in the Web3 space with a profit. This is their business model so there’s no point in wondering why they are looking for any new hot new topic that can heat up the market, as it’s only natural. This definitely creates demands and more business activities. There’s so much money in the market that there’s a lot of pressure to find new investment opportunities, even in the technology space.

A new wave of startups is a fact at this point. Many of their solutions are replicating classical business models, and basically selling art, music, insurances, loans, or any other services, but in a Web3 paradigm and world by using smart contracts instead of applications that store data in decentralized Ethereum blockchain, and bypassing regulators and the middle-men.

Terrorists, fake newsgroups, troll farms, conspiracy theories, and organized crime will also benefit from this technology in which tracking and government surveillance are much harder to achieve, and content is much harder to remove compared to the traditional Internet. I stand by my words, in case you haven’t visited the Dark Web yet, try it one day for research purposes (but do not buy anything there) if you want to see the inferno of digital hell for yourselves. It’s much worse than you can imagine.  In this decentralization idea with obsessive censorship resistance, the entire Web is going to become more like Torrent/DHT/DarkWeb with traditional web or mobile app UIs on top of it.

Freedom of speech fighters and whistleblowers already have options so, despite the claims of Web3 fanatics, they can already publish their content in a safe and hard-to-track way. 

Content creators? With the classical Web, and to be more specific for an average user who is not willing to put out any effort, the Internet giants do own the user data and do benefit from it. 

It’s not a problem of architecture, infrastructure, or Web2 technologies, but more the marketing power and convenience of using the most popular ad-based services, and not their paid alternatives.

But, Web3 fans simplify this by saying that users are not profiting from their own data in the Web2 era, but they will be in the Web3 era, because of NFTs, for instance, and the lack of intermediaries between their content and the buyers. 

Open source communities cannot earn money in the classical model (at least not with the open-source code directly), but in the case of Web3, open-source code developers can earn money from their components and code deployed to the Web3 blockchain. This is a new business model which may work for many independent developers and companies while sharing the code with entire communities. 

Software engineers always benefit from any new hype or idea, because their work is even more needed to realize the dreams of startups and showcase the technology for investors. This time there’s a kind of classical web and backend development job to do, but also relative greenfield technologies for blockchains, including smart contracts. And, everybody I know who worked with them is saying that they are not as mature, stable, and reliable as more enterprise-grade tech (i.e. Java, Python, C#, Go, etc.).

Software companies also benefit from Web3 projects delivering Web3 as a service product, by designing and implementing Web3 specific applications. However, the mantra of hard-to-find experts is even truer than for any mainstream technology. There are and will be new technologies, frameworks, and developers’ tools.

What’s in it for (non-tech) enterprises?

We’ve mostly talked about the user perspective, which is OK, because employees, business partners, and customers are the users both for private and professional purposes. But, what is there for enterprise IT and what are the business opportunities?

The Web3 infrastructure has promised to be much more private and cheaper than those from the main cloud providers. Once enterprises create solutions for the Web3 stack and era, they will be able to run them cheaper and more securely. At least, that’s one of the assurances of Web3 infrastructure companies. 

The business benefit and case is when the user of the business services expects to be anonymous (or to be more precise, not to be personally identifiable). For instance financial advice services, without revealing personal information or bank accounts, there is just an anonymous conversation with an agent (human or bot) about the option for investment in a particularly personal and market context.

The same principle can be applied to the health services sector when users would like to seek medical advice or diagnosis without exposing their personal information (paid using crypto), and then to decide if they want to see an actual doctor and start treatment or not. 

And yet another example is the IoT scenario, where anonymous devices serve as actors sending data to a secure ledger and then there’s an analysis performed with the results being returned to the user without jeopardizing the anonymity of the data.

This is entirely a new paradigm, a way of thinking about doing business, which is so far far away from the current ways of doing business. 

The near-term benefit and competitive advantage areas are for the companies to enter the Web3 space to appeal to the crypto nerds and early adopters, and build a presence there. Virtually any business model can be transformed into a Web3 model, and there are already insurance products, loans, and the selling of music and art. Many new companies are attempting to do so, in order to create Web3 alternatives to the Web2 giants and competitors.

The much lower hanging fruit is a more secure authentication of the users while using the Web3 authentication, which is expected to add more security to well-known protocols, such as OAuth2.

Also, the opportunity of misuse and fraud is enormous, because both a business and software paradigm shift is always more difficult to change compared to “just” switching to the new infrastructure paradigm.

What about new user experiences?

From a user-facing perspective, it’s the same (modern) web or mobile application. 

The experience is expected to be worse from a performance and responsiveness perspective, as unfortunately, this is the cost of decentralization and a much higher degree of privacy.

This will be explained more in the cons section.

What are the benefits for the user?

The benefit is to satisfy the personal preference of not using the centralized infrastructure. The content itself and transactions are stored in a decentralized way, but . . .  and there’s a huge BUT.

Ironically in this new “decentralized” Internet, there’s a centralized traditional part and a decentralized “core” that’s based on blockchain technologies. 

The centralized part means web pages, web applications, domain name resolution services (DNS is hierarchical), and routing protocols. Below this, there are various blockchains and smart contracts, which are the key components of Web3. So in other words, we have to pay a performance penalty, yet while still being largely dependent on a centralized infrastructure.

In other words, Web3 is and will be controlled as well, but probably by other companies instead of the (allegedly centralized) current Web. This is how the decentralization dreams end before they even start.

Web3 also promotes the idea of being censorship resistant; nobody can stop anybody from using the service. For example, Twitter or Facebook blocking anti-vaxxers and fake news people. Web3 promises to not to allow this kind of censorship and blocking. In the case of Web3, fake news and insulting disinformation is guaranteed not to be removed. Of course, there are voices trying to regulate it somehow, but the whole idea is about not regulating anything and allowing everyone to do what they want.

Web3 has built-in crypto payments for services and products which are hard to track, but the integration is easier than in traditional payment systems (linking credit cards, etc.). Again, this benefit is convincing for crypto fans and will be a huge problem for tracking illegal activities like buying illegal content from Web3 services. Of course, in the case of fraud, users will most likely be helpless, not being able to seek help from any banks or regulators. No personal data is available to track the perpetrators, etc.; at least it will be much harder to do so than on the traditional Internet. Blockchain is expected to ensure no transactions are lost, but it does not solve all of these problems.

Cons for the users

The freedom of being insulted without legal consequences and fake news without an option to ever remove them, is not the future I’m looking for. Even Web3 creators admit it’s an important issue and they (as always) are claiming to be working on the problem. But by default, it’s much worse than the already toxic traditional Internet. Of course, there might be instructions saved in blockchain to “not to show post-ID 24234234” but… it’s not truly deleting it and it will stay in the ledger forever.

The user experience will suffer from a much lower performance and even worse responsiveness, depending upon the situation. The availability of the decentralized nodes will make it may crawl and result in users closing the browser tab after ten seconds, or it may timeout after a number of minutes. It’s always much worse, and how much worse depends on the content, time of day, etc., and so it is totally unpredictable.

It’s more like using DHT to download torrent files, or using a poor quality VPN service. Using Tor your mileage may vary, but it’s expected to be inferior compared to the current web.

It’s also not free, as the regular Internet is (by selling our digital lives one may add and I agree to a certain extent). To support the decentralized networks, someone has to pay for it with their digital money or a transactions fee (indirectly), and this cost is imposed on the users. How much? This also depends upon various factors. One of the examples that I found claimed to cost tens of dollars to create an account and a few dollars for each post.

To summarize, it will be much slower, not really decentralized, controlled by companies, and you have to pay for it. And, you won’t find your friends there yet, nor your favorite stores or service providers.

Environmental issues

While the entire (ok, not entire) world is fighting to reduce their CO2 footprint by the year of XYZ, there’s an enormous amount of computational power that is used every second worldwide to mine cryptocurrencies, and… support the Web3 infrastructure.

Everybody who mines crypto knows that it’s a kind of heating alternative during colder days, and the electric bills are rising for a few bucks profit.

From an environmental perspective, Web3 is expected to be simply a nightmare, with no sugar coating at all. Of course, they promise new algorithms that require less energy consumption, and they always do, but actually, they make it hundreds if not thousands of times more energy inefficient. In other words, there’s a totally different definition of being environmentally friendly in the blockchain world than in the regular world.

For me, as someone caring for the environment and addressing the issues from a technology perspective, this ecological part of me is hoping Web3 will never fly, so to speak, and that it will die quickly like many other ideas in the past. 

Let’s jump to Web3

One may believe in the problem of centralization with Web3 being a fix and want to try it. Others may believe in new business opportunities for their businesses. In order to jump into it though, you must jump over the technology barriers.

Unless you know skills similar to mining crypto yourself (not the same skills, don’t judge me now as I’m trying to find an analogy) you’ll have to rely on external proxies/partners. So advanced users running their own servers are the true Web3 users IMO, the rest (99%?) may never know if they are really using Web3 or 2 or whatever else.

In order to join Web3, from the regular user’s perspective, not from a tech crowd’s (people like me and maybe you as well) perspective, they will have to use centralized infrastructure anyways. Web3 is really a service, so to speak. So on Web3 there are companies seeing their traffic, managing their keys and identities, accepting their payments, getting donations, and converting from regular money to cryptocurrencies and NFTs.

Web3 and the regular web are expected to co-exist because Web3 is not supposed to replace the web. On its own, the web is doing great by enabling so many people to access products and services, communicate with each other, and share their views and photos. Web3 depends on web technologies and an infrastructure that are not even supposed to change in the foreseeable future.

Reality

Web3 is definitely hype and hot words and is currently appealing mostly to a small crypto fanatics minority and some naive freedom of speech communities. 

Yes, technically it can be done and is already being done.  All the technology pieces are in place and are already being used to build Web3 applications. The investor’s money is pouring in. Individual people and businesses are hoping to earn money on this hype and they are starting earlier than many others. 

For Avenga as an IT services partner, it means we have all the assets needed to build Web3 applications if there’s an enterprise demand and need. Significant value seems to be hard to find at this point in time, but it may change over the years and we never say never so as to be open to finding a viable case, even today. 

We live in times when technology is not the main problem (well, not for tech companies like Avenga), but business cases and justification are the problems.  Finding the problems of a new technology solution is the key to making it a viable option for businesses. The use cases of Web3 for enterprises are currently … under construction, and it’s yet to be figured out what changes for business it is truly going to bring. They might be huge, and some claim they will be, but we’ll see. 

Of course, enterprises may jump on the Web3 bandwagon for company image purposes first, because their products and services are so similar that everything matters to the users when they choose one service provider over another (in any industry). Perception is a fact when it comes to investment, sales, and purchasing decisions. 

More and more business cases are being copied and readapted by other companies. As usual, there are early adopters, followers, and those lagging behind because they are exercising more caution. 

I can already imagine my fellow CIO and CTO friends returning from major conferences, and some of them feel the fear of missing out (FOMO) when it comes to Web3. I wonder how this hype will play out in the enterprise world, as now it seems to be very much limited to the crypto crowd and VCs. Will it bounce off as blockchain did a few years ago? Will it become mainstream in one form or another? Or will it find a viable enterprise niche like DLTs did? Feel free to talk with Avenga Labs about it. 

Prediction

Web3 seems to have forgotten to put the (regular) user experience in the center of things, however, the financial backing is simply too strong to make it fail because of that “detail”, at least not so quickly. My prediction is that the current meaning of Web3 will simply change and multiply, with the usual (too) many interpretations creating so much (needed) ambiguity so as to be widely used as a marketing vessel to promote virtually anything digital. “Are you Web3 ready?” “It looks so … Web2.0, we need it to embrace Web3”, or “Wow! A true Web3 experience! Great job”. Mark my words. The hype train has just left the station and is coming to any website and software project near you. Will it also bring a significant new business value for the customers and business partners? We’re about to see. That’s why here, at Avenga Labs, we are following the trend with curiosity and openness, despite what seems to be a false start.

Also, let’s not forget about the more pressing Internet issues for the vast majority of us, 2.5 billion users, today. Let’s keep the focus on the people, businesses, and their experiences first, no matter what Internet era number it is and what it means to anyone.