This article is a continuation of the explanation of the evolution of the internet regarding Web1 and Web2.
If you’re not familiar with the meaning of Web1 and Web2 or would like to learn more, you can click this link.
Did you know that your online profile is sold 376 times a day? Welcome to the world of Web3, the new era of our shared online existence, a place where you regain control over your own data and reclaim your privacy.
In this article, we lift the veil on Web3 and clarify the principles behind this technological evolution. We will examine both the evolutionary benefits and the lessons we’ve learned from Web2. This approach offers you, the reader, a solid understanding of what Web3 is and why it represents a logical step forward in the development of the internet.
Crypto and Web3 are not the same. The origin of crypto dates back to 2009, when Bitcoin was introduced in response to a crisis, the financial crisis of 2008. That crisis was resolved by printing more euros and dollars to fill the holes in the financial system. By increasing the money supply, the value of existing money decreased. You and I, as consumers, who hold the same amount of money, are significantly disadvantaged by this.
This was seen as unfair. A group of tech enthusiasts developed a concept aimed at improving this system, one in which everyone plays by the same rules and where money cannot simply be printed.
A key element of this concept is self-custody: everyone manages their own money, removing the central role of banks, the culprits of 2008. This concept is entirely digital and introduces something unprecedented: online ownership rights. For the first time ever, you can be the sole owner of something online. No middleman, no provider, no central authority, just you and your wallet. While similar to an account, your Bitcoin wallet is entirely yours, unlike, say, a Facebook account, which belongs to Facebook.
Since the introduction of Bitcoin, you’ve been able to transfer and own value online, via the blockchain, a technology that verifies ownership and transactions.
Thus, a new financial instrument was born, unlike anything we’ve seen before.
The birth of Bitcoin
After a period of experimentation and development, a new blockchain called Ethereum was introduced in 2015. Don’t worry, Bitcoin still exists and operates independently of Ethereum.
With Ethereum came a new blockchain capability: the storage and transfer of data, in addition to value. This is a major extension of Bitcoin’s functionality.
Furthermore, Ethereum allows for the programming of smart contracts, enabling developers to build both applications and products directly on the Ethereum blockchain.
This massively expands blockchain’s potential. In the years that followed, we saw many more blockchain developments aimed at addressing the shortcomings of the internet and offering users tangible improvements.
Thus, the Web3 vision emerged, one that focuses on a fair and verifiable web.
Importantly, most blockchains store actions decentrally, meaning that everyone can view these actions and no one can change them. This guarantees transparency and a verifiable truth for you as the end user.
The Evolution Toward Web3
To understand Web3’s benefits, you first need to grasp the flaws of Web2. For over two decades, Web2 has allowed a small group of tech giants, Google, Apple, Facebook, to gain control over the majority of online data and therefore immense power.
These companies simplify internet usage, for example, when you sign in to a new site using your Google or Facebook account. Because this happens on a massive scale, these companies collect your data continuously and build a digital profile of you. This profile often knows more about you than you do yourself. As mentioned at the beginning of this article, this profile is bought and sold on a huge scale.
“If you’re not paying for the product, you are the product.”
Privacy is a sensitive issue in Web2, as is trust. The digital world often asks for our blind trust without providing a solid basis. Web2 lacks the tools to verify the authenticity of information, making the internet fertile ground for fake news, false profiles, and fraud.
Companies also struggle to securely manage online data. Sensitive information often becomes publicly accessible. A crucial issue here is that the storage and ownership of data lie with third parties, meaning you must simply trust them to handle your privacy with care.
Web2-based supply chains suffer from lack of transparency, inefficient communication, and data manipulation risks. Trusting every party in the chain is often unfounded, leading to incorrect product deliveries, falsified information, and broken agreements.
In the supply chain, every link MUST trust the next, but often without justification.
The gaming industry exemplifies Web2’s issues. Although players drive the industry’s success, in-game items belong to the corporations, not the players. This limits user control and ownership.
The final and most critical Web2 flaw is the lack of provable ownership online.
For example, imagine you have a digital file, like a concert ticket or prescription, and send it over the internet. In Web2, the file isn’t truly moved, it’s copied. This means multiple copies of your file may exist on various servers, clouds, and devices.
How do we determine who the real owner is? In a Web2 world, that’s a complex question because the system isn’t designed to guarantee true ownership.
Web3 has its own major players, with Ethereum being the most prominent. With a market value of over $200 billion, Ethereum ranks among the world’s top 50 companies by valuation. Unlike Web2 corporations, Ethereum is user-controlled, you can vote and participate in its development, making you both a user and co-owner.
In Web3, you can choose whether to stay anonymous or opt in for things like personalized ads, and if you share your data, you get fairly compensated.
A verifiable internet is more important than ever. Since late 2022, Artificial Intelligence (AI) has exploded in popularity. While AI can generate vast amounts of content quickly, verifying its sources is nearly impossible.
Web3 solves this with the blockchain, which is ideal for data verification. A match made in heaven.
Truth > Trust
Web3 enables every action in a supply chain to be tracked. For example, if a Dutch supermarket receives a shipment of rotten bananas, and the supply chain is blockchain-based, every link is recorded. The supermarket can pinpoint where it went wrong.
This drastically reduces fraud because the truth is recorded and tamper-proof.
Web3 transforms gaming by giving ownership of in-game items to the players. These items can be freely traded in open markets, giving players more power and a bigger stake in game development.
Web3 directly solves the challenge of online ownership verification. Through blockchain, ownership is recorded as unique digital assets, like your files, tickets, or prescriptions. These can’t be copied or altered, making transfers secure and fraud-resistant.
Web3 is the next evolution of the internet, centered around transparency, fairness, and provable online ownership.
You’ve just read about the birth of Web3, which aligns with the founding roots of Fortera. After nearly a decade of tracking these developments and investing in multiple initiatives as angel investors, we launched a regulated investment fund in 2022, Core Fund, registered with the Dutch Authority for Financial Markets (AFM). Through this fund, we invest in Web3 for a variety of investors, from individuals to family offices.
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