- [Narrator] Web3 is the newest buzzword
taking over the tech and venture capital world.
And if you've found yourself wondering what it means,
you're not alone.
Web3 is seen as the third generation of the internet,
a decentralized online ecosystem based on the blockchain.
- Web3 represents kind of a new philosophy
about how to realize these technologies
in a more distributed and democratic way.
- [Narrator] Venture capitalists have invested billions
into this vision, but some tech experts are unconvinced
that Web3 could scale globally.
Skeptics like Tesla CEO, Elon Musk,
have called it a marketing buzzword.
- A lot of the skepticism about web 3.0 comes from the fact
that it's early expressions are fairly primitive.
- [Narrator] As experts debate
whether or not this new version of the web
can become a reality,
here are some of the underlying principles
behind the vision for Web 3.0.
(keyboard clicking)
To better understand Web 3.0
and what sets it apart from the web we use today,
you have to go back to the early days of the internet,
what experts now refer to as Web 1.0.
Most of the participants were content consumers
who were limited to navigating
through individual static web pages.
- Web 1.0, for those who remember,
was just, you know, raw HTML
and lots of very simple web pages,
and it wasn't really controlled by anybody.
- [Narrator] This was a more decentralized version
of the web, meaning anyone who knew how to code
could build on it from their own computers.
But at this time only a small number of users
had the technical skills to create and publish content.
Then came Web 2.0,
which is the stage of the internet we're living through now.
Web technologies like JavaScript and HTML5
made the internet more interactive,
allowing startups to build platforms
like Facebook, Google, Amazon and many others.
For the first time, anyone could publish content online
even if they couldn't code.
- Web 2.0 is this modern, centralized verse of the web.
You know, we're all sharing things on social media
which are owned by, you know, only two or three companies,
and we're all using Google Search.
- [Narrator] These companies own and manage
the data collected from their users,
and they frequently track and save this data
and use it for targeted ads.
- What's at the core of their business model is data.
- [Narrator] Olga Mack is a blockchain lecturer
at UC Berkeley, and is optimistic about Web3's potential
to reshape the internet.
- The data economy, where the user generated content,
whether it's a conversation or a video,
that is an exchange for services.
And so there is a perception
that this monopoly of data could be abused.
- [Narrator] Here's where the vision for Web 3.0 comes in.
The term Web3 was first coined by one of the creators
of the Ethereum blockchain, Gavin Wood.
In a 2014 blog post, Wood envisioned Web3 as an open
and decentralized version of the internet.
Theoretically, users would be able
to exchange money and information on the web
without the need for a middleman,
like a bank or a tech company.
In this vision for a Web3 world,
people would have more control over their data
and be able to sell it if they choose.
And it would all be operated
on a decentralized, distributed ledger technology.
The most common version of this is known as the blockchain.
While still considered relatively new and unproven,
it could offer more transparency and autonomy for users.
- The computers that are actually
doing that computing for you or storing that data,
anyone could own those computers,
anyone can become a part of that blockchain.
And so it's not Facebook and Google's computers doing that.
- [Narrator] With a single, personalized account,
users would theoretically be able to move seamlessly
from social media to email to shopping,
creating a public record on the blockchain
of all that activity.
But how exactly would Web3 remain operational
if it's not controlled by a central corporation or entity?
Theoretically, people would be given virtual tokens,
or cryptocurrencies, to incentivize them
to participate in the operation of Web3.
A central element of the system
is so called DEFI, or decentralized finance.
- And the idea is that if you can issue a token
for everything in the universe,
if you can financialize every possible interaction
of computers and software and humans,
then you can create this vast ecosystem of cryptocurrencies
which can be traded,
which can be valued relative to one another.
- [Narrator] Still, it's unclear
how this decentralized token system would be regulated,
how it could operate on a large scale,
or even how well it would distribute
control of the internet.
Critics of the idea like Twitter co-founder Jack Dorsey,
called Web3 "a centralized entity with a different label."
- Developers who really dug into this
think that the underlying blockchain structures of Web 3.0
are very insecure, not decentralized as promised,
they're actually as centralized as previous technologies.
- [Narrator] Some see Web 3.0 as a critical building block
IN creating the metaverse, an immersive online world
where people can use avatars
to socialize, shop, work, and play.
But others say Web3 and the metaverse
are two very different concepts.
- Because the Metaverse is being hyped a lot right now
and Web3 is,
there are some companies at the intersection of the two,
like let's create a metaverse
that, you know, somehow it's connected to the blockchain.
- [Narrator] Right now, Web3 is still very much
an abstract concept with little real-world foundation.
Skeptics, like engineer and blogger Stephen Diehl,
argue that web 3.0, doesn't have the computing power,
bandwidth, or storage to work on any practical level.
- For skeptics of Web3, their argument is that,
you know, tokens and cryptocurrencies in general
are just a giant bubble,
and as soon as it pops, in their view, all of this nonsense
about how that's going to build the next internet
will go away.
- [Narrator] While it remains to be seen
whether or not Web3 will become a reality,
the philosophy behind it is driving billions in investments
in the venture capital world,
funding a vast ecosystem of decentralized internet services.
- So there's so much real-world money
going into building Web3 startups
that even if, as a concept, it proves unworkable,
we're gonna be hearing about it for a long time yet to come.
(gentle music)