Web3: The bull case for the Internet Computer

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The next wave of innovative applications, business, digital personas, finance, and entertainment will be built on decentralized infrastructure. Their creation will come from the community, for the community and further will be controlled by the community. Such are the promises of Web3.

Once upon a time in Web1

In the 90's, surfing the web often entailed getting over-excited the sound of a dial-up internet connection and the count of results from early search engines. For the first time the world had access to information like never before. Looking back, it seems primitive, but the revolutionary nature of the network that came together to form Web1 should not be discarded.

Considering the history of the internet, the two major contributions of web1 were

  • The creation of the network itself
  • Read access - users access and read materials from a select bunch of early internet contributors.

Enter Web2

Web2 will largely be remembered as the iteration of the internet that introduced social media, advertising, and digital content in general. Web2 brought many great applications that enabled users to engage in a more meaningful way with the internet. Through the platformization of services, users moved from the era of 'read-only' web to one where they could 'read and write' and begin to digitize their lives.

With more and more information being created and stored on the web, questions of security and privacy became much more prevalent. Two of the greatest contributions to Web2 were TLS (which allows information to flow across the internet in an encrypted manner) and the Signal protocol (which allows end-to-end encrypted messaging (in the Signal app, Whatsapp, and Facebook messenger, to name a few.)) While these security advances provided greater integrity for data flows on the internet, it was left to the discretion of centralized organizations to implement and use them, if and when they chose to. While information flows may not be visible to the public, large amounts of data are visible to the owner of the platform. This means that the core of the services and applications on the internet remain in the hands of a few organizations, rather than with the users who provide and consume the content.

Furthering the history of the internet, the major contributions of Web2 are

  • Monetization of apps
  • The possibility of security and privacy
  • Read and write access

Growing to Web3

Web3 aims to overcome the issues found in web2 by removing the central point of trust and shifting control to the people who build, contribute to, and use the internet and its services. There are a number of ways in which this can be achieved, but the most promising is by leveraging decentralization of information and computing offered by blockchains.

It has become widely know that blockchains support tokens, often in the form of cryptocurrencies, but other tokens are emerging which enable users to take a more active role in the applications they use. With tokenization, users can move to a 'read, write and own' iteration of the internet.

An important point to note is that in the transition to web3, to truly overcome the pitfalls of web2, users should aim to build applications that are decentralized at every point in the stack. If any part of developing, operating, or governing is not decentralized then it remains the case that there is a single party who can control our use of the dapp.

When looking back on the evolution of the internet, it's expected to see Web3 contributions as

  • Integrating identity
  • Systems with native payments
  • The incubator for the birth of DAOs (Decentralized Autonomous Organizations)
  • The read, write, and own model of the internet.

Identity on Web3

  • Users should be able to use a dapp without requiring tokens: no entrance barrier with Internet Identity
  • Internet Identity - allows to interact with dapps without the need for tokens

The rise of DAOs

  • It should be possible to easily tokenize dapps so that users can participate in ownership, success, and governance, while developers have a sustainable way to raise funds
  • Network Nervous System - allows users to stake tokens, and earn rewards for participating in governance of the Internet Computer
  • Service nervous system - allows developers to easily tokenize dapps to raise funds, giving ownership to the users, and to crowdsource decision making

Native payments

One suggested reason why Web2 ended up being so centralized is that there was no native system for making (micro and/or web) payments. This made it difficult for digital creators and entrepreneurs to build a business without relying on large centralized organizations and platforms to build upon. Given that decentralized applications are generally built on blockchain platforms, it's often the case that there is a native token and payment mechanism. This eases the flow of funds between peers.

The ease of token/fund transfer, coupled with the formation of DAOs makes it substantially more convenient to raise funds to start a business and grow different types of economies.

Decentralized Future

Right now the world is still working its way into Web3. The industry is figuring out what it means to remove trust from a single organization and pass it on to a group. Builders are debating between different models of authentication, tokenization, control, buisness, infrastructure and much more. Some of the things are are needed for a decentralized Web3 are

  • Automation & upgradability - Currently, even given the rise of DAOs and digital liquid democracy, it is often the case that decentralized decisions are passed on to a single authority to execute the decision. Trust removal falls at the final hurdle. For a true Web3 experience, DAOs should be, as their name applies, autonomous. Read more about the Network Nervous System of the IC.
  • Interoperability - As the ecosystem grows it becomes increasingly important to maintain interoperability between applications and chains in s secure (i.e. bridge-free) manner. Read more about Bitcoin integration.
  • Censorship resistance - it should be the case the users have the right to write, the right to read, and the right to own.
  • Accessability - * Developers should be able to build dapps that are fully onchain. It should be the case that a dapp can serve content directly into users browser. The operational cost of running a dapp should be comparable to running a web2 application (e.g. on AWS). Read more about Canister smart contracts allow to serve webpages without the need for centralized services.