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 web 3.

In working towards the decentralized world of web 3, it's important to understand where we've come from, where we are now, and what work lies ahead.

Once upon a time in Web 1

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 we had access to a world of information at our fingertips. Looking back, it seems primitive, but we should not discard the revolutionary nature of the network that came together to form what we now call Web 1.

Considering the history of the internet, the two major contributions of web 1 were

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

Enter Web 2

Web 2 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 us, as users, to engage in a more meaningful way with the internet. Through the platformization of the services we used, we could move from the era of 'read-only' web to one where we could 'read and write' and begin to digitize our 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 web 2 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, we can see the major contributions of web 2 are

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

Growing to Web 3

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 us to take a more active role in the applications we use. With tokenization we 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, we 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 we look back on the evolution of the internet, we should expect to see Web 3 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 web 3

  • 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

  • We should be able 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 Web 2 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 we are still working our way into web 3. We're figuring out what it means to remove trust from a single organization and pass it on to a group. We're debating between different models of authentication, tokenization, control, buisness, infrastructure and much more. Some of the things are are needed for a decentralized web 3 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 web 3 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 we 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.