Is ‘Web3’ simply another fancy name for VCs to use instead of ‘Blockchain?’
Last month, former CEO of Microsoft and current head of development at Neo, John deVadoss, wrote a text criticizing the concept of Web3. deVadoss argues that the word is a marketing ploy by “VC types” and adds little value to the already existing term “blockchain.”
He writes in an article for Cryptoslate that part of the reason for its stickiness is that governments dislike the term “crypto.”
Neo was originally founded as Antshares in 2014. John previously spent nearly two decades at Microsoft, developing platforms such as .NET and Azure. In his view, Web3 is “more nonsense than sense.” Its fashionable status is due in part to the “hoi polloi” on Twitter and LinkedIn who embrace the concept of “associating with what they see as the next big thing.”
The term Web3 has been around for over two decades. But it exploded in popularity in late 2021, with notable figures like Elon Musk starting to talk about it. According to Google Trends, interest in the term has fallen by about 25% since its peak in December 2021. However, November 2022 began a downward trajectory from which it has not recovered at the time of writing.
What is Web3?
The definition of Web3 depends on who you ask. But the first use of the word Web 3.0 was way back in 1999 by Sir Tim Berners-Lee, the inventor of the World Wide Web. His definition was also known by another moniker: “Semantic Web.” Berners-Lee’s configuration envisioned a future where all computers would be able to intelligently analyze all data on the internet, with “machines talking to machines.”
The intelligent analysis would be enabled by tags, web structures and shared vocabularies, definitions and standards that would make all data on the web machine-readable. The W3C, or World Wide Web Consortium, an organization headed by Sir Tim Berners-Lee, still champions this Web3 definition to this day.
However, the most popular definition of Web3 is the one first used by Gavin Wood, founder of Polkadot. In 2014, Wood used the term to describe a third phase of the internet. One that was more decentralized and less dominated by the surveillance capitalism of Big Tech. Wood, who is also one of the founders of Ethereum, envisioned this third phase as powered by blockchain, or distributed ledger technology (DLT). By making value and information exchange more secure, efficient and transparent, Wood has argued that Web3 will lead to significant social and economic change.
Web: A trustless web?
Last year, Wood told CNBC’s ‘Beyond The Valley’ podcast that Web3 could enable a trustless internet. “We have to trust the people behind the services.”
In his vision, trust would be replaced by algorithms and blockchain-based smart contracts. One of the aspects of Ethereum distinguished it from Bitcoin. “So it’s like it’s very peer to peer, right? … The idea is that all the participants are kind of contributing a small part of the ultimate service,” Wood said.
“And so nobody really has any advantage over anybody else … not in the same sense, at least as you know, when you go to, say, Amazon or you go to eBay or Facebook, where the company behind the service has really absolute power over what it is they do when they provide the service.”
The definition is still disputed
Wood’s definition has attracted a lot of attention and criticism, especially since its peak in popularity in December 2021. In that month, Elon Musk called the term “more marketing than reality”, which is not even that controversial. Most of its proponents admit that Web3 is more of a journey than a destination. And with blockchain-based services still taking up a fraction of internet traffic compared to their Web2 counterparts, it’s not necessarily wrong either.
Musk has also called the space ‘BS’ in response to a tweet from OpenAI CEO Sam Altman.
One of Musk’s Twitter CEO predecessors, Jack Dorsey, is another who isn’t buying the hype. Despite being a Bitcoin maximalist, the Silicon Valley hippie has more nuanced views on the potential of Web3. On Twitter, he argued that Web3, far from being revolutionary, had the same corporate incentives as its traditional alternative.
Speaking to BeInCrypto, Arie Trouw, Co-Founder at XYO & CEO, believes that the term ‘Web3’ can be useful if used correctly. Unlike Web2, the Web3 model can allow users to control and monetize their own data without the Big Tech intermediary. “Web3 is the key to disrupting today’s systems that fail to serve the majority of Internet users,” says Trouw. “Web2 led to the rise of large technological entities that gate our data. However, the new internet will enable us to swing from centralization to an open source model.
Last year, Berners-Lee spoke at an event in Lisbon, and laid out his vision for the internet. He said: “It’s a real shame that the actual Web3 name was taken by the Ethereum people for the things they’re doing with the blockchain. In fact, Web3 isn’t the web at all.”
Web3 and Crypto are not the same
Another pitfall of the term Web3 is that it is so deeply associated with cryptocurrencies. While both are apparently based on cryptography and blockchain; they are far from synonymous. The collapse of crypto giants such as FTX and Celcius has also increased people’s reluctance to use the term.
“I think the word ‘crypto’ has become somewhat tarnished, as the mainstream thinks of it as synonymous with get-rich-quick schemes and financial crime,” Trouw continues. “Some people even refer to it as ‘C’- the word that shouldn’t be uttered Terms like “Blockchain,” “Self-Sovereignty,” and “Zero Knowledge” better describe the innovations happening in the space, though none are as sexy as “Crypto.”
Gavin Wood himself has tried to create distance between the two terms, but for different reasons. The need to trade with one of the thousands of native tokens can unnecessarily complicate people’s entry into Web3. “I suspect that currency will continue to play a role in services. But I think… overall, we’re going to start seeing services delivered without the need to use tokens,” he told CNBC. “And I think that’s coming to be a big leap.”
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