Web3 is hard to define, but it is, most certainly, NOT the metaverse. GlobalData defines the metaverse as a virtual world where users share experiences and interact in real-time with simulated scenarios. Experiences (and monetizing those experiences) are central to the metaverse. In contrast, Web3 is born from ideology and relates to the underlying infrastructure of the next iteration of the internet. Web3 will rely heavily on blockchain technologies and will be designed by communities. Though the metaverse and Web3 are different, there will likely be some overlap (if either of them takes off in any real, meaningful way).
When talking about Web3, you may also hear web3.0, semantic web, decentralized web or internet, and even spatial internet. The concept is still quite loosely defined as it undergoes rapid development and instead may be easier to think about in relation to previous versions of the internet. Web1 in the 90s heralded the democratization of information. Web2, the era we are in now, is characterized by more centralization of the internet, with big companies like Google, Meta (formerly Facebook), and Microsoft at the heart of our online interactions and gatekeeping our data.
Internet with a conscience?
Web3 is a reaction to the gatekeeping of the internet by a handful of companies. It promises to be decentralized, hand control back to users, and be a sort of ‘internet with a conscience’ with lots of it running on blockchain technologies. Web3 will run extremely transparent decentralized apps (dApps) – transparent because anyone can read the code underlying an app or protocol, provided they know how to read Solidity, Vyper, Simplicity, or whatever other languages the source code is written in, of course. This does mean that some nasty surprises can be hidden in plain sight.
Get your skin in the DAO
So if Web3 is decentralized, who owns and operates it? Many Web3 companies and startups are run and financed by decentralized autonomous organizations (DAOs), which operate like a company controlled directly by its shareholders without the need for employees or directors. But, crucially for legal reasons, a DAO is not a company, and the owners of the DAO are not shareholders.
The people involved with DAOs argue they have skin in the game as they are emotionally, as well as financially, invested. Members control the organization and decision-making by voting. The existence of different voting systems is obvious but often overlooked. DAOs allow people to organize and fund projects to benefit the community they’re building, allowing business and operating models to be redefined and carefully designed. This does sound a bit like tech utopia, but voting systems can, of course, be gerrymandered, rigged, or swayed. Without checks, DAOs could be an efficient outlet for scams and fraudulent behavior and a place for bad actors to organize and become more powerful.
Prepare for Web3 takeoff?
Like the early internet, Web3 will be complicated for a while, with users unsure of how everything works – and that’s ok. Most people using (centralized) apps like Instagram or TikTok on their phones don’t understand 5G technology, and they don’t have to. The same will be true of Web3 if and when it takes off.
Web3 fanatics will advocate that the infrastructure is a means of reducing the reliance on Big Tech and handing back control to users. However, a broader question remains: will there ever be a critical mass of users that know and care sufficiently that their data, and indeed their attention, is being commoditized to learn how to operate swarms of decentralized apps, rather than relying on a handful of companies for all online interactions and fuelling profits?