Explain Web3: From blockchain and crypto to NFTs and metaverse

Last week on Twitter, Jack Dorsey trashed the trending tech trend known as Web3, tell consumers to beware and dismiss it as a tool for venture capitalists cryptocurrency. Tim O’Reilly, the author who coined the phrase Web 2.0 in 2004, also warned this month that it is too early to get excited about Web3. Time Magazine’s Person of the Year, Elon Musk, simply said, “Web3 looks like bs.”

Is it? Web3 is tech’s most popular buzzword. Yet the term is amorphous and evolves rapidly, its meaning often changing depending on who is talking about it.

Used by enthusiasts to describe the next phase of the internet, Web3 is characterized by Internet services and mobile applications reconstructed on decentralized blockchain technology. It often includes a wide range of emerging technologies such as cryptocurrency, DAOs, and digital assets such as NFTs or non-fungible tokens. Some enthusiasts also associate the game, metaverse and augmented and virtual reality with Web3 because some virtual worlds rely on blockchain-based digital assets.

“Web3 is the manufacturer and user-owned Internet, orchestrated with tokens,” Chris Dixon, general partner at venture capital firm Andreessen Horowitz, said in an article posted on the company’s website.

Web3 advocates like Dixon say relying on blockchain technology will force businesses to be interoperable and “give users property rights: the ability to own part of the internet.” Skeptics, however, argue that because VCs are so heavily invested in bitcoin and the mechanisms that Web3 is based on, their advocacy for decentralized technology from a user perspective is misleading. Says Dorsey, Web3 is “at the end of the day a centralized entity with a different label.”

Okay, what does this mean to you? CBS News asked tech experts to explain the basics of Web3 and why – or if – it’s important.

What is driving the hype?

Facebook’s rebranding to Meta in October, along with the tech giant’s renewed support for cryptocurrency, likely pushed Web3 ideas about blockchain and decentralized tech into the mainstream, said. Brian McCullough, host of the “Techmeme Ride Home” podcast.

“Web3 is a repackaging of some particular technology,” McCullough told CBS News. “The blockchain has fallen into a kind of cul-de-sac of tech culture and consumers have grown weary of the hype. Traditional crypto never became a currency; NFTs have become this cult thing; and virtual reality has been “the next big thing” for decades. Web3 is a brand that has brought all of these ideas together into a plausible whole. “

McCullough says Web3 is hot now because Silicon Valley influencers like Dorsey and Musk and Andreessen Horowitz and other venture capitalists started talking about it after the Facebook pivot. “The technology is not new,” he said, “but the marketing is”.

Designed for business, “not for consumers”

Ignore the Web3 hype and focus on commercial technology, said Bill Detwiler, editor of TechRepublic. The core blockchain technologies that power Web3 are “real and powerful and designed for the business, maybe not for the consumers.”

In our current technology paradigm, said Detwiler, we think of the cloud as companies like Amazon, Google, Microsoft, and Oracle providing data storage, computing power, and software as a service. Gavin Wood, founder of Ethereum and pioneer of Web3, envisions a new economy built around the blockchain where individuals can provide services directly to each other, where no single entity owns or controls the system, and where the ability to exchange valuables inherently exists within the system.

But revolutionary decentralization? It’s a long way off, Detwiler said.

“Wood’s vision will require greater social, political and economic changes. Companies today are using blockchain to track how lettuce travels from farm to supermarket,” Detwiler explained. “It’s not revolutionary, but it’s real.”

Marcus Estes, founder of cannabis distribution company Chroma Signet, agrees that Web3 technology is designed for businesses, not consumers. “We use the public blockchain to help small cannabis companies launch limited edition products in specific neighborhoods in Detroit,” he explained. “We couldn’t do this with the previous web technology because we are offering an unauthorized solution enforced by the blockchain, not by people. It is an evolution of open source business models. “

At the end of the line

Musk, Dorsey and other big tech founders may have their own reasons for hype or attacking Web3, said Drew Olanoff, startup analyst and former TechCrunch VC reporter. “It’s fun to watch them practice on Twitter, but I don’t take it seriously.”

“I collect athletic jerseys and I get the allure of collectibles,” NFT said, Olanoff said. “In the future it might be revolutionary, but I doubt it. Web3 is just a marketing discourse. Web 2.0 was the same.

Podcaster McCullough agrees. A new form of cryptocurrency could indeed become the currency of the metaverse, he noted. “NFTs and digital items could be our clothes, our identities, our status signifiers. And virtual reality could be more than just a side aisle in the game. That would be cool, but it’s not reality,” he explained. “At the moment, Web3 technology is still primitive. It’s plausible that blockchain technology with AR and VR could become the next big thing, but not today.”

About Perry Perrie

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