Tech
Explaining Web3: From blockchain and cryptocurrencies to NFTs and the metaverse
Last week on Twitter, Jack Dorsey criticized the buzzy tech trend known as Web3, telling consumers to be wary and dismissing it as a tool to advertise venture capitalists cryptocurrency. Tim O’Reilly, the author who coined the phrase Web2.0 in 2004, he felt it again this month too early to get excited on Web3. Time Magazine’s Person of the Year, Elon Musk, simply trolled: “Web3 sounds like bullshit.”
AND? Web3 is technological hottest buzzword. Yet the term is amorphous and rapidly evolving, its meaning often changing depending on who speaks about it.
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Used by enthusiasts to describe the next phase of the Internet, Web3 features internet services and mobile apps rebuilt ON decentralized blockchain technology. It often includes a broad spectrum of emerging technologies such as cryptocurrency, DAOif digital assets like NFTss, or non-fungible tokens. Some passionate also join gameTHE metaverse AND augmented and virtual reality with Web3 because some virtual worlds rely on blockchain digital resources.
“Web3 is the Internet owned by builders and users, orchestrated with tokens,” said Chris Dixon, general partner at venture capital firm Andreessen Horowitz, in an article about the company’s business. website.
Web3 supporters like Dixon To say on which to build blockchain the technology will force companies to be interoperable and “give users ownership rights: the ability to own a piece of the Internet.” Skeptics, however, argue that because VCs are so heavily invested in bitcoin and the mechanisms underpinning Web3, their advocacy of decentralized technology from a user perspective is disingenuous. Dorsey said Web3 is “ultimately a centralized entity with a different label.”
You don’t own “web3”.
VCs and their LPs do. He will never escape their incentives. Ultimately it is a centralized entity with a different label.
You know what you’re getting yourself into…
— jack⚡️ (@jack) December 21, 2021
Okay, what does this mean for you? CBS News asked tech experts to explain the basics of Web3 and why, or if, it matters.
What’s driving the hype?
Facebook’s rebranding as Meta in October, along with that of the tech giant renewed support of cryptocurrency, probably gave a boost to Web3 ideas about blockchain and decentralized technology in the mainstream, said Brian McCullough, host of the “Techmeme Ride Home” podcast.
“Web3 is a repackaging of some particular technologies,” McCullough told CBS News. “Blockchain has hit a sort of dead end in tech culture, and consumers have grown tired of the hype. Traditional cryptocurrencies never became currency; NFTs became a cult thing; and virtual reality was “next” great news “for decades. Web3 is a brand that combines all these ideas into a plausible whole.”
McCullough says Web3 is popular now thanks to Silicon Valley influencers like Dorsey and Musk and Andreessen Horowitz and other venture capital firms started talking about it after Facebook’s pivot. “The technology isn’t new,” she said, “but the marketing is.”
Made for business, “not for consumers”
Ignore the Web3 hype and focus on enterprise technology, said Bill Detwiler, editor in chief of TechRepublic. THE main blockchain technologies that Web3 power is “real, powerful and made for the businessmaybe not consumers.”
In our current technological paradigm, Detwiler said, we think of the cloud as companies like Amazon, Google, Microsoft and Oracle providing data storage, computing power and software-as-a-service. Founder of Ethereum e Web3 pioneer Gavin Wood predicts a new economy built around the blockchain where individuals can provide services directly to each other, where no entity owns or has control of the system, and where the ability to exchange items of value exists inherently within the system.
But revolutionary decentralization? That’s a long way off, Detwiler said.
“Wood’s vision will require broader social, political and economic changes. Today, companies use blockchain to track how lettuce gets from the farm to the 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 public blockchain to help small cannabis companies release limited-edition products in specific neighborhoods in Detroit,” he explained. “We couldn’t do that with previous web technology because we’re providing a permissionless solution enforced by blockchain, not by people. It’s an evolution of open source business models.”
Bottom line
Musk, Dorsey and other big tech founders may have their reasons for doing so advertising hype OR attack Web3, said Drew Olanoff, a startup analyst and former TechCrunch VC reporter. “It’s funny to see them work out on Twitter, but I don’t take it seriously.”
“I collect sports jerseys and get the fascination with collectibles” like NFTs, Olanoff said. “It could be revolutionary in the future, but I doubt it. Web3 is just marketing talk. Web 2.0 was the same.”
Podcaster McCullough agrees. A new form of cryptocurrency could actually become the currency of the metaverse, he noted. “NFTs and digital objects could be our clothes, our identities, our status markers. And virtual reality could be more than just a side alley of gaming. That would be nice, but it’s not reality,” he explained . “At the moment, Web3 technology is still primitive. It is plausible that blockchain technology together with AR and VR could become the next big thing, but not today.”