The Future of the Internet or ‘Ponzi Scheme’ – What exactly is Web3?

Some call it the next phase of the Internet. Some say it’s a quick money scam that will go bust. But what exactly is Web3?

The phrase “Web3” is widely used to refer to a the new age internet which will run on blockchain technology for record keeping, a decentralized public accounting system. The current iteration of the Internet, Web2, by comparison, runs on centralized, company-owned servers.

WHAT IS?

Web3 “offers a read/write/own version of the web where users have a financial stake and more control over the web communities they belong to,” allowing users to own their data, according to Harvard Business Review.

Investors hope that this version of the Internet will lead to democratization of data on the web, where transactions and contracts can be re-verified by all users. However, users should be skepticalaccording to venture capitalist Joe Lonsdale, as mainstream products have yet to materialize despite serious cash investments.

WATCH PALANTIR CO-FOUNDER JOE LONSDALE EXPLAIN WHY HE FEELS WEB3 IS A ‘PONZI SCHEME’:

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“A lot of what people are calling Web3 was a Ponzi scheme and it didn’t make any sense,” the Palantir co-founder previously told Fox News. “However, decentralized ownership protocols are very interesting.”

Decentralization, a key feature of blockchain, distributes the responsibilities of key Internet functions such as server control, transaction confirmation, and timestamping to a network of users rather than traditional methods where all operations will be carried out by one company or organization. Where it almost hosts something like Amazon Web Services servers 30% of the internet in 2020, Web3 promises to distribute this responsibility between users, fundamentally changing online interactions.

Decentralized digital infrastructure — such as cryptocurrency such as Bitcoin and non-fungible tokens (NFTs) — are designed to be key components of Web3 and would be necessary for it to function.

WHY DOES IT MATTER?

“In the longer term, it makes sense to have more decentralized power and to have something like bitcoin,” Lonsdale said in a previous interview. Bitcoin “allows more freedom of the financial system from really bad governments”.

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Meanwhile, Elon Musk expressed skepticism about Web3.

“I don’t think web3 is real – it seems more of a marketing buzzword than a reality at the moment,” Tesla boss tweeted last year.

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Twitter founder Jack Dorsey also questioned the new age internet.

Users “don’t own” web3 “,” it tweeted last Decemberthrowing cold water on the idea that users will be able to monetize their data online.

Dorsey worked on a a competitor to Web3which claims on its website to be “an additional decentralized web platform”.

To watch the full interview with Lonsdale on Web3, click here.

Bradford Betz contributed to this report.