How the Web3 reinvents the Internet

By Shermin Voshmgir

Part 1 Web3 Basics

Tokenized Networks: Web3, the Stateful Web

• Has the potential to revolutionize agreements and value exchange
• Centralized data structures raise issues of security, privacy, and control of personal data and produce many inefficiencies along the supply chain of goods and services
• Web2 allowed us to enjoy peer-to-peer (P2P) interactions globally, but always with a middleman: a platform acting as a trusted intermediary between two people who do not know or trust each other. However, these internet platforms also dictate the rules and control the data of their users.
• The Web3 reinvents how the Internet is wired in the backend, combining the system functions of the Internet with the system functions of computers.

Blockchain: A Stateful Protocol

• State refers to information, or the status of “who is who?”; “who owns what?”; and “who has the right to do what?” in a network.
• Stateless protocols like the current Web only manage the transfer of information, where the sender or receiver of that information is unaware of the state of the other.
• While session cookies provide better usability, these cookies are created and controlled by a service provider, such as Google, Amazon, Facebook, your bank, your university, etc., whose role is to provide and manage the state of their user.
• Instead of decentralizing the world, Web2 platforms contributed to a re-centralization of economic decision making, R&D decision making, and subsequently, to an enormous concentration of power around these platform providers.
• Web 1 - information economy (Hello World), apps: web browsers, search engines
• Web2 - platform economy (Frontend Revolution), apps: Wikipedia, social media, and e-commerce
• Web3 - token economy (Backend Revolution), app: token
  • Frontend remains the same, but the data structures in the backend change. Anyone can participate in verifying transactions and be compensated for their contribution with a network token. Agreements are executed on the fly and P2P with smart contracts. Web3 applications need a connection to a distributed ledger, which is managed by a special application called “wallet.”
• Advertising on platforms - users are paying for services with their private data

Other Web3 Protocols

• A blockchain network is simply the processor for decentralized applications that operate on top of the Web3. It serves as a distributing accounting machine recording all token transactions and performing computation.
• Blockchain networks are not at all ideal for storing data - too slow and expensive to store large data sets; and storing plain-text data blockchain networks doesn’t allow for “privacy by design.”