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In December 2021, Elon Musk tweeted that “Web3 sounds like bs”.
This is frustrating for a few reasons. First: because of all the massive hype and grand claims that Web3 will revolutionize the world, it is building a reputation that it will change the very fabric of our lives and make all the current issues of the web simply disappear. These extravagant claims on Web3 are set up for guaranteed failure. Second: this overhype is already causing people like Mr. Musk to—with good reason—dismiss the entire concept. But if you look past the hype and exaggerations, what you are left with is something truly amazing, something that as it evolves will change the way we interact with the web and with each other. Web3 has a lot to offer, and even though it is very early in its life cycle, is already making substantial impacts to those who are finding use cases.
It might be helpful to sort through the hype by discussing what Web3 actually is, and how it compares to Web1 and Web2. Once we have a better understanding of the concept, we can start to see where it is emerging on platforms that are actually using it today, and where the technology might evolve as it becomes adopted into the mainstream.
First, what exactly is Web3? Depending on who you listen to, Web3 is about a thousand concepts, capabilities, and ideas. Similar to “AI”, “quantum”, and “robotics”, Web3 is often misunderstood and can seem almost magical to those who aren’t actively involved with it. To understand it, let’s look at earlier evolutions of the Web. The “Web1” is what is known as the “static internet”; if you can picture the websites for businesses that look like someone took their tri-fold brochure, digitized it, and gave it a URL, you’re picturing Web1 exactly. It was a platform for broadcasting static information to others, often used by businesses to give customers basic information about what they did, what their hours were, and where they were located. Web2, sometimes called the “social internet”, evolved starting around 2005 when websites started incorporating more interactive features like users being able to post, chat, or comment. As the concept of an “app” developed, social media platforms took the idea further, but even standard websites nearly universally have some sort of posting, comment, rating, or feedback mechanism where users don’t just take in the site’s information, they can actively participate.
So where does Web3 come in? Similar to Web2, Web3 didn’t just turn on one day and is here. The new evolution of the web is in its infancy, which is why its definition is still somewhat fluid and often misunderstood. It’s been called the “curated internet”, and also the “personalized internet”, with a key feature being AI-driven actions that intelligently provide users with the content they want. This is part of it, and is evolving continuously and largely behind the scenes as sites are able to get smarter when they recommend new content for you. However, the biggest element of Web3 is its decentralization, with blockchain as a driving force behind it.
Chris Dixon, general partner at venture capital firm Andreessen Horowitz, has developed a concise definition: “Web3 is the internet owned by the builders and users, orchestrated with tokens.”
With this in mind, let’s examine three key areas where this new evolution of the Web is making an impact, and specific use cases where we see the effects.
Gaming: Kawaii Islands
Like a number of emerging blockchain-based gaming platforms, Kawaii Islands utilizes a Play-to-Earn (P2E) model. Their token (KWT) is used as an in-game currency, but they have a marketplace where users can sell items they’ve bought or earned in the game in a decentralized, peer to peer format. The game also includes different ways for players to farm, design and make digital outfits, and perform other tasks that can earn them tokens. The P2E model utilizing a platform’s crypto token is a trend with a huge appeal to users and game developers alike, as the ecosystem is geared toward using some of the revenue to entice players with rewards for participating, which makes the game much more fun for those playing and keeps the circular economy turning.
User Generated Content: Envision
Similar to Kawaii Islands, the platform Envision has transformed a traditionally centralized model into a peer-to-peer model. Envision is a stock content platform that allows content creators of photos, videos, etc., to display their work and offer it for sale. Customers looking for stock content can search or browse for exactly what they need. Instead of the platform controlling ownership, costs, and taking the majority of the fees, Envision allows the creators full ownership of their work, allows them to set their own prices, and only takes a small fee as payment for hosting the platform. Transactions are made in the platform’s token which helps invigorate the ecosystem and creates opportunities for user-based governance.
Perpetual Creator Royalties: CXIP
For artists who want to sell their work, an emerging method within the Web3 environment is to mint that work as an NFT. This allows proof of ownership, and links the artwork to a smart contract to facilitate payment and ownership handoff when it is sold. It even allows trustless NFT rentals without the obvious risk of a stranger just not returning the item. CXIP is a platform that works with artists by providing “Minting as a Service”, meaning they help convert the artwork into an NFT, complete with the smart contract to sell/rent the item. Though not fully decentralized, CXIP offers an additional value to artists through its ability to ensure perpetual royalties to the original creator when the NFT changes ownership. Basically, if the creator sells the NFT, they are paid for it. If that owner then resells the NFT, a small royalty fee will be paid back to the creator as well. Though a number of platforms offer this as well, CXIP may be the only platform with a smart contract that can work across exchanges. Other platforms only offer perpetual royalties if the subsequent sales occur in their marketplace, which often does not happen.
Now that you understand Web3 a little better, and can see some concrete examples, you will start to be able to separate the hype from the genuine innovations. As you see more and more platforms making use of the technology that is bringing Web3 to life, you will see that our interactions online are changing into a more decentralized, empowered experience. And as you conduct your first P2P sale of something you created, or earn money by playing a game you love, perhaps you’ll see that Web3 is not, in fact, just “bs”.
The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.