Covering Disruptive Technology Powering Business in The Digital Age

Written by: Martin Dale Bolima, Tech Journlisst, AOPG.

Depending on who you ask, the so-called Web3 is either a big deal or merely a buzzword. Forrester Research seems to believe in the latter, and that it’s likely to fizzle out in time. The analyst firm recently released two papers to support this notion—”Web3 and Web 3.0 Are Synonymous Today—But This Wasn’t Always True” and “Web3 Promises a Better Online Future But Contains The Seeds of a Dystopian Nightmare“—broadly suggesting that Web3 is not exactly what its proponents are touting it to be.

What is Web3? Is it Really the New Internet?

The so-called Web 3.0, erroneously believed to be a relatively new term, was first used in the 2000s by Sir Tim Berners-Lee to refer to his vision of the semantic web. Over time, however, Web 3.0 was shortened to simply Web3, and its meaning shifted from referring to the semantic web to being the umbrella term for anything related to decentralisation, blockchain, metaverse and NFT.

Mainly, Web3 is just a fancy term for a decentralised internet—one where blockchain, encryption and distributed computing enable internet users to share data and files across multiple computers and servers and not just on infrastructures built by tech monoliths such as Google, for example. In this way, the online world, in theory, will continue to exist even if these tech giants were to shut down operations.

Among other things, Web3 is being hyped as potentially reimagining the internet and, along with the metaverse, ushering in a persistent 3-D environment that can provide unified experiences in the digital world. It is also purported to make the internet of tomorrow—delivered using public blockchains and fuelled by token economies—much more for the people, of the people, with users getting more control of their data and big tech companies losing their years-long monopoly of the internet.

Sounds good, right?

Turns out, it might be too good to be true.

And if it is too good to be true, it probably is not true.

The Pipe Dream That is Decentralisation

The search for something better is human nature. But Web3 might not be the answer—at least not for anyone looking for an alternative to the Internet as presently constituted. And that is largely because the promise of Web3 is way too utopian but hardly grounded in reality.

Take, for example, the concept of decentralisation, which is great in itself. But is it really possible? Forrester’s analysts do not think so, and reality bears out this analysis. Consider Ethereum, whose activities will grind to a halt—or at least slow down considerably—should RPC node providers Infura and Alchemy cease operations. Even the NFT marketplace, which is supposedly democratised, is dominated by OpenSea and, to a certain extent, the “community-owned” Rarible, and they can decide almost unilaterally and arbitrarily to intervene in transactions.

These are not exactly hallmarks of a decentralised system. They tout decentralisation and promise democratisation but the execution is that of centralisation, where services largely depend on and revolve around several providers. That system—control distributed to multiple “smaller entities rather than just two or three large ones—is, in theory, better but it is not decentralised, and it will be unless more people actually acquire the know-how needed to partake in blockchain and actually put in the time to review rule changes, pore over transaction records and similar activities.

That happening is not entirely impossible. All it takes is a few thousand tech-savvy individuals and groups to create an impactful inflexion point that will “decentralise” the internet—but only to a certain degree. It is, however, improbable because it is hard. In fact, Dan Hughes, cryptographer and creator of the Web3 business Radix DLT, once said in an interview with Bloomberg that adopting Web3 can be too “complicated or unsafe to use.” This is not exactly an endorsement of Web3 but more of an indictment of it.

The Promise of Control and the Folly of Money

Central to decentralisation is the idea of internet users assuming control not only of their data but also of the apps and networks they are using (otherwise known as the “techno-utopian desire”). It sounds good in theory but in practice, it might not be what the majority would want, given the technical know-how necessary to do that and the time commitment it will require. Besides, the internet now, while imperfect, has worked for the past how many years already, and it is a status quo that maybe not many web users are ready to disrupt just yet.

Small wonder that Forrester does not anticipate Web3 giving users that kind of encompassing control. Worse, the Forrester report underscores the possibility of a dystopian eventuality—one that will happen if the online communities running the apps and networks in Web3 become fragmented and have disputes, potentially leading to caving in of critical Web3 networks and systems.

And that happening is a very real possibility. That possibility grows exponentially when the financial component of Web3—as in smart contracts with financial provisions, for instance, or NFT transactions or the billions of dollars venture capitalists are allotting for Web3—is factored in. Fair assumption or not, problems inevitably arise when money is involved, and these problems might prove catastrophic for a system still trying to establish a solid foundation.

“Until the financiers turn off this cash spigot, Web3 hype will continue and get-rich-quick schemes will crowd out worthier developments,” Forrester warns in “Web3 Promises a Better Online Future But Contains The Seeds of a Dystopian Nightmare.” “We’re already seeing the same trends of monopoly building, exploitation, and value extraction that Web3 enthusiasts blame for tainting the existing World Wide Web.”

Guarded Optimism

While the benefits promised by Web3 are too good to be true, there might actually be something there to be excited about. That is the position Avivah Litan, VP Analyst at Gartner, takes in a blog about Web3—but with a caveat, of course.

“Web3 innovations will take the internet into new realms and give rise to applications not previously possible,” wrote Litan back in February. “But Web 2.0 still has advantages in terms of scale, customer service and customer protections. Potential Web3 risks include lack of customer protections, new security threats (a consequence of an increasing attack surface) and a swing back to centralised control, so organisations will want to shore up governance and risk management before replacing Web 2.0 applications.”

In other words, Web3 can potentially be the internet’s new frontier, opening up exciting possibilities for everyone, everywhere but not now—at least not yet. It may get its time in due time but as of now, it is prudent and best to play the long game with Web3.

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