Web1 to Web3: There's nothing permanent about the Internet

I landed a job interview with a media house that had sensed an opportunity in those early dotcom days. I was called to the hallowed floor where senior executives sat in their wood paneled rooms. The executive with a booming cheerful voice asked me about the difference between the Internet and the newspaper. I said that the Internet was more interactive than a newspaper. That’s all I understood about the Internet at the time.

My answer was good enough to secure the job. I guess that was how the business world viewed the Internet in those pre-Google days. The promise of ‘interactive’ stuck, as brick-and-mortar businesses experimented with websites. We chatted on ICQ and AOL instant messengers and argued about the world on message boards. The Internet though excruciatingly slow, was refreshingly irreverent. It felt as though no big entity was in charge. Yet no one understood it as decentralized. There was no context of the monopolistic platform play yet.

Soon the dotcoms crashed after a lucrative ride, and social networks rose to eventually grow into digital behemoths. Once algorithms started to orchestrate our lives, those good old days of the decentralized Internet turned into childhood nostalgia.

The Internet was originally born out of a desire to share resources within DARPA, the research wing of the US Department of Defence. The early intention of the founding scientists was largely unselfish. Vint Serf the co-inventor of TCP/IP, the protocol that allows machines and applications to communicate over a network, has revealed that in the early days, people wanted to share information because they thought it may be useful for someone. But it was largely driven by technology and software experts, and most users had little to contribute.

The industry slowly transformed into Web 2.0. Ordinary netizens started to engage deeply and contribute content. Eventually, online resources started to gravitate towards a few influential platforms and the rest as we know is history. It didn’t take long for us to view the Internet as centralized and controlled, which set off the quest for the next iteration of the Internet. The industry started to look back at where it started, and in a sense return to the original idea of the decentralized web.

Today, the term Web3 is being touted as the new online paradise where netizens operate in a utopian democratic set-up. Blockchain technology provides the underlying fabric that works on consensus, while non-fungible tokens drive the online economy.

Decentralized alternatives are slowly emerging for every major app. Most of them are based on the notion of peer-to-peer services. Decentralized storage services use unused storage on users’ computers. Diaspora is a decentralized social network project that is not owned by anyone and uses individually owned nodes. Similarly, Mastodon is a social network made up of servers operated by individuals and organizations.

There is a lot of fuzziness surrounding Web3, such as resolving the complex problem of digital identity. The concept of verifiable decentralized identifier (DID) has emerged, which is not controlled by any digital overlord. DIDs are considered self-sovereign because users have control over their unique identifier.

Today, our digital identities are dependent on centralized registries, identity providers, and certificate authorities. DIDs have instead been designed to be independent of such entities and as such are considered a building block of the decentralized web. Control of the identifier is proven using cryptography. This can now be used for a range of functions like login and digital signature.

This also means that the DID is your sole identifier. If you lose its private key, you lose access forever. If the DID is compromised, the exposure of your online activities is complete. In this way, the decentralized web almost feels binary in nature. Usability is harder for those who are not as tech savvy, which is reminiscent of the early Internet days. Regulatory oversight could be tough for content moderation.

As we try to wrap our heads around these new concepts and services, many like Elon Musk are not convinced about Web3. Twitter founder Jack Dorsey claims that his idea of Web5 is more decentralized and user-friendly than Web3. Can Web3 ultimately prevent market consolidation? I would wager that the need for economies of scale makes some amount of market consolidation inevitable.

The Internet was always meant to be diverse, self-organizing and spontaneous. Yet there is nothing permanent about this state. The pendulum will keep swinging between centralized and decentralized Internet. Rogue actors will keep trying to game the system. There will be a tradeoff in terms of individual leverage versus user experience, security versus usability, ownership versus interoperability.

There will never be a perfectly balanced Internet. Ultimately, it is about who controls what. This is the problem that the industry is trying to solve. Regardless of how this happens, we will move towards a more decentralized Internet in the foreseeable future.

Shalini Verma is CEO of PIVOT Technologies and co-founder of climate tech startup NurtureAI. She tweets at @shaliniverma1