Since the emergence of Bitcoin in 2009, decentralization has become foundational in shaping the idea of “Web3” and its promise to deliver a superior Internet to the one we know today.
Decentralization refers to the process of taking power away from a centralized entity and putting it into the hands of the people. Today, the world’s biggest web companies are all highly centralized, controlled by all-powerful executives who get to make all of the decisions, with their primary motivation always being to increase profits.
Unfortunately, centralization has led to some major problems. Over the years, entities such as Facebook, Google, Amazon and Twitter have come to dominate the internet to such an extent that other platforms get very little attention. Instead, businesses and individuals alike have no option but to embrace these services and do whatever it takes to make their content discoverable on these platforms. Otherwise, they will remain invisible to the vast majority of internet users. Because of this, the likes of Facebook and Google have become the gatekeepers of information, restricting what kind of content internet users can access.
Another consequence of centralization is censorship, with the big tech firms able to stipulate exactly what is and what isn’t acceptable on their platforms. Privacy too, is another major issue for many. The big tech firms love to build up profiles of users to make it easier to sell advertisements. These profiles are packed with lots of personal information that people would rather not be made public. They’re stored on computer servers within big corporate data centers. But these data centers aren’t foolproof, as numerous high-profile hacks in the past have shown us. Such incidents can result in user’s social security numbers, birth dates, addresses and other details being stolen and published online or sold to cybercriminals.
Finally, centralization creates highly vulnerable, single points of failure within the internet’s infrastructure. With most websites, applications and services living in the cloud, huge swathes of the internet can be taken offline when things go wrong.
The nascent and decentralized Web3 promises a solution to these problems, delivering platforms that are not run by any centralized organization but rather, by their users, with democratic community governance and blockchain-powered smart contracts to ensure everyone plays by the rules.
The Evolution Of The Web
To understand how decentralization can help to solve these issues, we need to know what it evolved from. The World Wide Web was invented more than 30 years ago towards the end of the Cold War by the computer scientists Vinton Cerf and Bob Kahn, with the earliest, mostly static websites appearing in the late 1980s around the same time as the most basic forms of email arrived.
The Web 1.0 era really kicked into gear in the 1990s with browsers such as Netscape and Microsoft Internet Explorer, which made exploring the internet much easier than before. Static websites still held sway at this time, and it wasn’t until the early 2000s that Web 2.0 finally began to muscle in with the arrival of companies such as Amazon and Google on the scene. With Web 2.0, social interaction became a primary focus, first with websites like MySpace and MSN, and later with the arrival of Facebook, Twitter and others.
The big advantage of Web 2.0 was that it allowed people to do so much more, regardless of their technical skill. It allowed anyone to build an online presence, connect with people anywhere in the world, sell goods and services and create communities.
The evolution of #web3 pic.twitter.com/CWNzVetB41
— Alvin Foo (@alvinfoo) June 8, 2022
Web3 is a new stage in the evolution of the internet that has only become possible with the advent of decentralized technologies like blockchain and cryptocurrencies. Decentralization is the primary tenet of Web3, promising to return power back to the people and nullify the stranglehold of big tech firms like Amazon, Facebook and Google.
Problems With Decentralization
Advocates of web decentralization say it will help to solve the problems around censorship and data security and give people more choice around the kind of content and services they want to consume. That said, decentralization is not without its challenges.
One of the most pressing concerns is the growing realization that many apparently decentralized protocols are actually not that much different from centralized entities. Twitter founder Jack Dorsey famously kicked up a stink last year when he posted this tweet:
You don’t own “web3.”
The VCs and their LPs do. It will never escape their incentives. It’s ultimately a centralized entity with a different label.
Know what you’re getting into…
— jack (@jack) December 21, 2021
Dorsey was referring to the fact that, in a lot of decentralized projects, the power is concentrated in the hands of just a few early adopters. Most new projects need funding to get off the ground, and to obtain this money they generally hold token sales – giving early investors a chance to grab bags of a project’s native cryptocurrency and with that, significant voting rights on the future direction those projects take. Dorsey emphasized this problem last year when he retweeted a claim that “The Ethereum Foundation is bankrolled by their premine.”
Of course, not all decentralized projects are controlled by a handful of individuals. Bitcoin for instance, did not start with an Initial Coin Offering and the tens of millions of BTC held by its creator Satoshi Nakamoto remain untouched. What BTC is in circulation is distributed fairly evenly across millions of users. As a result, Bitcoin is held up to be one of the few truly decentralized projects in existence today.
The issue of security also threatens to throw a spanner in the works of Web3. Decentralization has created loopholes that have allowed hackers and criminals to take advantage of the blockchain to support their illicit activities. Because of the anonymity they provide, cryptocurrencies can be used to hide illicit wealth and to launder the proceeds of crime. The decentralized web also enables marketplaces such as the infamous Silk Road, which has since been closed down. Through the Silk Road, people could buy all manner of illegal things, including drugs and weapons, paying for them with cryptocurrency.
Scammers are prevalent too. The decentralized nature of Web3 means that there’s no one that can be held liable in cases of fraud, for instance when someone is tricked into giving up their private keys and has their cryptocurrency stolen. Lose your Bitcoin and it’s gone forever – there’s no one that can be sued to return it, unless the police manage to do the highly unlikely and track down the person responsible. With the old, centralized banking system, this isn’t a concern as most banks are legally obliged to return stolen funds to account holders.
Solutions Emerge
The good news is that multiple projects have arisen to try and tackle the challenges posed by decentralization. On the issue of security, Manta Network is working to shore things up with the introduction of greater privacy for cryptocurrency transactions. This is key because the transparency of blockchains, which is a feature designed to prevent anyone from hacking the network, also helps to expose individuals to hackers. With the blockchain, every single transaction that has ever been made is publicly visible. This means hackers can easily identify wallets that have substantial funds held within them, making them more of a target. As a result, any business that doesn’t want to leave a data trail their competitors to see is wary of using blockchain and crypto. And it’s an even bigger issue for high profile individuals whose names have been linked to specific wallet addresses.
With any luck, Manta Network’s bid to anonymize blockchain transactions will make life much more difficult for cybercriminals. Manta is building on the Polkadot blockchain, an ecosystem of interconnected parachains designed for different decentralized apps. Its primary focus is on obfuscating user’s wallet addresses through the use of a technique known as zkSNARKs. With zkSNARKs, it becomes possible to verify information publicly on the blockchain without making that data available for anyone to see.
Manta has made a lot of progress recently, receiving a $750,000 award from the Polkadot Pioneers Prize fund to help advance its technology. It has made some practical progress too, partnering with Axelar to bridge its privacy-preserving techniques to other blockchains including Ethereum, Polygon, Avalanche and Terra.
Another core component of Web3 will be the metaverse, which is likely to play a key role in bringing about true decentralization of the internet. The biggest existing metaverses today include virtual worlds such as Decentraland and The Sandbox, but those platforms have been criticized for becoming somewhat exclusive clubs already, with digital real estate often selling for thousands of dollars worth of crypto, excluding many from being able to build there.
This is one of the issues MetaMetaverse is attempting to tackle. It has created a unique platform that allows everyone to build their own virtual world. Within MetaMetaverse, each individual metaverse can function as its own virtual society with unique games, interactive experiences, an economy and community-based governance. Building a metaverse can lead to new opportunities, enabling someone to grow their business through the application of blockchain mechanics, create their own games and experiences and sell them, or chat with friends and like-minded people in a safe, virtual environment.
A prime example is that of the digital artist, who can create a metaverse in MetaMetaverse to showcase their artworks and mint them as NFTs, then sell them to fans without any permission or fees. With a little creative thinking, almost any kind of business venture can benefit from expanding into a decentralized metaverse.
“If you own an orange farm in California and want to get your produce all the way to Maine, metaverse technology can help too,” MetaMetaVerse wrote on Medium. “Now, this isn’t some silly pitch to start selling digital citrus, but a real and useful example. By creating a digital representation of the shipment and having tracking attached to it, you can trace your logistics transparently. Both you and the buyer can see where the shipment is at all times and make sure that they are fresh and on-time.”
What’s key is that MetaMetaverse does all of this atop of a truly decentralized network that provides both the required transparency, and also enhanced security compared to Web 2.0. It also provides a safer environment to share data and easier, faster transactions compared to legacy payment technologies.
Decentralization As A Force For Good
Perhaps the biggest benefit of decentralization is its potential to build a better world for everyone. Through the creation of democratic Decentralized Autonomous Organizations (DAOs), it’s possible for communities of like-minded people to unite under a single goal or ideology and further their aims.
One of the most promising DAOs to emerge in recent months is EarthFund DAO, which has united thousands of people to fund projects that aim to tackle some of the biggest problems facing humanity today.
EarthFund DAO is based on the idea of crypto crowdfunding and seeks to raise money to address a variety of environmental causes. Community members have the freedom to choose which causes they want their donations to address. It’s a platform that aims to bring together activists with a passion for specific causes and community leaders and influencers who can help bring attention to those issues.
With EarthFund DAO, community members can acquire 1Earth tokens that allow them to make proposals about which causes to support and how the funds raised for them should be spent. They can also earn rewards for their contributions. Users are free to suggest raising money for any new cause they wish. Proposals will then be voted on by users, and if approved a dedicated wallet for collecting funds raised through the community will be created. This democratization, which is only made possible through the decentralized nature of EarthFund DAO, is designed to prevent unethical interventions and ensure that any case raised is spent according to donor’s wishes.
To date, EarthFund DAO has already approved two important causes and is actively raising funds to support carbon removal projects and improve access to mental healthcare for people all over the world.
A Better World
The decentralized web is still in its infancy. It has been around for less than a decade and yet it has already made some remarkable achievements in democratizing the internet. While teething problems exist, Web3 and decentralization have led to improved financial and data security, while simultaneously creating new opportunities and giving power back to the people.
With Web3, Financial systems are more accessible and equitable, allowing anyone to make use of modern services and keep their wealth secure and hidden from others. Meanwhile the metaverse is enabling new opportunities for people to expand their businesses, create, connect and transact with others. Moreover, DAOs have become key to building more transparent and democratic communities that eliminate bureaucracy and promote greater fairness.
The world is already a much better place thanks to the rise of Web3. There’s every reason to think it will continue to improve too. Best of all, because Web3 is decentralized and belongs to us all, everyone has the opportunity to play a part in building it.
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