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What is Web 3.0 and how does it work?

February 1, 2023

14 min

What is Web 3.0 and how does it work?
Beginner

Each phase of the Web has shaped technology and society, giving online users more and more tools and possibilities. Let’s explore what has changed throughout the history of the Internet and what Web 3.0, the third phase that awaits us in the future, is all about.

The origin of Web 3.0: Internet and Web 1.0

Today, the Internet is almost a primary need, a service that is taken for granted and that pervades our days. Before we understand what Web 3.0 is, let’s trace back to the origins of this technology: it was not created for public use, but was born to be exploited in the military, just like cryptography.

Polemos [War] is both father of all and king of all: it reveals the gods on the one hand and humans on the other, makes slaves on the one hand, the free on the other” – Heraclitus

It was during the Cold War, and especially after the launch of Sputnik into space, that the US Department of Defence began to invest in research projects to find new communication systems. This mission was first taken over by researcher Paul Baran and was later entrusted to a dedicated research group called ARPA. If you have read the history of Internet domains, this name will be familiar to you.

ARPA, between 1967 and 1972, created the first computer network, using telephone lines. The ARPANET network connected different computers of universities and institutes participating in the project. ARPA continued its innovative work by creating (in 1973) the TCP/IP protocol, which researchers used to implement a public network. In practice, TCP/IP is the union of two fundamental Internet protocols that enable communication: the Transmission Control Protocol (TCP) and the Internet Protocol (IP). In a nutshell, the servers hosting the contents of web pages are recognised by an IP address, so that browsers can locate them and connect to them via TCP.

Fun Fact

The term internet was first used in 1974 as an abbreviation of ‘internetworking’. We can find it in documents presenting how the TCP/IP protocol works.

After years of development under predominantly military direction, the US National Science Foundation decided in 1992 that the Internet would not be a government service. An attempt at decentralisation, which, however, could only be realised by Web 3.0. In any case, from then on, access to the internet would be offered by dedicated companies: the commercial internet providers we know today, technically called ISPs (Internet Service Providers).

This event, together with the invention of the World Wide Web, brought the Internet to the stage of commercialisation. In particular, the global ‘WWW’ network was created by Tim Berners-Lee, a CERN researcher, in 1991. To the TCP/IP protocol, Tim added three fundamental tools for ‘Web 1.0’ and the Internet in general:

  • HTML (HyperText Markup Language), the formatting language of the web.
  • URI/URL (Uniform Resource Identifier or Locator): a unique address for locating resources on the web. It is the ‘link’ to online sites, a string that includes the Internet domain.
  • HTTP (HyperText Transfer Protocol): the protocol for retrieving the contents of Internet pages from servers, cooperating with TCP/IP.

Web 1.0, the first phase of the Internet, was designed for information sharing, mainly within the scientific community, and the experience was essentially ‘passive‘. Early users could not interact with Internet pages or edit them, but simply read and observe static images and text. Exclusive consultation defined Web 1.0 as ‘read-only’ and, to this end, the first browser, Mosaic, was created in 1994, later copied by Netscape, the first public company among the protagonists of the famous dotcom bubble.

When the bubble burst in 2000, public opinion thought that the web was a passing phenomenon with no real future. At the time, only 6.7% of the world’s population had access to the Internet. Many companies went bankrupt, but the technological advances achieved during the bubble remained.

Fun Fact

Innovation as a consequence of a speculative bubble is not a unique phenomenon. During and following the gold rush, it was not so much the miners who made money, but the traders who sold them shovels and picks and developed new mining solutions.

Thus, companies began to use the first APIs, to develop applications on the Internet, and Ward Cunningham invented wiki pages, i.e., editable by anyone. The wiki model finally transformed the ‘read-only’ internet into the ‘read-write‘ internet of today: Web 2.0, characterised by the creation of content by users, even without any commercial purpose.

What also motivated the advancement of technology in these years was the extreme need to simplify transactions, through what would become e-commerce. But that is another story, let us rather continue ours, which will lead us to discover what Web 3.0 is.

Web 2.0: Big Tech and Big Data

Since 2004, the most disruptive changes in the history of the internet have taken place. Access to the web has shifted to mobile devices, images are the medium that has become increasingly important and social media have created a sort of metaverse; a parallel reality in which everyone can participate, share and interact. In a word: Web 2.0, a term coined by Tim o’Reilly to indicate the second phase of the Internet, where the flow of information has 2 channels. User Generated Content (UGC) adds content creation to simple reading, making the web a dynamic ecosystem.

The ubiquitous spread of Internet technology, which is now available to (almost) everyone, has nevertheless given fertile ground to criminal activities, which attempt to target online subjects. To recognise them, you can read the article on Phishing and Ponzi Schemes.

Another component that changes the paradigm of the web is the control by centralised entities, such as ICANN that manages the DNS, and the monopoly of the Big 5, or Big Tech: Alphabet (Google), Amazon, Apple, Meta (Facebook) and Microsoft. The influence of these giants is obvious, so much so that they could censor different types of information online; for instance, on Meta’s social networks users can be arbitrarily banned, just as Google’s search engine algorithm ‘decides’ which news items to show on the front page.

Google and Meta, moreover, often use this hegemony on Web 2.0 for their own profit. This is also because Internet users do not accept that they have to pay to search for information or sending e-mails, so the providers of these services have to find another way to earn revenue. The solution for them is therefore to collect as much user data as possible and sell it to other companies, which are then able to make predictions of various kinds. The worst case of this has been Facebook-Cambridge Analytica, whereby information of 87 million members of the social network was allegedly leaked, which was then exploited to conduct analyses and favour Donald Trump’s election campaign in 2016.

It is no coincidence that we often speak of Big Data in this context, because Big Tech deals with huge amounts of data, relating to almost anyone with access to the internet.

Big Data

Data sets of such volume, variety and generation rate that they exceed the processing capacity of traditional data analysis software.

Big Tech, therefore, are potentially able to control any data shared online by their users, thanks to their role as providers for storage space, email, social accounts, software, streaming, e-commerce and many other tools we use daily, to which we leave our data shadows. Other Web 2.0 companies have also had to adapt to this new standard where ‘knowledge [of their behaviour] is power [over users]’, helping themselves to tools, now regulated, such as cookies.

Shadow data vs Data shadow

Shadow data refers to that stored by a company outside its structured, secure and up-to-date system, and consequently not protected from third parties. Data shadow, on the other hand, refers to the set of data ‘traces’ that a user leaves behind through their daily online actions.

The result of this model is an often unequal exchange of value between companies and users, as in the case of the Facebook-Cambridge Analytica scandal or the more recent TikTok scandal. The oligopoly exercised by the other members of the Big 5 (Apple, Amazon and Microsoft) is less problematic because people more readily accept the idea of paying for software, hardware and basic necessities. Although they do not shy away from the practice of collecting data, at least for their own internal use, they have not historically based their primary business on big data. In any case, control of information is not the only problem of Web 2.0 that motivated the development of Web 3.0.

Web 2.0 problems beyond data

The more or less legitimate collection and processing of data is not the only controversial aspect of Web 2.0 and in general of a centralised Web.

The companies behind social media have often been accused of manipulating public opinion through censorship measures and the creation of the so-called filter bubble through algorithms for personalising the experience. 

Secondly, it is clear how the centralisation of Web 2.0 is a weak point in cases of failure of any of these Big Tech-dependent services. You will surely have experienced this in the past: when a popular service is down, it is as if the voice of the world is switched off, slowly forming a murmur on alternative channels.

It is these alternative channels that can become the solution and the new normal of Web 3.0.

What is Web 3.0?

Web 2.0 saw the advent of smartphones, social networks and ‘cloud’ technologies, but the second phase’s sense of ubiquity, i.e. the ability to access the Internet from anywhere and from any device, also characterises Web 3.0. The third phase of the Internet, however, also opens up to the concept of parity, relying on decentralised networks, distributing computing power (edge computing) and information sources (Internet of Things). The third phase of the Internet ‘understands’ search intentions, organising information in a human-like manner, which is why it is also called the ‘semantic web‘: the logic of the Internet will be entrusted to artificial intelligence, which will actively ‘learn’ thanks to machine learning.

The form that Web 3.0 will take is, however, not yet certain. The first theory of an ‘intelligent’ Internet, which binds resources according to their meaning, dates back to 2006: it was again Tim Berners Lee who coined the term Web 3.0, after having created the WWW itself. This idea concerned only the ‘semantic’ aspect, which we will explain in more detail later, but over time it has undergone various integrations: in addition to those already mentioned, Gavin Wood proposed the application of blockchain technology to the Internet, creating the concept of Web3. This is not an alternative to Web 3.0, but rather a declination of it, linked to the concept of decentralisation and content ownership.  

The Semantic Web

Web 3.0, according to Tim-Berners Lee, is a network of meaningfully linked information: each resource would have ‘metadata’, defining its semantic context, so that it would be aggregated according to its content. In a nutshell, browsers will no longer show results based on ‘keywords’ but will really understand what the user is looking for and wants to know. This is only possible by equipping the Web with artificial intelligence, capable of reasoning like man, i.e. capable of ‘Natural Language Processing’. Let’s go deeper with this and other technologies that explain in more detail what Web 3.0 is (and will be).

Artificial Intelligence and the Internet of Things

Artificial Intelligence (AI) will answer complex questions accurately and quickly, selecting the most relevant and quality content, recognising and excluding so-called ‘fake news’. AI applications with which you may already be familiar include chatbots (such as ChatGPT), advanced search engines, virtual assistants (Siri and Alexa), machine translation and many video games where you can play ‘against the computer’.

The possible applications of this technology are almost endless, all the more so if we consider the machine learning component, used in AI to allow software to learn by itself and self-perfect. In this way, Artificial Intelligence will also be able to identify relationships, patterns and models, so as to ‘predict‘ user behaviour and anticipate its consequences.

Devices that have AI built in, such as cars, drones, smart burglar alarms, digital assistants, are elements of the Internet of Things: a distributed network of devices that collects information and interacts.

The main challenge at the moment is to make AI applications able to learn and self-update, as they currently need human intervention. Artificial intelligence also implies huge amounts of available data, as well as their processing according to complex algorithms: this requires increasing scalability.

Edge computing

Precisely in response to the need of processing increasingly big data, we now speak of edge computing.

Edge computing is a technical term for something we already know, namely that it is our smartphones, cars, computers, smartwatches, tablets, etc. that process the data they generate, constituting a kind of ‘decentralised supercomputer’. Before the swarming of network-connected smart devices and the Internet of Things or IoT, however, there was only talk of cloud computing.

Cloud computing consists of a single cloud service provider, to which devices are connected in a hierarchical and centralised structure. It is the provider that processes the data generated by the connected devices; when it merely stores information, it is referred to as cloud storage.

Edge computing in comparison results in a much more decentralised structure, as data processing is delegated to the ends of the system, i.e. the individual devices. This speeds up processes, reduces data traffic and fewer problems in the event of connection interruptions.

The system that will result from these three constituent elements of Web 3.0 will thus probably be decentralised at the level of data processing, but will remain essentially centralised from the point of view of data providers, control and ownership.

What is Web3?

Web3, as anticipated, is an ‘internal movement’ of Web 3.0: it refers to a completely decentralised version of the Internet, in which the full potential of blockchain is leveraged, so that users can own and control their personal data, digital assets and digital identity. The environment that will be created will be trustless and permissionless: truly anyone will be able to participate in it, without the need to trust intermediary authorities, being part of a peer-to-peer structure and no longer client-server. Finally, the software of the new internet will be essentially open-source: this is already possible, because anyone can ‘build’ new applications on crypto codes.

What defines Web 3.0 is, then, no longer the ‘read-write’ combination, but the ‘read-write-own’ triad: a vision that can only become a reality through DLT and the resulting solutions such as NFTs, Dapps, DAOs and cryptos.

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