You can still ride the wave of Web 3

In 2022, many crypto skeptics gleefully viewed the FTX collapse as the industry’s Lehman Brothers. Yet, nothing could be further from the truth. While the details leading up to the collapse are still emerging with court proceedings, it seems clear that crypto wasn’t to blame for the disaster.

If anything, it was traditional business abuses, including fraud, commingling of funds, and investor deception, that really led to the bankruptcy of this centralized exchange. This also reminds us of the fundamental value proposition of decentralized finance and the new ecosystem that is being steadily established - Web3.

When the internet was first developed, there was a consensus among enthusiasts: this would be a revolutionary new technology. The internet was destined to change the way we communicate, work, and even play. This utopian vision has largely been realized. However, as our dependence on the network has increased, we have also become accustomed to some of its less desirable aspects, from data breaches to election interference. The internet is not the safe paradise we imagined. But what if there was a way to start over? What if we could build a new version of the internet that is secure, decentralized, and democratic, through which people can monetize their data, the content they produce, and even the time they spend on the internet, instead of being owned by a few technological monopolies?

This is exactly the Web3 pipe dream, but what will it take to make it a reality?

Global macroeconomic trends are approaching a tipping point. Or in other words, something has to be done. The current environment of over-leveraged debt, skyrocketing inflation, insecure supply chains, and the concentration of data and economic value generated by Internet users around the world is not a sustainable environment.

The world certainly needs a “great reset”, but one that returns power to ordinary citizens. Web3 is about creating new sources of value, and alternative ways to generate and store that value.

Simply put, Web3 is the third generation of the Internet, built on the idea that the Internet should be characterized by a decentralized network of computers rather than a centralized network. This means there will be fewer single points of failure and fewer central institutions and intermediaries that control the flow of information or economic value.

This is not to be confused with the metaverse, which refers to a parallel world based on virtual reality. Web3 focuses on blockchain technology and the new infrastructure built on it, including digital identity, smart contracts, and decentralized applications (dApps).

Web2.0 is a centralized and non-interoperable network, while Web3.0 is the exact opposite, decentralized and interoperable. The main goal of Web3 is to establish a new ownership system and even lay the foundation for a new financial system. This can be achieved through NFTs (non-fungible tokens), which can be bought and sold as products or services with cryptocurrencies through the blockchain that constitutes the infrastructure of Web3.

According to Grand View Research, the global Web3.0 blockchain market size was valued at $1.36 billion in 2021 and is expected to expand at a compound annual growth rate (CAGR) of 44.9% between 2022 and 2030, representing revenues in the sector expected to reach $33.53 billion by the end of the decade.

So, what’s wrong with Web2, or in other words, what problem will Web3 solve? In his book Who Owns the Future, Jaron Lanier coined a term called “Siren Servers” to describe the centralized data collection that characterizes much of the structure of Web2.

Lanier believes that there is a growing problem of ordinary Internet users being disenfranchised from the online economy. By convincing users to provide valuable information about themselves in exchange for free services, companies can amass vast amounts of data at almost no cost. These companies are called "Siren Servers," an allusion to Ulysses's siren. Rather than paying every participant and contributor of data, Siren Servers concentrate wealth in the hands of a few who control data centers.

Not only do these data centers extract value from individuals, they also concentrate control of previously competitive industries (such as advertising) in the hands of one or two companies, including Meta (formerly Facebook) and Google, to the detriment of some key democratic search engines, such as free media, which rely on advertising revenue.

The potential applications of Web3 thinking go far beyond simply changing the monopoly problems of Web2. Blockchain and digital assets promote the establishment of community-centric economic incentives. This represents a major shift from previous technological advances, as developers and content providers will be able to directly benefit from the consumption of their products. In the world of Web3, stakeholders will also be more directly involved in the governance of basic products and networks.

Over time, this integration could even extend to traditional industries, with the use of blockchain technology enabling fractional ownership of previously illiquid assets, such as real estate.

However, this revolution will not happen overnight. People may live in a hybrid world of Web2 and Web3 for some time. Many companies that currently only have a website or application and live in the Web2 world will gradually start to migrate their digital identities to Web3.

By definition, cryptocurrency exchanges will be early adopters of Web3 technology. Given that the assets that can be traded on exchanges are essentially Web3 tokens, exchanges can even be seen as a gateway for Web2 players to enter the Web3 space.

However, we cannot be complacent and think that Web3 will only bring solutions without its own problems. Since Web3 will promote a completely new economic incentive model, it will inevitably generate new ethical issues and moral risks.

The lack of centralized oversight or regulatory clarity for Web3 will inevitably raise concerns about issues such as privacy and data breaches, copyright infringement of NFTs, and ICO scams and theft.

New problems always emerge with the wave of technological progress, but this should not stop us from exploring how to push development to new heights. The decentralized world of Web3 is coming to us, and if all goes well, Bit.com Exchange will provide users with a secure and efficient trading platform to help them easily enter this new world full of potential.