The ABCs of Web3: a New Vocabulary for a New Internet
Web3 might be the next phase of the internet, fully decentralised and dependent on blockchain technology. But what does it really mean for the future of work – and society?
Everything started with Web1, the early internet we all know. Then, social media brought user-generated content, taking us to a 2.0 version of the Web. Nowadays, wherever we look, Web3 seems to be the word on everybody’s lips: the supposed next big thing in tech and a leap forward for the internet. But what is it, exactly?
Sir Tim Berners-Lee, the father of the internet, had coined this term to refer to a semantic web for a machine-to-machine internet. Today, the word Web3 means something slightly different. First of all, although Web3 is still a work in progress, it is being built to be decentralised: not controlled by governments or central authorities. Today, popular websites’ infrastructures are owned by corporations and are subject to some degree of regulation by governments. With blockchain technology, however, a new way of storing data emerged, built around two main concepts.
Encryption: it prevents sensitive information from getting into the wrong hands, and being misused or forged. It means that data stored on a blockchain can be accessed only by those who have permission, even if the data is stored on a proprietary computer.
Distributed Computing: it acts as an additional layer of protection because a file is shared across multiple computers and servers. This means that if one copy does not match all the others, then it means the data in that specific file is not valid.
There are many other important concepts that contribute to the definition of Web3 and the buzzwords around it. When Gavin Wood, co-founder of the ethereum cryptocurrency, first coined the term Web3 in 2014, it sparked a debate on what the future of the internet should look like: open, meaning largely built on open-source software, trustless and permissionless.
Technologists soon found they needed a new vocabulary for a new internet. From metaverse to NFT, these are the definitions to keep in mind and how they may impact the future of work.
Web3
What it means: Unlike Web1.0 (static content) and Web2.0 (user-generated content), both of which were owned and managed by singular entities, the ownership and management of Web3 data and platforms are distributed. Instead of exchanging data to upload content online, in Web3 users can become participants and shareholders by earning tokens on the blockchain system. Powered by blockchain technology and artificial intelligence, Web 3 also means every bit of information would be published on a public ledger of the blockchain.
The upside: In theory at least, this would allow everyone to have a say over how the network is run. For some, Web3 aims to circumvent tech giants such as Google and Meta as platforms and search engines. It would also tackle issues with the handling of user data and online privacy.
The downside: Sceptics, such as Twitter CEO Jack Dorsey and Tesla boss Elon Musk, say Web3 is simply a centralized entity with a different label, an attempt by other tech companies to take over. Whatever the future holds for Web3, the new buzzwords related are here to stay.
NFT (Non-fungible token)
What it means: NFTs are certificates that show who owns a digital item, which can be original versions of artworks, a fashion collectable, or even a piece of land. Like physical goods, they can only be owned by one person at one time. They confirm an item's ownership by recording the details in a blockchain, which is public and stored on computers across the Internet, making it effectively impossible to lose or destroy.
The upside: NFTs offer limitless opportunities in the world of intellectual property. They can be accessed by a global community from a range of global NFT marketplaces that take a minimal (or even no cut). And unlike the standard exchange where agents take a significant share of the profits, NFTs allow everyone, from content producers to video game developers, journalists, musicians or coders, to connect directly with their customers. Each purchase is documented on the blockchain and the recipient and creator are clear. This level of transparency spurs viral communities and fans and can bring about a new era of gig workers – also known as the tokenization of work.
The downside: NFTs are not widely understood and the number of potential buyers and sellers is small. This means NFTs can be very difficult to trade, especially during periods of distress. It also means NFT prices can be highly volatile. Critics also point out that “minting” NFTs has a huge environmental impact, as most NFTs are “minted” by using the proof-of-work consensus method.
Metaverse
What it means: The metaverse had already been in existence long before Facebook changed its name to Meta. Metaverse is a virtual-reality space in which users can interact with a computer-generated environment and other users. It means people can move between digital virtual environments by using headsets or computer screens and has the potential to reshape how people think about work, office space and digital collaboration. Microsoft, for instance, plans to integrate its VR/AR platform Mesh with Teams and hinted at future “immersive spaces” within the videoconferencing app.
The upside: The metaverse may provide those creative and serendipitous moments that videoconference and chat tools simply don’t deliver. With distributed work hubs powered by the metaverse, employees could meet colleagues on the other side of the globe as if they were together. It could strengthen the company’s culture and promote cross-cultural collaboration.
The downside: However, the metaverse may come with challenges. Experts have warned that we must proceed with caution — with some stating that the virtual space could increase division among people, have a marked impact on mental health, distort reality, and lead to an increase in screen time addiction.
DAO
What It means: DAO stands for Decentralised Autonomous Organisation - an organization based on open-source code and governed by its users. DAOs usually have a governance token that allows holders to anonymously vote on which direction a project should go and what developments will be made. They allow projects to pay their developers, give community incentives, and make critical decisions in a decentralized and democratic process.
The upside: This technology might pave the way for flatter organizational structures. They're also not constrained by location. People who take part are scattered all across the globe and all interactions are digitally native, whether that's communication or how to work together. It also impacts the way people get paid and how to pay others using digital assets, including cryptocurrencies.
The downside: DAO can make the world flatter, more flexible and digital-first. However, there are some downsides. One of the major cons is that making decisions is time-consuming and thus these organizations are slower to operate as there is no one controlling entity. Also, as the community is growing larger, it is not that rare for disagreements to appear which may cause splitting from one into two companies. Such was the case with Bitcoin and Bitcoin cash.
Smart Contracts
What it means: A smart contract is a mechanism involving digital assets and two or more parties. For a transaction on a blockchain network to take place, a smart contract ensures the policies to execute an exchange of information are satisfied. For example, if a car sales transaction system runs on a blockchain application, rules would be established to constitute a successful transaction. If these rules are not met, such that the customer’s credit history does not meet the requirements, the application would trigger an alert and the transaction attempt would be automatically denied by the parties on the blockchain.
The upside: Smart contracts are potentially useful for everything from standard financial transactions, like executing trades to processing insurance claims and organizing mortgages. They are already being used in many industries. In the Utilities industry, smart contracts are governing the distribution of energy. In healthcare, blockchain and smart contracts can also be used to ensure the safety of a patient’s medical records, and to administer proper medication and appropriate tests on patients. Supply Chain management is likely to change profoundly as well with smart contracts making inventory easier to manage.
The downside: With smart contracts, there is no central authority managing the exchange. While this is beneficial for several reasons, it means that if a person is conned, there is little that can be done to reverse the action. There is little government regulation for smart contracts and it is difficult to intervene in case of a scam or fraudulent activity. To a small degree, this limits smart contracts’ ability to be widely accepted and used for large-scale agreements.
As Web3 continues to shape the future of work, organizations need to step up to reap the benefits of the new internet, without jeopardizing their identity and culture. Start building your own operating system to fully manage your distributed company from anywhere, anytime. Sign up for our waiting list to get the first release of our product.
