Web3: ‘The Internet of Value’

After the ‘read-only internet’ (web1) and the ‘participatory internet’ (web2), we increasingly see the innovation that its successor ‘the internet of value’ (web3) has to offer. For the first time, we can now record 100% digitally, every issue, every ownership and every transfer of ownership, unambiguously, openly and immutably. Based on a digital proof – a cryptographic token – that records the right to that ownership in a decentralized blockchain ledger. This makes it possible to create a truly digital, uniform standard for property that can be uniquely used around the world. Web3 opens the way to ‘hyper-tokenization’: uniform digital certificates or shares of any asset that instantly and immutably connect to a digital identity and a digital income and/or cash flow.

Tokenization

The innovative thing about web3 is that we can create a digital economy with digitally recorded values, which was impossible until now. With completely new possibilities for digitally capturing, storing, sharing and distributing value and assets. We can suddenly add value to all digital activities. If we specifically searched for something on the Internet, this search history may have value for third parties from which we can make money. Now Google is doing it with our efforts, but how nice it would be to have your search results available as a ‘digital asset’ and to be able to trade with them.

Brave is a browser that already makes the above possible. A privacy-focused, open-source web browser that automatically blocks ads and website trackers by default. And provides the option to enable optional self-advertisement that users pay for their attention in the form of tokens. These cryptographic tokens can then be used on other websites, making you as a user a participant in your own search and web history. Brave already has more than 60 million users and a network of 1.4 million participants who are actively creating content. These are good first examples of what web 3 has to offer us.

Community based

Our Web 2 has grown through the power of centralization, which has allowed the emergence of globally dominant technology companies that wisely sat in the middle of all these data flows. Web 3 focuses on peer-to-peer communication and does not (any longer) have room for central concentrations of power. Spotify has grown by streaming music and thereby gaining power over both listeners and musicians in the middle. A service like Audius is a community and artist-driven music streaming platform that runs on the Ethereum and Solana blockchains. Without central unit.

A place where music artists can freely distribute, stream and monetize their work. This decentralized, open source framework could become the new Spotify, based on a democratized music distribution model. Artists choose how their content is monetized on the Audius platform and retain ownership by generating timestamps for the content. With options ranging from offering free, one-time payment or listing their work as NFTs. Any artist can upload their own music without being registered with a music label. Finally, all users are rewarded with $AUDIO tokens for achieving milestones, such as reaching the top 5 or being on popular playlists, which encourages fan engagement.

Token economy

Because value can now be automatically valued digitally, Web3 makes it possible to ‘transact and settle instantly’. This increases the productivity of money. Instead of having to wait minutes, hours or even days for a transaction to be formally completed, it is now done by the ‘digital handshake’. This will greatly accelerate the distribution of tokens in the coming years. While web1 was passive and ‘read’ only, web2 was limited between as ‘read/write’, now in web3 value is assigned digitally via an immediate ‘read/write/execute’ action. The cryptographic tokens represent programmable assets or access rights, governed by an active ‘smart contract’ and an underlying distributed ledger such as a blockchain network.

Tokens are often issued with just a few lines of code and a simple smart contract. Contrary to what the metaphor might suggest, a token does not contain a digital file at all that is sent from one device to another. The code in the token refers to the aforementioned assets and/or access rights controlled by a network of computers, blockchain network or other distributed ledger. The distributed ledger helps provide a public infrastructure with a distributed record of transactions that keeps track of which wallet address owns which token and is stored on different computers on the network.

From monarchy to democracy

The transition from web2 to web3 is similar to the transition from a monarchy to a democracy. From closed, pyramid-based authority structures to open and flat ecosystems. From closed static chains of contracts based on cash rewards to open collections of smart contracts where rewards are based on tokens. Where participants are not housed in closed, vertically organized organizations, but voluntarily participate in open distributed autonomous organizations (DAOs). And by using cryptography to guarantee the privacy of the user, who can thereby realize an independent sovereign identity (SSI). The basis of web3 is ‘privacy by design’, where data is managed by the owner himself with one device, usually the mobile phone.

Cryptographic tokens are accessed through special wallet software that communicates with the blockchain and also manages the public-private key associated with the blockchain address. Only the person who has the private key for that address can access the respective tokens. Just like you manage a unique key on the front door at home, behind which your privacy is physically protected. But now in a digital, virtual world based on decentralized identification and the use of a ‘seed phrase’ as your own digital DNA. Asymmetric cryptography is the foundation of this key management and is an integral part of token security.

Unprecedented innovation

Web3 opens the door to an unprecedented innovation which digitally finally merges ‘read’ (web1), ‘read/write’ (web2) into ‘read/write/execute’ (web3). A new future for democratizing our internet in a way that was never possible before. Can we finally fix the internet, as Andrew Keen wrote years ago in his book ‘How to fix the future’ with the conclusion then: ‘the internet is broken’.

What is left now is to develop the tools (dApps) needed to manage your privacy, data and assets in this decentralized way as a user. ‘Internet of Value’, where you can securely authenticate without a password and log in based on your protected sovereign identity, without having to give up all your data and privacy. And that way you can confidently start the adventure in the metaverse. See www.digicorplabs.com how we develop these new tools and make them available as practical tools for web3 use. The new, secure internet is closer than many think…

By: Hans Timmerman (photo), Chief Data Officer at DigiCorp Labs and Director of Fortierra

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