The Difference Between Web 2 and Web 3

Crypto gives us the option to truly own our money. But what is this magic internet money, if not encrypted data? Indeed. And so, the crypto revolution not only holds the promise of owning our money – but owning all our data and sharing them with who we please. The umbrella term for this new iteration of the web is Web 3. Let’s see how it differs from the not-so-good-old Web 2.

What is the difference between Web 2 and Web 3? Web 3 is a reaction to Web 2: the internet that coalesced towards a handful of giant companies reigning over user content and data. With Web3, it becomes possible to control and financially benefit from our own content, money, and data.

An Example of a Web 3 Application: Brave Browser

Before going into the comparison of subsequent iterations of the internet, let’s dive in with an example of a Web 3 application that has been gaining traction in the last few years: Brave browser. This will instantly make some differences clear.

It all starts with logging in. To log in on Web 2 platforms like Google or Twitter, your username and password are paired and stored on the server of the platform. The problem with this is that it makes you as a user vulnerable to each website you have an account with to keep your credentials safe. 

With a web 3 browser like Brave, it has a built-in crypto wallet – or you can use a plugin wallet like MetaMask. In any case, you log in with your crypto wallet credentials. This is a first huge step forward from the classic login model. You control the keys of your online identity! (this creates by the way some potential problems. For instance, does it also mean, not your keys, not your identity? Could you lose your identity by losing the keys? One way to solve this dilemma are Soulbound tokens).

Second, the Brave ecosystem has its own native token: Basic Attention Token (BAT). The name suggests that this Ethereum-based token monetizes your attention, which is indeed the case. If you view an add, you get paid out by the advertiser in BAT. If you want to run an add yourself, you pay the viewers in BAT.

What is the web 3 aspect here? Unlike Web 2 platforms like Facebook, Brave doesn’t sell your data to advertisers. Instead, there is a circular economy without a middleman taking a cut. Your data are yours and it’s up to you if you want to monetize them (you can also opt for a setting without any adds).

The number of active users of Brave is climbing steadily.

Comparing Web 2 and Web 3

When the internet became a mass medium in the nineties, it was a static medium where you could consume content. That was Web 1. 

With the advent of social media, in the early to mid 2000’s, Web 2 was born: a version of the web that allowed us to share and create content. Around 2005, platforms like Facebook and YouTube emerged that made it possible for everyone to become a content creator. That’s why Web 2 is the ‘read & write’ iteration of the web.

Why Is Web 2 So Baaaadd?

To be fair, Web 2 gave the world a tremendous opportunity to connect and make all kinds of new ways of living. Who would have thought even 15 years ago that working from home, writing articles or publishing videos is a way we can now make our living?

But there are severe risks with this Web 2 economic model. Users don’t own their online identity. After years of building your audience on platforms like Facebook or Instagram, it can disappear in an instant if you happen to violate terms of service, or even by a mistake on the platform’s part.

In web2, power lies with corporations who built these social networks and are the gatekeepers. These central authorities verify your identity and right to publish content. Censorship is common on Web 2 platforms. Not that censorship is necessarily bad in all cases. But limiting content just because it doesn’t fit a platform’s political agenda doesn’t seem right.

Also, security is an afterthought on Web 2. Centralized systems are much easier to hack than their decentralized counterparts. So, it’s no surprise then that web2 social platforms have fallen victim to hacks many times over the years.

Web 3: Ownership to Users & Creators

In contrast, in Web 3, it’s all about giving ownership back to users and creators. Ideally, you could build an audience and content on one platform and simply move it elsewhere if you find a better fit. 

Identity will also be better served in Web 3. You’ll be able to verify your identity without having to share personal information. No sharing of your birthday, address, and phone number all the time.

It all comes down to eliminating any middleman which can exert control. Web 3 uses encryption and distributed ledger technology to get rid of the trust and centralization issues that have compromised Web 2.

Regardless of whether it is money or content, users transact without the mediation of tech companies, banks, or other intermediaries. And since everything can be tokenized, users become co-owners of applications they use and the data and content that circulate within. The community can decide on monetization of the content themselves, instead of having to put up with the platform’s monetization policy. In other words, Web 3 can be called, the ‘read, write & own’ version of the web.

Web 2 Tech Giants Moving Towards Web 3

The potential disruption of Web 2 technology by Web 3 technology begs the questions if current tech giants are already making a move to integrate Web 3 technology.

Web 3 Academy lists a few developments on the forefront of social media and online gaming.

• Meta (formerly Facebook) are the most committed to embracing the technology, with a focus on metaverse technology.
• Instagram is targeting the NFT market. Users can create and sell NFTs in the app, made possible by the Polygon blockchain. 
• Reddit has made big Web 3 moves. Their collectible avatars led to the creation of over 3 million new crypto wallets. Even in a bear market, sales volume surpassed $10 million. 

It will be interesting to see if these Web 2 giants can make the transition. Or will the applications that are currently built from the ground up win the adoption race. 

Will Instagram be able to compete with dominant NFT marketplaces like OpenSea? 

Will Chrome hold out against Brave browser? 

Has Facebook still enough credibility to compete against decentralized competitors that are springing up like Lens?

Will Everything Get a Token in Web 3?

In the Web 3 age, with blockchain as foundational technology, all assets, including real estate, intellectual property, content on social media platforms, you name it… everything with a cashflow can be tokenized and traded. Which means that everyone who participates in a certain ‘economy’ – a broad term that can included an online game ecosystem or a musician’s fanbase, can co-own the value of the community through tokens. 

In such an exciting new world, blockchains become the new power blocks, akin to countries in our world. The apps built on top of these chains are like multinationals in our world. 

(Inspired by this post of Tascha Che).

There are also thought leaders who think tokenization of everything isn’t necessary. For example, creator of Polkadot Gavin Wood thinks… “I suspect that currency will continue to play a role in services. But I think … overall, we’re going to start seeing services be delivered without the need to use tokens”. Indeed, maybe most people can’t be bothered with buying lots of different tokens to use a service.

Conclusion

If Web3 delivers on its promises of shared ownership, it will create a level playing field for everyone who knows their way around this new world. A parallel economy will emerge that does not adhere to the old national boundaries and wealth distribution. Anyone with a mobile device can make money by contributing to these new communities.