Web3 FAQ: What Is Web 3.0? And Why Does Elon Musk Call It ‘BS’?

There’s a term bubbling up across social media that is confusing an awful lot of people. That term is “Web 3.0,” also called “Web3.” The phenomenon is being heralded by early supporters as the future of the internet. To others, it’s just a buzzword. But what is Web 3.0? And how does it stand to shape the future like its fans seem to think it will? Well, in some ways, Web 3.0 already exists, and it’s already well on its way to shaping how we connect online.

Four letter blocks, spelling out Web 3.0.
Source: Shutterstock

Cryptocurrency is opening up the gate for Web 3.0. The asset class is laying the foundation for a decentralized, autonomous network, free from corporate authority. In just a handful of years, many believe Web 3.0 will be alive and thriving.

So, what is it exactly? Here’s everything you need to know.

Web 3.0 Frequently Asked Questions

What is Web 3.0? I didn’t even know there was a Web 2.0.

Web 3.0 is — just as it sounds — considered to be the third iteration of the internet as we know it. Web 1.0 is the early foundations of the internet. Think of the archaic HTML websites you’d look at in the 1990s next to your beige computer tower. This is where it all started, and this period bred much innovation.

Web 2.0 is the internet as we know it today, starting with prototypical Facebook pages and e-commerce. This is a period where connectivity is vastly emphasized; you can chat with friends, receive instant answers to any question in the world and buy nearly anything you want online.

What’s so bad about Web 2.0 that we want to change it?

While Web 2.0 brought vast changes with it, it also brings many problems for end users. A lot of the criticisms people have levied against Web 2.0 have been in regard to who holds the power on the internet. Sure, the advent of companies like Meta Platforms (NASDAQ:FB) and Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) have brought huge conveniences, but they also have created a disruption in who is in control in the digital space.

Meta’s recent scandals have been the most shining example of this displacement of power. Whistleblowers have exposed ways in which the company manipulated its users — the end consumers of the internet. Moreover, there is much controversy over the ways in which companies mine personal data and use this to target specific users.

How does Web 3.0 seek to fix these issues?

Web 3.0 is the direct response to this power imbalance. It seeks to address this by putting power back into the hands of users through decentralization. Data and power is centralized currently among the tech giants like Meta and Alphabet. With Web 3.0, this data can remain as private as a user wants it to be. It also frees users of the indiscretions of these companies’ rules over users. The internet is considered a frontier for freedom of speech, thanks in large part to the connectivity fostered by social media. And yet, users are still subject to rules made at the whim of the ruling corporations.

How exactly will Web 3.0 “decentralize the internet”?

Thanks to advances in blockchain technology, the path forward for Web 3.0 is relatively clear. You hear crypto bulls talking about decentralization all the time on blockchain networks. There are decentralized applications, decentralized finance, decentralized autonomous organizations (DAOs) and so on.

The internet as we know it is slowly moving to the blockchain because it is where users can retain their own independence. As cryptocurrency is demonstrating, there’s a lot of demand for a place where people can invest their money the way they want and for higher returns than banks can offer; that much is clear from the success of DeFi protocols, which allow one to do things like stake assets for passive income.

There’s a high demand also for a decentralized internet. With Web 3.0, one will be able to use things like social media dapps, where developers have renounced power and users make rules on the type of content that can and can’t be posted through community voting efforts. They could then jump to a DeFi protocol and make a token swap, or use their tokens in the metaverse. Most importantly, they could do all of this on one personal account, log-in free. The possibilities are as infinite as the internet as we know it today, but without sacrificing one’s power or data.

Elon Musk just called Web 3.0 “BS.” Is he right? Is it just a buzzword?

Indeed, Elon Musk is tweeting today that Web 3.0 “sounds like bs.” Alongside this astute statement, Musk called the explosion of blockchain tech and Web 3.0 hype “nuttier than ’99,” referencing the dot-com boom of the late 1990s.

There are a lot of naysayers out there like Elon Musk. Since he is not likely to provide any insight on his views, we can’t know for sure what is holding the business magnate back from Web 3.0. But, if his views fall in line with other skeptics, he likely thinks there’s no real vision to it that makes it more compelling than the Silicon Valley-led Web 2.0 we experience today.

Others think the idea of Web 3.0 taking over is not such a ridiculous notion. However, they find it hard to believe these corporations won’t simply adopt Web 3.0 ideas for their own products. Many believe that these Silicon Valley companies are going to continue taking notice of decentralization efforts, and they are going to implement ideas of Web 3.0 into their own businesses in order to retain relevancy.

I am all-in on Web 3.0, regardless of what Elon says. How far away are we from it?

It’s difficult to answer this question because there’s no definitive moment when we’ll know; it’ll just happen. Users will continue to move to the blockchain, developers will continue to build products for the blockchain and one day it will simply be ubiquitous.

As of right now, there are a handful of Web 3.0 crypto projects out there. Developers are creating protocols for sharing wireless internet, sharing secure data storage space and creating the foundations for a broader decentralized internet. Projects like Polkadot (CCC:DOT-USD) are leading the charge as some of the earliest Web 3.0 endeavors; indeed, Polkadot has the full backing of the Web3 Foundation, which seeks to expedite development of the next iteration of the internet.

On the date of publication, Brenden Rearick did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Article printed from InvestorPlace Media, https://investorplace.com/2021/12/web3-faq-what-is-web-3-0-and-why-does-elon-musk-call-it-bs/.

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