What is Web3?
In simple terms, in the world of Web3, everyone can “directly own and control their own data” without having to surrender it to centralized platforms.
For example, Meta recently announced that it would use posts and photos from Facebook and Instagram users as material to train artificial intelligence (AI). In the world of Web3, you can have complete control and ownership over this data.
Web3, also known as decentralized internet, is a new generation network built on blockchain technology. Its core concept of “decentralization” is essentially a form of power decentralization, allowing internet users to not only contribute content and data, but also become the “actual owners” of this data.
The concept of digital assets in the Web3 world is also becoming increasingly popular, with cryptocurrencies and non-fungible tokens (NFTs) gaining traction. This provides Web3 with a huge market opportunity and becomes the first impression for most people about Web3. Both businesses and individual investors can create and trade these digital assets to generate income.
In addition, Web3 promotes new investment models such as decentralized finance (DeFi) through its decentralized concept and blockchain technology. Users no longer need to rely on financial institutions such as brokers and banks to provide financial tools. By using smart contracts on the blockchain, they can engage in financial activities such as buying, selling, and lending without the need for intermediaries. This provides investors with unparalleled flexibility and benefits compared to traditional banking systems.
How will Web3 reshape the internet world?
Alex Tapscott, a Chartered Financial Analyst (CFA) and General Manager of Digital Assets at Ninepoint Partners, an elite independent investment management firm, holds the view that Web3 will completely change existing business models. In the Web2 world, large tech giants own and operate data platforms and profit from the data created by users. However, in the structure of Web3, the individuals who create the data, the users themselves, will be able to directly benefit economically. This applies not only to the creators of data, but also to anyone who contributes to the internet, as they have the opportunity to receive rewards.
Tapscott reveals in his latest book, “Web3: New Business Opportunities,” which has become a bestseller in The Wall Street Journal and The Globe and Mail, that he was actually an early user of Facebook. At that time, he uploaded photos and updated information on Facebook, unknowingly helping the platform create value without expecting any compensation or rewards for himself.
At the same time, he did not anticipate that all the voluntarily shared information would be collected or resold by the company without his knowledge. “It was basically like making a deal with the devil, and we didn’t even realize that we were making a deal.”
However, decentralized applications in the Web3 world are not controlled by management teams or project parties but are owned by the users themselves. Users can choose to sell their personal data to advertisers, AI training models, or monetize it in various projects, or they can choose not to disclose it at all to protect their privacy. Regardless of the decision, it is made by the individual user. Even large tech companies like Microsoft and Facebook have already started to establish or support decentralized platforms to expand their business scope.
Although Web3 brings many opportunities, it also faces numerous challenges, including scalability, security issues, and uncertainties in legal regulations. Tapscott emphasizes that “the future of Web3 will not only be technological progress but also a significant transformation of culture and social structures.”