Investors are betting $27 billion that Web3 is the future of the internet

There’s nothing that the techies and crypto kings of Silicon Valley love more than a good buzzword, and they’ve got a new one going around that’s picking up steam: Web3. 

So what exactly does it mean? Is it akin to the meaningless “synergies” and “learnings” that make up the lexicon of corporatese, or is there some actual heft to the concept? 

Web3, or Web 3.0, is shorthand for what some tech people believe the next iteration of the internet will look like. We’re currently living in a Web 2.0 world, which is app-based and easy to use. We can talk to our friends and coworkers, purchase our groceries and clothing, and get our news. But in Web 2.0, our online lives are currently ruled by trillion-dollar companies like Apple, Facebook, Amazon, and Google.

The promise of Web3 began as a way to decentralize how we function on the web and put some of that power back into the hands of users. The dream, according to people like Gavin Wood, the computer scientist who cofounded Ethereum, is that new social media platforms, search databases, and banking and e-commerce sites will replace the current major tech companies, becoming the new normal. Most important, instead of being powered by proprietary and secretive corporate algorithms, these new companies would run on blockchains, the systems upon which cryptocurrencies like Bitcoin are built. 

The mechanics of blockchains prevent corporations from keeping proprietary data hidden, they are unable to block third-party sites, and the software is open source. 

These blockchain platforms don’t belong to anyone, Dieter Shirley, the CTO of Dapper Labs, one of the largest companies in the NFT space, previously told Fortune.  

“There is no single company…that can pull the plug,” he said. “It’s not about opening borders, it’s about creating a new realm where there are no borders to begin with. Where the core rules are securely baked into the system, and its operation is fully verifiable and predictable.”

Although that might sound like a fantasy, the concept of Web3 has certainly caught the eye of venture capitalists, who have put more than $27 billion into blockchain projects like crypto just this year, the New York Times reported. It has also, however, caught the eye of Big Tech titans, whose involvement might negate the ideals on which it was founded. Mark Zuckerberg recently rebranded Facebook as Meta, a company that he hopes will be at the forefront of Web3. 

Just like NFTs, Web3 and metaverse platforms are the next natural progression in how we interact, relate, and communicate with each other,” Zuckerberg said

But Web3 skeptics argue that it’s difficult to bust open a potential monopoly like Facebook when Facebook is the one leading the way. 

Elon Musk has called out these hypocrisies. Web 3.0, he tweeted last week, “sounds like bs.” The hype surrounding it, he said, is “nuttier than ’99,” a reference to the dotcom boom and subsequent bust of the 1990s.

Right now Web3 does exist, but it exists largely in the crypto universe that involves digital currencies and the exchange of NFTs, and isn’t widely accessible to the average internet user. 

Young entrepreneurs are trying to change that. The Web3 Foundation, founded by Wood, is working on creating a set of standardized regulations and governing principles for blockchain-based products. Companies like Dapper Labs are also creating NFT-based card exchange games like NBA Top Shot and CryptoKitties, in a bid to get users on board with blockchain technology and digital wallets. 

“People don’t even know the alternative,” Roham Gharegozlou, the founder and CEO of Dapper Labs, told Fortune earlier this year, referring to Web 2.0. 

The current crop of developers came up learning there was only one way to write an app, and that paying a “tax” to Apple or Google was inevitable, he said. Consumers don’t know where their data is going, either. 

“You just press checkboxes, you press ‘Accept.’ That’s the world we live in,” says Gharegozlou. “No one has provided an alternative—that’s what we’re trying to make.”

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