Critics see Web3 as an attempt to reframe crypto assets’ negative associations into a false narrative to legitimize it
By Kiran N. Kumar
Napster, the hollowed out 23-year-old internet company’s revival plan posted on a LinkedIn post from Hivemind partner Matt Zhang, has hinted at “Web3 futurism.”
Hivemind, being a crypto-focused investment firm that recently acquired Napster Group, wants to help Napster “revolutionize the music industry by bringing blockchain and Web3 to artists and fans.”
Napster may be following the footsteps of others to provide a platform for musicians to release content as non-fungible tokens (NFTs). Already Kings of Leon, Deadmau5, Shawn Mendes, and Tory Lanez have released NFT projects over the past year.
LimeWire, another such platform that was shut down for nearly ten years, has recently been revived as a music-centric NFT marketplace, which was acquired by Austrian brothers Julian and Paul Zehetmay, who hope for a free-for-all atmosphere of NFTs, bringing the internet’s wild west days back.
Julian Zehetmay told CNBC, “We’re trying to be a more mature platform and professionalize everything, just like Coinbase or other exchanges would do for crypto assets.”
Limewire has also struck a deal with Universal Music Group to license content globally and is confident that UMG artists and record labels can leverage the LimeWire marketplace as an additional platform to “explore unique ways of engaging with fans through digital collectibles.”
Is Web3 the next big thing to happen?
Web3 or Web 3.0 is a new iteration of the World Wide Web based on blockchain technology, incorporating ideas of decentralization and token-based economics. Some see it as a counter to Web 2.0, where data and content are centralized in a small group of companies referred to as “Big Tech”.
Originally coined in 2014 by Ethereum co-founder Gavin Wood, Web3 has gained global attention in 2021 when cryptocurrency enthusiasts, large tech giants and venture capital firms evinced interest in it as a post-pandemic hope for the future.
Some experts argue that Web3 will provide increased data security, scalability, and privacy for users and combat the influence of large technology companies.
But many others have differed and raised concerns about a decentralized web that would proliferate harmful content, control in a small group of wealthy investors and even loss of privacy due to more expansive data collection. Elon Musk and Jack Dorsey, among others, have opposed Web3 as a mere buzzword.
As Web 1.0 refers to the initial era of the World Wide Web that evolved through from 1991 to 2004, when most websites were static web pages, with users consuming content, Web 2.0 unveiled “the web as platform” with user-created content uploaded to forums, social media and networking services, blogs, and wikis.
Currently, Web 2.0 is dominating the online world while Web3 refers to a decentralized online ecosystem based on blockchain.
Bloomberg has described Web3 as an idea that “would build financial assets, in the form of tokens, into the inner workings of almost anything you do online”.
It said the Decentralized finance (DeFi), a concept in Web3, denotes a market where users exchange currency without bank or any central bank’s regulatory process.
Read: DeFi: Opportunities and challenges to world economy (May 13, 2022)
Bloomberg quoted skeptics who said that the idea “is a long way from proving its use beyond niche applications, many of them tools aimed at crypto traders”.
Technologists argue that Web3 would likely run in tandem with Web 2.0 sites, which may adopt Web3 technologies in order to keep their services relevant.
Those concerned about over-centralization of the web in a few “Big Tech” companies hope for Web3 to improve data security, scalability, and privacy beyond what is currently possible with Web 2.0 platforms.
While Reddit has been reportedly exploring incorporating Web3 technologies into its platform, Discord CEO Jason Citron tweeted in November 2021 suggesting Discord might be exploring integrating cryptocurrency wallets into its platform.
But two days later, Discord clarified that it was a concept and the company had no plans to integrate such technologies after a backlash on social media.
With venture capitalists like Andreessen Horowitz lobbying for the idea since October 2021 as a potential solution to questions about regulation of the web, several policymakers have been on alert as well.
Read: As Bitcoin loses steam, blockchain moving into next generation (September 10, 2021)
The New York Times reported that investors are betting $27 billion that would go in Web3 that “is the future of the internet”.
But the backlash to Web3 is mainly coming from the Big Tech firms. Citing concerns that it might be difficult to regulate a decentralized web, they argue that it would become far more difficult to prevent cybercrime, online harassment, hate speech, and the dissemination of child abuse images.
Jack Dorsey, co-founder of Twitter, dismissed it as a “venture capitalists’ plaything”. Instead of democratizing the internet, Web3 will shift power from players like Facebook to venture capital funds like Andreessen Horowitz, he said.
Last year, Tesla CEO Elon Musk too expressed skepticism about Web3 in a tweet that Web3 “seems more a marketing buzzword than reality right now”.
Joining the debate, Signal creator Moxie Marlinspike said Web3 is not as decentralized as it appears to be due to consolidation in the cryptocurrency field.
He reminded that blockchain application programming interfaces are currently controlled by companies Alchemy and Infura, or cryptocurrency exchanges are mainly dominated by Binance, Coinbase, MetaMask, and OpenSea, and the stablecoin market is currently dominated by Tether. Essentially, the new Web3 resembles the old Web 1.0, he said.
James Grimmelmann of Cornell University calls it “vaporware” as it’s “a promised future internet that fixes all the things people don’t like about the current internet.”
He argued that it would, in fact, move the internet toward a blockchain-focused infrastructure and cause more data collection compared to the current internet (Web 2.0).
However, the debate goes on. Many have brushed aside the idea of Web3 as an attempt to reframe the negative associations of crypto assets into a false narrative to legitimize it. But for Napster, it would be a new beginning.