It is no secret that we humans have never been able to trust each other since we began to walk upright on two legs. There has always been a need for intermediaries – people who ensure that the people on either side of an agreement uphold their end of the bargain. Today, intermediaries include banks, who either accept or forward our money; as well as attorneys, who represent our arguments and demands; and finally, social networks, which spread our message. We need to understand what an intermediary is in order to understand what Web3 is all about.
The lack of trust is the major factor behind this high degree of intermediated deal-making. If you can’t tell what someone is thinking, it can be hard to trust them. The good news is that just as we have managed to innovate past seemingly insurmountable problems – such as mastering the art of flight, designing skyscrapers, and democratizing information – we have also managed to create a technology that resolves our trust-related struggles. Let’s take a look at Web3.
As I said before, We need to understand what an intermediary is in order to understand what Web3 is all about. The basic functions of an intermediary are the following:
- Receive and take messages from external sources. The message in the case of a bank would be an instruction to send money from customer A to customer B.
- After an authenticated message is received, act on it. If customer A’s account is authorized to send money and the fund is available, the bank would initiate the transfer. (It’s possible the account is frozen).
- Consequently, their results must be computed. Banks confirm whether or not a transfer was successful.
- The results of the computation must be stored and possibly used in another interaction. Banks use ledgers and receipts to record transactions.
Computers are technically speaking the best intermediaries. In light of this, why haven’t they already replaced our human intermediaries?
First, we must look at the concept of authority and authorization.
A delegation of authority and authorization
An intermediary’s primary role is to determine whether a claim is right or wrong. Therefore, if customer A sends money to customer B but B claims they haven’t received it, the two parties can resolve their dispute by visiting the bank that has recorded the transaction. This is something that the bank can do because it has authority, but only because the customers actively authorized it to take such actions (like recording their transactions).
We began with simple signatures on pieces of paper.
Today, we’ve moved to the digital world.
We give our permission and empower intermediaries over our fate by pressing a button, scanning a fingerprint, or inputting a password. It has been an amazing journey. We have been able to ease our lives innumerably through the services we have available.
The Digital World: Apps
Paypal allows users to send money wherever and whenever they want. We become ruthless keyboard warriors when we use Twitter. We can re-connect with lost friends on Facebook. On a simple platform like Medium, we can instantly promote our work to a global audience. Many have improved their lives by using dating apps like Tinder or OkCupid. Furthermore, we have sites such as GitHub, which allows us to collaborate with anyone worldwide, and Airbnb, which allows us to earn money from our empty apartments without ever meeting the renter. If that seems incredible now, just imagine how amazing it would have seemed if it had been created 20 years ago!
To be honest, the picture isn’t completely crystal clear. All of these services have been guilty of gaffes at some point.
Neither PayPal nor TransferWise provide customers with a valid reason to close their accounts, which eliminates the revenue necessary for clients to survive. Imagining one day you wake up to find your $5,000/month business closed for no justifiable reason.
The concern that these powerful middlemen have with our 21st-century services doesn’t just lie in the sale of personal data and a lack of privacy. The problem also pertains to the fact that third parties have access to this information, and may then use it for whatever purposes they choose.
Ledger Case
Hackers accessed personal information, including names, addresses, and phone numbers, from a Bitcoin hardware wallet company, Ledger, in 2020. A List of people with enough cryptocurrency to make a hardware wallet worth it to scammers. Several people have received fraudulent emails since then, which range from simple petitions to death threats.
The current digital infrastructure conceals a number of additional evils. Social media sites are censored, platforms that are allegedly neutral have political biases, and websites and apps are banned as monopolies. In addition, corrupt practices at the highest levels of the “free” market can lead to coordinated attacks on monetary freedom (like hedge funds and the US government working together to force people to stop buying GME stock to bail out short sellers and manipulators).
Are there any solutions to this intermediary situation? Is there any hope of changing their broken practices?
No, I don’t believe so.
It’s time to Change
Direct data reading and transfer between machines will eliminate intermediaries. The first step is to create Linked data.
Linked data allows computers to read information from each other without human adaptation. Basically, it is the interaction between computers without the involvement of humans. It’s not enough, though. Computers need access to this information at all times, and it must be possible to obtain it from other computers as well. Distributed data, then, is data that can be retrieved from any node within a network.
Distributed data can be retrieved and understood by any computer in a network at any time when it is linked. But this has been happening for some time. We’re talking about BitTorrent. In the world of torrents, seeds and peers simply mean that one computer is sending data while another is downloading it. Yet this was insufficient to introduce a new way to organize the Internet and how we live. There was a lack of trust. It was impossible to know for sure if my digital life (computer) was safe when using torrents.
Eventually, it was the blockchain that decentralized the world.
Global databases include permissionless blockchains, such as Ethereum, Polkadot, and Bitcoin. We can all verify one common truth through their mathematical verification. In those databases, we have the option of easily changing certain values directly. The blockchain keeps a record of every interaction you have with it and that interaction’s precise outcome is visible to everyone. Neither misrepresentation, rent-seeking, nor censorship exists.
In blockchains, data is distributed and linked with a level of verifiability such that a computer can not only receive and understand the data, but can trust it as well. As a whole, Web 3.0 includes the following three components:
- Linked data
- Distributed data
- Trusted data
Web3.0
Initially, skeptics and wires were the only components. What kind of person would connect computers? This is what they said. A read-only static web came next, called Web 1.0. You discovered an online resource through a manually curated web directory created by users who are mostly tech savvy.
We started getting to the services we ever dreamed of with Web 2.0 – the read-write web. Among these are social networks and software like Uber, Airbnb, PayPal, and Reddit. We are able to do all these wonderful things today because of Web 2.0. However, the advent of intermediaries and the single point of failure that came with Web 2.0 led to a rapid degradation of the digital space.
Welcome to Web 3.0 (also referred to as Web3). The user controls their identity, their actions, and their finances in this web; it might be safe, but it’s dangerous. It’s an atmosphere of total freedom, as the user is the bank but everything is dangerous.
Here are some things to think about:
- Are there any chances for individuals trading stocks outside of market hours?
- What challenges do Myanmarese face right now in organizing?
- What are the constraints a Chinese investor faces when investing in US real estate or art?
- Are Argentinians or Venezuelans able to resist inflation?
The Web 3.0 revolution simplifies all this: Anyone can invest in any company, anywhere in the world. From anywhere, at any time, anyone can send messages to anybody who’s online. A financial message, a “hello”, or even some content you weren’t meant to view (like The Great Firewall).
The #EndSars Protest and Web3
A system like this would guarantee a lot of freedom. The #EndSars protest in Nigeria in 2020 was an excellent example of Web3 proving its point. To counter the aggressive police tactics used by rogue policemen, Nigerian youths organized a peaceful protest. Over two weeks, they overcame the unpleasant attempts of the government to break up their group, including tear gas, water tanks, and unfortunately hoodlums.
Government officials turned to banks for help after their citizens began to protest, instructing them to freeze accounts of anyone who helped organize them. If this was back in the early 2000s, this would have been the death blow to the brave protesters. However, Web3 defeated Nigeria’s government in 2020. Due to Bitcoin and Ethereum, the organizers were able to accept donations from anywhere in the world, which allowed them to continue the peaceful protests for two more weeks. On October 20th 2020, the government used its own army to kill its own citizens in order to crush the protest.
This should demonstrate the need for a Web3 if nothing else does.
The Web3 builders do not care what the world thinks; they intend to bring this revolutionary change into mainstream technology whatever it takes. Web 3.0 is about unlocking the Web.
If you still have doubts about web3, you can find more info on this topic here: What is Web3? The Decentralized Internet of the Future Explained
If you liked it, read on:
