Web 3.0: promises and pitfalls

The story of Oppenheimer is clear.

Technology itself is not good or evil. People decide whether to use technological advances to destroy or create, to further their own interests or help others. But when the things we’ve made can only be controlled by those with the deepest of pockets or when tech starts to learn and transform beyond the limitations of its makers, what happens then? Who – or what – has the ultimate power?

This was my main question when recently listening to a talk given to Alpha Grid by Kitty Horlick, founder of Blackwood, a consultancy firm which onboards businesses into Web 3.0 and its associated technologies including blockchain, non-fungible tokens (NFTs), the metaverse and cryptocurrencies.

Horlick unsurprisingly has a self-proclaimed bias towards the evolving world of Web 3.0.

While she emphasises that these technologies are nowhere near perfect and still in their infancy, Horlick believes they have the potential to take a system controlled by a handful of tech giants (our current Web 2.0) – where personal data is sold and manipulated with minimal consent – and transfer power back to the people.

But is the promise of Web 3.0 as fair and democratic as it seems?

First of all… what is it? Here are some highlights from Horlick’s presentation:

Web 3.0 is a new version of the Internet that is built on blockchain technology. This means that data and information is stored on a decentralised network of computers, rather than on a centralised server. This theoretically makes Web 3.0 more secure and transparent as it’s incredibly difficult (and costly) to tamper with data on the blockchain and gives users more control over their own information.
Blockchain technology is a distributed ledger that involves community-decision making and transparency of information. The reason that it’s called the blockchain is because it’s literally a chain of blocks of data. Inside each block you have data, but you also have a hash, which is like a cryptographic code that acts like a unique fingerprint. As well as having its own hash, each block carries the history of all the hashes that went before it. If someone tries to tamper with a block, it will likely be visibly invalid. This is where the decentralised and distributed nature of the ledger comes in. If a new block or a change to a block is proposed, the whole network has to approve it.
Web 3.0 has the potential to revolutionise the way we interact with the Internet. It could make the Internet more democratic and user-friendly, and it could also help to solve some of the problems that we face with Web 2.0, such as data privacy and censorship.
One of the challenges of Web 3.0 is that it is still in its early stages of development. There are many technical hurdles that need to be overcome before it can become mainstream. However, the potential benefits of Web 3.0 are significant, and it is likely to play an important role in the future of the Internet.

AI is not new, but generative AI is… and it’s very unpredictable.

Generative AI doesn’t just predict, it creates, but its creations are based off of human-made work (hence the current strikes happening in the entertainment industry). Blockchain technology could be used to trace back where the work came from and provide more transparency around AI-based art.

Here are some specific examples of how blockchain and Web 3.0 are being used today:

Decentralised finance (DeFi): DeFi applications allow users to borrow and lend money, trade cryptocurrencies, and earn interest on their assets without having to go through a bank.
NFTs: NFTs are being used to represent digital artworks, collectibles, and in-game items. They can also be used to represent physical assets such as real estate.
Smart contracts: Smart contracts are self-executing contracts that are stored on the blockchain. They can be used to automate transactions and agreements, and they can help to reduce fraud and errors.
Supply chain management: Blockchain can be used to track the movement of goods and materials through a supply chain. This can help to improve efficiency and transparency.

Money still equals power

One key thing to note about Web 3.0 and its associated tech is that it’s also (at present) incredibly energy-intensive and environmentally destructive. In 2022, Bitcoin transactions alone generated more carbon emissions than Sweden.

And just like in traditional systems, those with vast amounts of wealth still seem to have the ultimate power.

As Horlick mentioned, it would be incredibly difficult and computationally expensive, for example, to train or abuse AI models or corrupt the crypto chain. This should be considered a good thing. But it’s not impossible… just very, very costly, which means billionaire moguls who already influence so much of society can potentially manipulate and shape the Web 3.0 world.

For me, before we embrace the very real potential of digital democracy and decentralisation, we need to address the mass hoarding of money and widespread wealth inequality. Otherwise something like Web 3.0 will never be truly democratic, fair or free.

Note: some of this was written by AI. Can you guess which parts?