How Embracing a Decentralized Internet Can Improve Digital Ownership

Known as Web2, the current iteration of the Internet emphasizes the creation and distribution of user-generated content. Websites like YouTube, social media apps like Instagram and Twitter, news sites, personal blogs, and many more make up a large part of the internet.

Web2 is a step up from Web1, which was primarily a read-only web version filled with simple static websites. Web3 aims to bring decentralization and token-based economies to the internet.

Web2 versus Web3

The development of several different web protocols in the early 21st century allowed programs and content to be linked through read and write interactions. Web2, in its current form, allows users to consume material created by other users and create their own content. Readers are probably the most familiar with Web2. Due to Web2’s autonomy in content production, the era of social networking was ushered in, and with it came the proliferation of blogs, online forums, and online marketplaces.

However, rent-seeking centralized companies have taken advantage of this free flow of information to monetize user data and habits, despite the undeniable fact that Web2 has offered users significant benefits. The demand for a web controlled by developers and users has increased, mainly due to a breakdown in trust, exploitation of users and control of data.

Web3’s goal is to encourage open services driven by decentralized applications (DApps) rather than centralized applications controlled by tech giants. Web3 users can connect directly to applications and protocols, eliminating the need for third-party intermediaries in the process. Web3 has been described as the “read/write/own” version of the Internet. Open services built on Web3 encourage unauthorized access, maximize value, and ensure auditability. These services are much more reliable, fair and ethical.

Users are not required to pay recurring fees or provide personal information to use the Technology Platforms; instead, they are invited to participate in the governance and operation of the protocols. Participants are network stakeholders, rather than mere consumers or goods diverted to meet economic demands.

Tokens or coins are used in this framework to symbolize accessibility, governance and ownership of decentralized networks. In Web2, the user plays the role of the product; in Web3 they assume the role of owner.

Úrsula O’Kuinghttons, director of communications and partnerships at the Web3 Foundation, an organization that supports blockchain and Web3, told Cointelegraph:

“There are two main considerations when we think about ownership in Web3. The first is how organizations are run. The existing and flawed status quo puts ownership in the hands of the various powerful individuals who represent organizations, institutions and businesses.”

O’Kuinghttons continued, “A properly decentralized web ensures that ownership of these monolithic structures is stripped of this hierarchy. It means networks and communities have much more power in governance and decision-making. It also means that rewards are shared more equitably. Engineers are building Web3 to harness the power of a peer-to-peer network to create sustainable and effective solutions with blockchain.”

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“The other key issue concerns the sovereign ownership of data. Web3 seeks to protect individuals’ legitimate claims to have full control over their data and to put privacy at the forefront of their online lives. This goal can be achieved through to zero-knowledge proof protocols, encryption and private keys.”

How Web3 will bring ownership to users

Web3 will bring ownership to users in several ways, one of them being the ability to host websites that cannot be censored or taken down. Today’s web hosting system relies mostly on servers controlled by centralized organizations. These organizations can remove websites if they believe they have sufficient reason to do so.

Decentralized file storage networks allow users to create censorship-free websites using the InterPlanetary File System (IPFS) protocol. Instead of using a central server, with IPFS each individual acts as a server by caching site data. Once another user visits this site, data is loaded from one of the cached users. So, for example, if a million users visit a site to see a photo, the photo file may be loaded from one of those million hosts when the next person visits the site.

This process removes the need for a centralized entity, as the burden of serving the website is distributed among the users who have accessed it. This is possible because the data files have a unique cryptographic hash as their address instead of a user-generated name like red-car.png. After the file is requested, the unique hash is looked up and retrieved from the cache.

Organizations like the Web3 Foundation support the development of technologies and applications in the area of ​​decentralized web software protocols. They award grants to teams around the world that help grow the Web3 ecosystem. The foundation currently supports 415 projects in the Polkadot ecosystem with its grants program. In addition, over 1,000 grant applications were submitted.

Decentralized Autonomous Organizations (DAOs) also play an important role in the Web3 infrastructure. The next wave of user adoption of Web3 ownership and accessibility will be driven by community-owned DAOs governed by non-fungible tokens (NFTs) helping to drive that adoption.

DAOs are autonomous groups whose decisions are made using smart contracts on the blockchain. DAOs eliminate the need for a single governing body or point of authority by bringing together people with common interests and talents. Moreover, thanks to the distributed structure of the blockchain, all decisions and transactions can be viewed and confirmed by everyone.

DAOs can be used to facilitate collective ownership in the context of NFTs. Members make decisions by voting at regular intervals, and access to embedded treasuries requires member approval. The rising cost of NFTs has unwittingly put many collections out of reach for individual customers. DAOs can allow users to share the cost and ownership of individual NFTs to level the playing field and foster the decentralized ethos of accessibility and inclusion.

DAOs provide a governance structure for Web3 that improves participation while reducing the risk of corruption or censorship. They can be found in several situations ranging from social media to gambling games to win. The popularity of DAOs will expand to decentralized finance (DeFi), NFT collection, and philanthropic organizations as DAOs grow in popularity. Also, unlike hierarchical organizations, DAOs allow for immediate decision-making once all members are in agreement.

Non-profit organizations could greatly benefit from the DAO concept. The administrative expense and reluctance to allocate resources are unlikely to outweigh the benefit of a charity’s exceptional work. Additionally, the use of DAOs allows for the efficient and timely distribution of funds to their intended recipients. Therefore, NGOs can have a greater influence on their purposes.

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DAOs can also be used as a direct route for investment and rapid adoption of DeFi. Peer-to-peer crypto transactions conducted by DAO are inexpensive, virtually instantaneous, and unregulated by banking laws. As a result, members who take out loans or engage in other activities may earn better returns than they would have received at a traditional bank. The tremendous development of this industry seems endless.

Using NFTs and DAOs to buy and store these digital assets expands the creator economy, which is especially important given the current generation’s obsession with social media and content creation. Because the value of a creator’s work is inextricably linked to its reputation, following, and establishment, creators win. DAOs, like many large organizations and businesses, will most certainly allow users to access Web3 in the future.