Written by Sergio Barbosa on April 14, 2022

Web3: Tell me if you’ve heard this one before?

Co-founder and CIO of enterprise software development house, Global Kinetic, Sergio directly heads its open banking platform, FutureBank. A skilled software engineer, innovative product developer, and keen business strategist, he has participated in several notable fintech milestones, including building the southern hemisphere’s first digital-only bank all the way back in 2002.

“On the Internet, nobody knows you’re a dog.” The New Yorker is famous for its clever cartoons – and none has summed up a pivotal moment in society so perfectly as that one, long ago in July 1993. It was an Internet meme before the Internet had memes.

What the drawing captured was a sense of the utopian potential of the then WIP WWW, particularly the way it might liberate users from the straight jackets of their real-world identities. The promise of reinvention, free from control, was backed by the technology itself, which seemed to guarantee a degree of anonymity over a highly decentralized and chaotic network of computers.

Sadly, things started looking less rosy for our canine friends soon after. The HTML cookie made its appearance little over a year after the cartoon was published. Developments snowballed, for better and worse. What the Internet came to lose in anonymity, trust and civility, it gained in utility, efficiency and convenience.

Money changes everything

The transition from the decentralized Web 1.0 to the centralized Web 2.0 was inevitable. What military comms operators, scientists and researchers had put up with in ARPANET and Gopher was never going to appeal to the mass market, as exciting as the Internet sounded. Going online didn’t take a university degree exactly, but it wasn’t a walk in the park either.

Slowly, new tech players competed to ease consumers’ access to email and the WWW, bundling the software and hardware they needed in ever more user-friendly and affordable packages. The market consolidated, conferring on winners like Microsoft, Apple, Amazon, and, yes, AOL and Yahoo, a kind of omnipresence.

On the other side of the modem, as more people came online, the incentive for every kind of business to set up shop grew, raising the commercial stakes and setting off a new gold rush, this time for consumer data (not the red herring that was the dotcom bomb), the profit from which has powered the rise and eventual omnipotence of Google, Facebook, and their Chinese equivalents.

Let’s try this again, shall we

Different dog now. A few months ago, someone paid $450,000 for a plot adjoining land owned by Snoop Dogg in the Snoopverse, a virtual world built on The Sandbox platform. Katt Benedict, director of open finance at MX, commented on the news reported by Ron Shevlin on LinkedIn: “Conceptually, a metaverse could have been an opportunity to explore a post-Hunger Games new world. A world that has no concept of financial exclusion and class distinctions.”

It's sad to see how fast this thing called the metaverse has come to resemble our own money warped reality. In the same way that “rich digital experiences” today invariably involve making payments, the vision of the future metaverse you read about most is a kind of 3-D virtual shopping.

Scooting around the Internet, you’ll find enough idealism and hopeful exuberance attached to Web3 to power a Segway to Mars.

What’s this have to do with Web3, the much hyped new incarnation of the digital world we increasingly call home? 1 New technologies have frequently been hyped as game changers only to disappoint early adopters. Scooting around the Internet (the 2.0 version), you’ll find enough idealism and hope attached to Web3 to power a Segway to Mars: Web3 and/or crypto will end censorship, state surveillance and repression; reduce fraud and corruption; counter inflation, smooth access to capital, alleviate poverty and financial exclusion and solve the problem of developing world landlessness – if they don’t actually usher in a post-scarcity economy2.  The Mozilla Foundation predicts a dystopian future without web decentralization. Gavin Wood, co-founder of Ethereum and the man who coined the word Web3, believes it’s the only means of saving liberal democracy. Jack Dorsey has said he hopes Bitcoin will bring us world peace.

It really does sound wonderful, doesn’t it? Kind of like Sweden.

A luta continua!

As it stands now, Web2 is dominated by a few very large and extremely well resourced companies that exert disproportionate control over users – aka consumers and citizens. They are sustained by enormous profits derived from the same users’ personal data and content.

Harvard Business School professor Shoshona Zuboff explains in her 2019 book The Age of Surveillance Capitalism:

“Surveillance capitalism unilaterally claims human experience as free raw material for translation into behavioral data. Although some of these data are applied to service improvement, the rest are declared as a proprietary behavioral surplus, fed into advanced manufacturing processes known as ‘machine intelligence’, and fabricated into prediction products that anticipate what you will do now, soon, and later. Finally, these prediction products are traded in a new kind of marketplace that I call behavioral futures markets. Surveillance capitalists have grown immensely wealthy from these trading operations, for many companies are willing to lay bets on our future behavior.”

Tim O’Reilly, whose definition of Web 2.0 is still the most widely used, has always been careful not to demonize Facebook and Google.3  But even he is ringing the alarm:

“When companies are using the data they collect for our benefit, it's a great deal. When companies are using it to manipulate us, or to direct us in a way that hurts us, or that enhances their market power at the expense of competitors who might provide us better value, then they're harming us with our data.”

A Web3 utopia beckons. Or does it?

Web3’s backers, some of whom made billions investing in Facebook, say it will fix the personal data problem for good. Chris Dixon, a partner at Andreesen Horowitz, describes it as a combination of Web2’s rich functionality and the “decentralized, community-governed ethos of Web1”. He says that “this means people can become participants and shareholders, not just customers or products. Web3 is the internet owned by the builders and users, orchestrated with tokens.”

Just as with the first decentralized Internet, the technology underlying Web3 can’t be co-opted by reactionary forces, or so the line goes. No-one owns the blockchain; it’s shared. You maintain control over not only your personal data but any aspect of your digital life. Content creators – i.e. everyone – can monetize their every mundane  unique thought, action, and virtual creation. “It means that all the value that’s created can be shared amongst more people, rather than just the owners, investors and employees,” says Esther Crawford at Twitter.

Sounding less like Sweden now, more like a 1960s kibbutz.

Oddly enough, I’ve managed not to mention Moxy Marlinspike in this post. Next week, I’ll wade into the debate over weaknesses in the crypto system that he fears will result in rapid recentralization of Web3, or, as he darkly suggests it may end up: Web2x2 – “web2 but with even less privacy”.


  1. As used here, Web3 is distinct from Web 3.0. The former – the subject of this post – is a vision of a blockchain-powered decentralized web. The latter is associated, closely or not, with the Semantic Web, an on-going effort led by Tim Berners-Lee and the W3C to make the data on the web more directly meaningful to machines, so that they can use it to make decisions independently of people.

  2. In this context, crypto does not refer to digital assets like Bitcoin or NFTs but to the global blockchain-powered infrastructure enabling them, as well as innovations like decentralized finance, decentralized autonomous organizations, and self-sovereign identity. Crypto’s close integration with standard web technologies is a precondition for a fully realized Web3.

  3. Web 2.0 has been cast primarily as “participatory” by its boosters, differentiating it from the static, passively consumed formats of Web 1.0. Cynics, among them many older techies, tend to follow Tim O’Reilly’s definition of Web 2.0 as “the network as platform”, in contrast to Web 1.0’s decentralized architecture. Some of the latter camp regard the active collaboration and content generation so characteristic of Web 2.0 as a natural development of Web 1.0 technologies, questioning the need for a new version number.

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