Web3 is the new buzzword. The new “buzzword”, as explained in good French by players in the crypto ecosystem. But what is it ? And what is it for? Web3 would be the third generation of the Web, which makes it possible to consult sites on the Internet via a browser, after Web 1 and Web 2. Web1, from 1990, is characterized by a strong decentralization but tends to be reduced to reading information on the screen, with little interaction between Internet users. The Web2, since 2005, is illustrated by the emergence of social networks, with the domination of Gafa (Google, Apple, Meta, Amazon) and a strong centralization of data.
Web3 must breathe new decentralization into it, based on blockchain technology, which makes it possible to exchange financial assets in the form of digital tokens but also data without going through a third party, such as Facebook or a banking establishment. “Web 3 must return data to users,” rejoices Tangi Le Calvez. The CEO of the startup Goin, which facilitates investment in crypto-assets, spoke at the CryptoDay show, organized on Wednesday at Station F, as part of a round table dedicated to Web3.
“Users have (digital) wallets that will contain value (cryptocurrencies, tokens, NFTs, etc.) and everyone will be able to directly exchange this value with other parties,” he explains. Web3 must thus open up the data market and allow users to reclaim their own, with the possibility of directly monetizing their productions on the blockchain. We thus speak of “tokenization”, the process by which data is converted into a “token”, or a digital token.
Retrieve the value captured by the Gafa
In Web2, most of the value created is captured by the tech giants. According a report published in May by the a16z crypto venture capital fund, Web3 pays an average of $174,000 to each non-fungible token (NFT) creator, while Spotify pays only $636 per artist, YouTube only pays $2.47 per channel on its platform and Meta (ex-Facebook) grants $0.10 per user.
“Web 3 will transform the Internet into a huge platform for transferring value,” sums up Tangi Le Calvez. “Web3 makes assets much more liquid and makes trading more fluid,” adds Elodie de Marchi, chief operating officer at Kaiko, a digital asset data provider. “Buying an apartment could take three minutes instead of three months.”
But is Web3 really the future of the web? Technical, human and financial factors could at least slow down its use. To begin with, “the technology is not yet capable of absorbing all the flows of transactions and data that pass through”, points out Tangi Le Calvez. There is a problem of “scalability”, in other words of using the blockchain on a very large scale, to record and carry out all transactions without causing network saturation.
“Today, there is no infrastructure that allows mass adoption,” admits Elodie de Marchi. And several blockchains, such as Solana and Ethereum, have already suffered from major congestion problems.
A decentralized universe difficult to regulate
Then, this new universe generally escapes regulation. “When a market represents billions, it is not possible that it is not regulated and that justice cannot punish thieves and hackers”, underlines Tangi Le Calvez. But the work is huge, as these new technologies are complex. With a major obstacle: their decentralized operation. “The regulator needs to exercise its power over a centralized actor”, points out Olivier Jaillon, boss of the digital insurer Wakam.
And if the Web3 and the underlying technology on which it is based – the blockchain – should bring more transparency, by making it possible to verify the history of transactions in public and decentralized ledgers, the applications and projects that develop in this ecosystem are far from all reliable and scams are numerous.
Disintermediating finance can weaken small shareholders
The problem of investor protection also arises in a decentralized Web3 without intermediary. “We cannot completely move towards decentralization. The technologies remain very complex, few people know how to create a wallet (digital wallet, editor’s note) and analyze transactions on the blockchain”, concedes Tangi Le Calvez.
“Disintermediating finance, does that bring anything?” Asks bluntly Stéphane Reverre, president of SUN ZU Lab, which provides liquidity analyzes of the crypto market. “The intermediary plays a role of protection of the small holder”, he develops. “Buying an apartment in five minutes, is that a good thing for both the buyer and the seller?” he asks in a new rhetorical question.
The protection of small investors will only intervene “when the legislation has evolved and the crypto ecosystem too”, estimates Stéphane Reverre. For him, the sector must get rid of some of its libertarian ideals. In other words, accept to be more regulated by the States and centralized institutions.
Demand for Web3 still to be confirmed
Furthermore, do the masses of citizens and users really want Web3? “Users don’t care about their data. I’m not saying that it’s not desirable to be in control of your data, but that the average user is not in demand”, assures Stéphane Reverre.
Using decentralized financial applications developed on the blockchain is not within everyone’s reach. The population is far from being composed solely of geeks fond of this technology. Many people certainly prefer the ease of use offered by Web2 today, even if it means giving up control of their data. “We live in closed ecosystems – Android, iOS… – very practical. Are we ready to get out of our shackles?”, raises the boss of SUN ZU Lab.
Very skeptical about Web3, he also expresses doubts about its profitability and therefore in the long term the amount of investment from which it will benefit. “I don’t see economies of scale in this ecosystem, when there are monstrous economies of scale today” in Web2.
Cédric Teissier, founder of Echotraffic, a fund investing in crypto projects, thinks that Web3 will not make Web2 disappear, which has made it possible to develop multiple uses and facilities. “But it’s a revolution. The opportunities are enormous in the medium and long term”, he considers. “Regulators are working on a regulated framework for this technology to become the norm.”
A not-so-decentralized Web, with new intermediaries
Still, the nascent Web3 already displays similarities with Web2. “We go back to intermediaries. The truth (on the Web of tomorrow, editor’s note) is surely a little in the middle, between decentralization and centralization”, supposes Tangi Le Calvez. In fact, the purchases and sales of NFTs today take place in particular via the Opensea platform, which largely dominates the ecosystem and charges transaction fees to get paid.The universe of cryptocurrencies already has its giants, centralized exchange platforms, such as Binance and Coinbase.
“In the name of great ideals at the base, we will end up with a mercantile system”, loose Stéphane Reverre. “We wonder how we are going to make money, this way of thinking permeates the blockchain and Web3.”
In the meantime, it is clear that more and more brands from the real world are trying to invest in this new virtual universe, like Nike, which launched its first digital sneakers sold in the form of NFTs, or Dolce & Gabbana which promises “a journey between real life and the metaverse” to purchasers of its non-fungible tokens. Web3, a new tool for making profits?
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Web3: Internet in the age of blockchain, a utopia?
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