The Age of Decentralization: Part 1: Web3's Place in Long-Term Tech and Industry Trends
Cover Image: Faces of Open Source by Peter Adams :
In the photo: 1. Yan Zhu, infosec contributor to projects including SecureDrop and Tor. 2. Ken Thompson, cocreator of Unix. 3. Vint Cerf, cocreator of TCP/IP. 4. Mary Ann Horton, creator of uuencode. 5. Keila Banks, evangelist. 6. Eric Raymond, author. 7. Limor Fried, open source hardware developer. 8. Larry Wall, creator of Perl. 9. John Osterhout, creator of TcL/Tk. 10. Sanjay Ghemawat, cocreator of TensorFlow. 11. Jessica McKellar, Python contributor. 12. Junio Hamano, maintainer of Git.
Placing excessive emphasis on tokens may give a false impression that Web3 is a completely novel discipline. But, when we move past the focus on tokens, it becomes apparent that Web3 is more of a progression stemming from long-evolving trends - comprising both technical and business trends.
The emergence of Web3 can be better understood by observing various technological trends preceding Web3 and we are discussing some of the trends in this article.
Technology Trends
Let us start with
The Open-Source movement. ?
The open-source movement has been a driving force behind the ethos of collaboration, transparency, and collective innovation within technology. Pioneered by seminal projects like Linux , which was released in 1991 by Linus Torvalds, and more contemporary platforms such as GitHub , the open-source philosophy has significantly influenced the evolution of collaborative development.
Platforms like GitHub, founded in 2008, have revolutionized the way software is developed and shared. Its infrastructure allows developers worldwide to collaborate, share code, and contribute to projects, fostering a culture of transparency and collective innovation. This democratization of software development has empowered a vast community of developers to work together, share knowledge, and collectively improve codebases.
In the Web3 space, this culture of openness, collaboration, and decentralization is deeply ingrained. Web3 projects, including blockchain-based initiatives, decentralized applications (dApps), and other distributed systems, often embrace open-source principles.?This is visible in various ways:
Transparency and Accessibility: Web3 projects typically adopt an open and transparent model, allowing anyone to access their codebase and contribute. This transparency builds trust and credibility, enabling scrutiny and verification of the technology.
Community Participation: Similar to the open-source ethos, Web3 projects encourage community involvement. They invite developers, enthusiasts, and experts from various fields to contribute their expertise, fostering a diverse and inclusive ecosystem.
Decentralization and Immutability: The very essence of Web3, often rooted in blockchain technology, reflects the principles of decentralization and immutability. The distributed ledger system, fundamental to Web3, aligns with the open-source ethos, ensuring that records are transparent, resistant to alteration, and accessible to all participants.
Iterative Development and Innovation: Just as open-source software continuously evolves through iterative development, Web3 projects regularly evolve as a result of ongoing contributions, improvements, and innovations by a community of contributors.
Another technology trend that contributed immensely to the growth of Web3 is the rise of
Peer-to-Peer Networks?
The growth of peer-to-peer (P2P) networks has significantly contributed to the foundation and evolution of Web3, leveraging the principles of decentralization and distributed systems. Pioneering applications like BitTorrent , introduced in 2001, marked a pivotal step in reimagining how data and resources could be shared and distributed across networks without reliance on central servers. The ethos of P2P networks laid the groundwork for the decentralized nature of Web3.
BitTorrent, an early and influential P2P network, redefined data sharing by allowing users to directly exchange files without the need for a central server. Instead of relying on a single point for data transfer, BitTorrent facilitated a collaborative network where users both consumed and contributed to the distribution of content. This shift in architecture decentralized the control and distribution of data, enabling users to participate in the exchange process, contributing bandwidth and resources to enhance the network's efficiency.
The rise of P2P networks like BitTorrent demonstrated the power and efficiency of a decentralized model. It showcased that a system where resources and data are distributed across a network of peers could effectively share the load and facilitate more efficient data transfer. This decentralized architecture ensured that data was not reliant on any single point of control, leading to improved reliability, scalability, and resilience against single points of failure.
The philosophy behind P2P networks aligns closely with the principles of Web3, which emphasizes decentralization, transparency, and peer-to-peer interactions. Web3 extends the concepts introduced by P2P networks by integrating blockchain technology, smart contracts, and decentralized applications. These innovations further democratize control, enhance transparency, and establish trust, redefining how digital assets, applications, and information are created, shared, and accessed across the internet. The foundational influence of P2P networks like BitTorrent has played a critical role in shaping the principles and development of Web3, enabling the rise of a more decentralized, collaborative, and distributed web infrastructure.
In my personal view, the assertion that Web 3.0 solely emerged due to the rise of blockchain doesn't align with the broader technological landscape. Tech trends were already signalling the progression towards a unified technology integrating various technologies, paving the way for a decentralized web. Another point is that Blockchain, while influential, is just one form of distributed ledger technology (DLT) among several others like Directed Acyclic Graph (DAG), Holochain, Hashgraph, and more. Therefore, the advent of Web 3.0 appears coincidental to the emergence of blockchains rather than being solely caused by it.
But, Web3 is not just a set of technologies but a new way of doing business. For this, we need to understand the business perspective.
Business Trends
This centers on how Web3 manages User Generated Content (UGC), distinguishing itself from Web2 in this aspect.
In the last series, we discussed that the rise of Web 2.0 gave way to the rise of user-generated content.?
The proliferation of
User-Generated Content (UGC)
has played a fundamental role in the rapid growth and monetization of website builders and online platforms.
User-generated content refers to any form of content, such as articles, images, videos, or reviews, created by users rather than the platform's creators.
Several key aspects contribute to the symbiotic relationship between UGC and platform growth:
Diverse and Abundant Content: Platforms that facilitate UGC, like social media sites, blogging platforms, and community forums, benefit from a continuous influx of diverse content. This dynamic, user-created material fuels engagement, attracting more visitors and prolonging their time spent on the site.
Network Effects: As more users contribute content, the platform's attractiveness increases, fostering network effects. The more content available, the more valuable the platform becomes for both users and advertisers, leading to a self-reinforcing cycle of growth.
Enhanced Engagement and Retention: UGC often leads to enhanced user engagement. Users are drawn to platforms where they can actively participate, share their thoughts, and interact with others. This increased engagement contributes to longer sessions and higher return rates.
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Monetization Opportunities: User-generated content creates multiple monetization avenues. Advertisers are drawn to platforms with high user engagement and plentiful content, allowing these platforms to generate revenue through advertising, sponsorships, or premium services.
Community Building: Platforms that thrive on UGC often cultivate strong communities around shared interests, contributing to a sense of belonging and fostering brand loyalty. This loyal user base frequently acts as advocates, attracting new users to the platform.
SEO and Discoverability: Constantly updated UGC can boost a platform's search engine rankings. When users create content relevant to their interests, it increases the likelihood of the platform appearing in search results, enhancing its discoverability.
Online platforms capitalized on these aspects of user-generated content to grow their user bases and generate revenue. By providing tools and features that encourage content creation and user engagement, they've successfully tapped into the powerful force of UGC, facilitating the creation of vibrant, interactive, and monetizable digital spaces.
User-Generated Content to User-Owned Content
As user-generated content (UGC) took center stage in driving the growth and engagement of online platforms, a pressing issue emerged regarding the ownership of this content. Over time, the question of who owned the content created by users became more prominent as its significance and quantity expanded.
Specific instances in the mid-2000s, such as YouTube (founded in 2005), Twitter (launched in 2006), and Facebook (established in 2004), highlighted the complexities of content ownership. In the early days of social media, these platforms initially retained broad usage rights over UGC, often outlined in their terms of service. By uploading content, users granted the platform a non-exclusive license to utilize the content for various purposes, including distribution and marketing within the platform.
However, disputes and concerns from users regarding their ownership rights led to policy revisions. Around 2010, YouTube clarified its ownership stance, acknowledging that users retained copyright over their content, but the platform maintained usage rights to manage, distribute, and display the content on its site. Similarly, around 2012, Facebook revised its policies to ensure that users maintained ownership of their content while granting the platform the right to use and display it within the social network.
Now, before we move forward, let us discuss
The concept of ownership
As per natural law, the rights of an asset owner generally include:
Right to Possess: The right of ownership allows an individual to possess, control, and utilize a particular asset. This possession is generally seen as a natural extension of an individual's right to personal autonomy.
Right to Use: Owners have the right to utilize the asset in a manner they see fit, subject to not infringing upon the rights of others.
Right to Transfer: This right allows owners to transfer their ownership interest to others, whether by sale, gift, or any other legal means.
Right to Exclude: Owners have the right to exclude others from using or accessing their property without their consent. This right to exclude is considered a fundamental aspect of ownership.
Right to Dispose: Owners have the right to dispose of their property, which includes the right to sell, destroy, or otherwise get rid of the asset as they deem appropriate.
So, who has a claim over any income generated from that asset??
Under natural law principles, an individual's rights to income generated from an asset align with broader property rights, such as the right to possess, use, transfer, and exclude others from the asset. The income derived from an asset is usually viewed as belonging to the owner by virtue of their ownership rights over that asset.
Now, coming back to our discussion on User Generated Content.?
We can clearly see that there is a conflict in how Web 2.0 platforms deal with user-generated content and how it should be as per natural law.?
Now, Web3 did not really pioneer recognizing and respecting user rights over UGCs. Many industries such as Gaming and creator economy platforms started recognizing creators’ rights over the content (or other kinds of assets) they create.
In the next articles in this series, we will discuss how some industries introduced various concepts such as virtual assets, tokens, trading of UGC, platform currency, etc. before the emergence of Web3.?
Let us conclude this article
with the observation that platforms that tried to implement decentralization, through UGC ownership and trading, without the use of blockchains could only achieve it to a very limited extent.?
The rights of an owner are not limited to claims on income and trading inside the platform. The owner also has rights associated with possession, transfer, and exclusion (i.e. limit other people from the access of the property), and the right to dispose. Many of these rights cannot be exercised without decentralized networks like blockchains.
In Web2 platforms, ownership of virtual assets hinges upon the platform's existence. If the platform ceases to exist, questions arise regarding the fate of these virtual assets.
Furthermore, a significant limitation lies in the restricted transfer rights within the platform itself, lacking interoperability, i.e. preventing access to the same assets from outside the platform where they were originally created.
In the next articles, keeping the theme of this series intact, we will discuss how some industries enabled decentralization before and with Web3 technologies.
??The Age of Decentralization is now available for pre-order on Amazon globally.
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