Part 2 – From Internet2.0 to Web3
It’s funny to think of the 90’s being over 20 years ago. If you asked most people who lived through them they would likely say it barely feels like more than a decade, if not less, since the Cold War ended, the Berlin Wall fell, and a small Government Defense Project ushered in a new Age of information and progress.
Dotcom Bubble
The Age of Technology – sparked by the World Wide Web.
In the mid-90’s the Internet became a tool accessible by the public and by 2000 was widely used by the mainstream. Accordingly, thousands of businesses fought for space as they attempted to capitalize on the emerging markets and technology made available by the Web and the unprecedented platform it offered. During the first several years of the Internet there was no governing body, no regulations, and very few rules regarding conduct, direction or oversight.
Basically, it was the Wild West.
A place where prospectors could try their luck against mercurial elements and unfamiliar, often hostile, territory in hopes of striking gold and becoming rich. Some few people and companies made an honest living by capitalizing on the opportunities presented by the new territory, while many others could not meet the demands of the new world and withered away.
There were also predators. Opportunistic actors that used the lawlessness of the unregulated internet to exploit businesses and individuals.
ICANN
The law came a knocking in the form of the International Corporation for Assigned Names and Numbers (ICANN). Created by the U.S. Government, ICANN took control of the internet in 1998 as an independent, non-profit, corporation tasked with global governance – basically, the UN of the internet. It is responsible for Policy and Oversight, management of Domain Name System (which they contract out to companies like GoDaddy and Encirca) and Top Level Domains or TLDs (.com,.org,.gov, etc.).
Things were still somewhat chaotic until in the early 2000’s, when the venture capitalist money dried up and the self-regulation of a capitalistic market finally kicked in, the Dotcom Bubble collapsed dragging many businesses down with it and leaving a much smaller, more manageable internet run by a few major players (Google, Amazon, etc.).
Internet 2.0
Bringing us to the Year of Our Lord 2022. 4.5 billion users and over two decades worth of technological progress has left the internet unrecognizable from its younger self, with two exceptions – most of the same major players are still heavily involved, and ICANN is still the only governing body.
Technological advancements have made the internet accessible to billions of people and caused it to grow exponentially since the early-2000’s. Understandably, ICANN, being a non-profit, government organization, has been unable to grow with it. Mired in issues of Accountability, bureaucracy and red tape, ICANN does not have the infrastructure to properly regulate the internet at its current size and is unable to facilitate its growth and development.
Accordingly, a new internet is starting to take over. Built using Blockchain Technology it was originally used for Decentralized Finance (DeFi) but has since grown into what is now called web3.
Blockchain
Blockchain is a decentralized database shared among the nodes of a computer network. Basically, instead of having one massive, corporate owned, warehouse that houses an entire database, that database is spread across thousands of computers all around the world. People “rent” out part of their computers processing power and are paid in crypto for the trouble. This means that no one person/company/organization can own it.
Blockchain also differs in the way it stores data. Every time a new piece of information is inputted – whether that’s a crypto transaction, NFT purchase, Smart Contract, app upload, website creation, etc. – that information is transformed into a block, validated or mined* and secured. If more information is added to the original (i.e. an NFT or crypto changes hands) then a new ‘block’ is created and linked to the previous one, creating a chain of information.
Note – Crypto Mining: the process of using advanced algorithms to validate a new block of information and ensure that the data is correct. The algorithms act as a firewall which must be validated by a person in the Blockchain before the block is added. Each computer, or node, in the chain is capable of Mining, but not everyone participates.
Once a block is completed, it is impossible to alter. Nothing can be changed, modified, or updated. Information can be added via another block in the chain, but the original information cannot be altered. Not only is the information immutable, its history is also open and available to the public. Any person who wants to see how many times an NFT has been bought and sold, or if an article or website has been updated or altered, simply must follow the Blockchain.
Decentralized Finance (DeFi)
Blockchain was first used to create an alternative currency not subject to the regulations and demands of any government or economy – a little token called Bitcoin. Originally introduced as a digital asset, with a finite number of Coins available, Bitcoin is now one of the foundations for Decentralized Finance (DeFi) and the crypto economy.
It is akin to the way gold is collateral for a nation’s currency. Originally broken down into smaller pieces to be used in transactions – owners selling small fractions of one coin – banks eventually collected a large amount of coins and distributed currency instead, in this case creating new cryptocurrencies. Simply put, it lays the tracks for a new economy.
On web3 there are people investing money, businesses being funded, and companies lending and borrowing to drive growth of myriad markets. It is an entirely decentralized world of finance offering the same services as a central bank without the Third-Party oversight.
Web3
Where the money goes, people follow. DeFi was only the start of the new internet, and it has expanded in countless directions. Apps, gaming, music, social media, banking and so much more, all accessible through blockchains such as Ethereum (think Google with more user interface). As it becomes easier to access and navigate more and more people are adopting the new platform and shifting to the rapidly growing economy of web3.
Much like the pre-ICANN, wild west of the internet, the next few years are going to be abound with opportunities for those who act early; but also fraught with danger for the unprepared. Forward thinking companies understand the inevitability of web3 and are adapting, but they are not doing it alone. Even the biggest companies need help navigating the new territory, and when it comes to web3 there is no better guide than Encirca.
For decades Encirca has been working in the web3 space, building a foundation from which their partners can flourish. Encirca’s experience in the space gives them insight to threats and opportunities, both current and in the future, and their unique algorithm allows them to identify which of the thousand competing platforms will be dominant in the years to come. Encirca has a history of protecting its customers and strategically picking the companies and platforms that will ensure their success
In the next article we will dive deeper into how companies like Handshake and platforms such as Ethereum are contributing to web3 and the DeFi movement, what differentiates them from the competition, and what opportunities will be available in the future.
About Author
Luke Bowden graduated from University with a Bachelor of Commerce, specializing in Finance. He spent several years working across a variety of businesses before deciding to apply his experience and expertise to the emerging opportunities available with Blockchain and web3. Luke resides in Vancouver and is a part-time Freelance writer, passionate about new technology and excited to educate people about emerging markets. Linkedin: https://www.linkedin.com/in/luke-bowden-aa863799/