How Web 3.0 can repair the attention of the digital economy?
Web 2.0’s faults have been on full display these past few months, from uneven creator economics and weak security to centralised control and unhappy communities.
First, last month, Frances Haugen, a former Facebook product manager, testified before Congress that the social media behemoth “chooses profits over safety.” Then, seemingly on cue, all of Facebook’s centralised services went down around the world. Because of the global outage, Facebook was unable to access its own servers.
After that, a dissatisfied anonymous hacker leaked a vast quantity of internal data from Twitch, Amazon’s popular streaming service. The hacker also advocated modifications, calling the community a “disgusting toxic cesspool” in an attempt to “promote more disruption and competition in the online video streaming industry,” with source code and payout details for top artists.
Despite these platforms’ growth, reach, and profitability, it’s never more clear that the old guard has gotten a lot of things wrong. The centralised version of Web 2.0, which was all about network effects, vast scale, and winner-take-all economics, isn’t working for society any longer.
It’s past time for a change. It’s up to us, as Web 3.0 entrepreneurs, to fix the fundamental problems of the previous generation of technology by establishing an open infrastructure that supports a more collaborative, creative, and user-centric internet.
Here’s how Web 3.0 addresses some of the most pressing issues in today’s digital economy.
Poor security and data controls
Pranks continue to plague Twitch, such as this one, which swapped backdrops with photographs of Amazon founder Jeff Bezos, a billionaire. Former employees highlighted weak security methods at the streaming behemoth, indicating that these security flaws were widespread.
We’ve all realised that any information we provide with a centralised body is vulnerable. Years of private data leaks from banks, merchants, and social media platforms demonstrate that nothing on the internet is truly private.
Because Web 3.0 is based on cryptographic primitives and frequently uses open source code, anyone can help by reviewing the code.This improves user security and makes transparency a competitive advantage. The benefits aren’t just for the sake of privacy; they also safeguard user value. @samczsun, a security researcher, has discovered potential attacks in protocols like 0x, Livepeer, Kyber, Nexus Mutual, Aragon, Curve, and others, potentially saving billions of dollars in lost value.
ERC-721-based NFTs may trade and be displayed on a variety of front-end applications thanks to interoperable standards, while ERC-20 tokens can access a full ecosystem of competitive financial products vying for attention and value. This agency raises the stakes for platforms that may face a user exodus in the event of a security incident.
Toxicity and platform accountability
Despite their unlawful and immoral behaviour, the Twitch hackers were correct in one respect: streaming platforms are becoming increasingly toxic, and huge tech corporations have struggled to respond in a way that matches the magnitude of the problem. Streamers, on the other hand, have no viable competitors in the Web 2.0 environment. They could switch to YouTube or Facebook Live, but then they’d be switching from one toxic, attention-economy site to another.
These realities live in a world where creators wield greater power than they ever have. Fans will follow their favourite creators to whatever platform they like, giving them a significant advantage. To avoid toxicity, creators want Web 3.0 technologies that allow them to move outside of the walled gardens and take charge of their own destiny through direct relationships with their audiences.
Web 3.0 also rebalances the power dynamic between users and platforms, giving consumers authority over their data. Web 3.0 platforms can make it easier for users to “vote with their feet” and shift from one platform to another thanks to interoperability and portability enabled by data management systems like Spruce.
Competitors can take advantage of opportunities as businesses like Conflux and Moralis make it easier to expand across blockchains and standards. When consumers found that NFT trading platform OpenSea may have been engaging in insider trading based on knowledge of which NFTs would be featured, other platforms like Action arose to address some of the NFT market’s alleged flaws. In the traditional Web 2.0 environment, which relies on scale and controlled access to strangle new competitors, such quick responses to market dynamics simply do not exist.
Web 3.0, on the other hand, extends well beyond direct user relationships.Because these platforms are user-owned and community-driven, the incentives for communities to moderate themselves are aligned. In the case of video streaming, no community wants hate raids to drive its most valuable members out.
Users in the Web 2.0 era must wait for the platform to respond. They can act via built-in governance and moderation systems in the Web 3.0 environment. Users vote on who gets to write and publish each week on the Mirror blogging platform. Listed projects on the Web 3.0 index have control over the addition and removal of subsequent projects, ensuring the ecosystem’s healthy growth.
The Facebook whistleblower also disclosed that the social media platform has a two-tiered justice system, with superstars being treated differently than regular users. While an ordinary account may be sanctioned for breaking the terms of service, an account with a large following may be able to get away with it.
Web 3.0 addresses this as well, with improved transparency and censorship resistance thanks to the immutability of the blockchain. Decisions are made in the open, using technologies like Snapshot, and are influenced by the general public. Governance takes place on-chain, where everyone can see it. There are no hidden agendas or two-tiered justice systems here unless voted on, of course. It’s purely community-driven, so if participants don’t like the direction or amount of transparency, they can simply leave.
Imbalanced creator economics
The Twitch breach shows a significant financial divide between top performers and everyday creators. These forces align the platform’s incentives with those of a small number of its developers. When a small number of artists make the majority of the money, the platform will direct attention to the most powerful influencers.
By democratising access and removing walls between creators and viewers, the Web 3.0 paradigm tackles these unbalanced incentives. NFTs, digital payments, tokens, and crowdsourcing, among other revenue tools for creators in Web 3.0, level the playing field in a creator-friendly fashion. Artists using platforms like glass.xyz have discovered that monetizing their content using NFTs combined with a compelling live broadcast is significantly more effective than merely selling through a Web 2.0 approach.
Users can also own personal platforms in Web 3.0, which are commonly coordinated by tokens. They have a motivation to provide vital services like moderating since they benefit directly from the growth of the platforms.
Users may also buy fan tokens to show their support for their favourite creators and create a positive feedback loop that fosters healthy fan communities based on a common interest. Platforms such as Rally, Socios (based on Chiliz), and Roll enable creators to directly monetise their reputation, authority, and originality without the use of middlemen. Because the creator is also the platform, the incentives are further aligned. Without intervention from a neutral third party, the creator can determine the norms of involvement and do what is necessary to sustain a healthy community.
An internet upgrade is good for society’s Digital economy
Having so much of society’s social fabric and economic systems depending on infrastructure controlled by a few private businesses is undeniably detrimental. The harm is worsened when firms escape accountability by making promises to reform that seem to go away once the spotlight has faded.
But it’s less about getting rid of Web 2.0 entirely and more about giving society the much-needed internet makeover. Web 2.0 tools have a huge positive influence, but there are tradeoffs: structural incentives in Web 2.0 have resulted in unaccountable and inflexible Big Tech monopolies. Web 3.0 evolves the internet to improve on the good of its predecessor by aligning economics and incentives across all users — Decentralized services have a big edge over centralised gatekeepers when it comes to culture and control. Web 3.0 provides a completely new approach to community building, empowering users with data portability and interoperability and re-centering incentives that encourage self-moderation.
“It’s not about breaking up Facebook,” Haugen says. Transparency and governance are the keys to moving forward.” We all deserve more, and in the next era of the digital economy, the services, platforms, and products that prioritise openness and community governance will thrive.