If we want to understand what is happening in an area, it is beneficial to follow where the biggest money is flowing (“follow the money”). The same rule applies to the development of the web business applications. It could also be a good way to explain what stage of web development we are in, and what awaits us in the near future.
How Can A Brief History Of The Internet (Web 1.0 And Web 2.0) Help Us Understand The Current State Of Web Development?
It is commonly said that the main feature of Web 1.0 is visits to various websites, and the main feature of Web 2.0 is the dominant use of different platforms (platform web). So the key words are visit and use.
If we look at the development of Web 1.0 in the USA (1994-2005), then we had a typical example of a dominant player in classical sales (e-commerce) such as Amazon.com, which at that time allowed other individuals and companies to earn money from selling products through the commission (so-called affiliates). The dominant player in the field of advertising revenue was the service Doubleclick.com, which brought together large online advertisers and enabled the large media/portals to earn money (during the 2000s, Google bought this service). In addition to these portals/services, there were many other portals/services which had enough users to enable good earnings.
In the case of Web 2.0 in the USA, the initial emergence of different types of digital platforms for different purposes (2004/2005) soon fused in several giant platforms (2009/2010) – the so-called GAFA group (Google, Amazon, Facebook, Apple). In practice, a very small number of dominant platforms (eg Booking, Envato, Netflix, etc.) affect the revenue distribution of most companies online and offline (platform/marketplace business model). Google and Facebook have been taking over 50% of all money spent on online advertising in the world for years.
Note! China and Russia are the only countries where the development of dominant web 1.0 and 2.0 portals and platforms was completely different compared to other countries.
What is Web 3.0 and what are the main differences compared to Web 1.0 and 2.0?
To answer the question of what Web 3.0 is, we must first understand the difference between the previous stages of development and the time in which we are now. Web 1.0 vs Web 2.0 now… let’s go!
A common feature of Web 1.0 and 2.0 is that they were in widespread use very quickly after their inception, because in a short time (1994/1995 and 2004/2005) appeared a large number of websites/services that used then new technologies which enabled web to develop at that time. However, from a technological point of view, it took years for significantly better technologies to be widely used (eg the emergence of XML/RSS technology as one of the keys to the development of Web 2.0 occurred in 1998, 6 years before the first mass appearance new types of web services!).
Unlike the earlier two phases, the current innovative development of the web is much slower when we look at the widespread use of new technologies that are making this “shift” to what we call Web 3.0. It looks like that web technologies are already saturated and that there are no real need for breakthrough decentralized technologies.
Am I the only one having deja vu here?
Blockchain technologies and cryptocurrencies, of which special emphasis is on NFT, AR/ VR, AI, semantic web, interoperability, and even Metaverse (as a unifying concept of all these different technologies) are different types of (advanced) technologies, some of which are big time in use in business already for years, but they are still used by a very small percentage of individuals and companies.
They have not yet crossed the chasm in adoption curve. We know that most of these technologies will become dominant at some point, but that will not happen for many years to come. Why is it so?
The thing is easy to explain. Web 3.0 is not an upgrade from Web 2.0, it is a completely new technology stack that needs to be invented and polished from the ground up. It is easiest to understand with an illustrative example.
I like this opening scene from my favorite Enterprise tv series where first Enterprise with WARP speed begin exploring, it shows evolution of discovery:
Now, there are a large number of different definitions of what Web 3.0 is, depending on the angle (direction) of web development – IT technology observation, observation from the context of business technology development, observation in the context of developing the quality of individual user experience and his/her privacy.
One definition of Web 3.0 is: Decentralized data connectivity over the Internet to provide a faster and more personalized user experience.
The main differences in understanding the individual stages of web development can be seen through observation of:
- development and use of new IT and business technologies
- the ways to ensure protection and security of these systems
- the ways of collecting and interpreting data
Since 2018, with the advent of GDPR law in the EU, it has become increasingly important to observe the development of the web in the context of ensuring the protection of users’ privacy.
Centralization and Decentralization of the web from the perspective of Political and Economic factors of development from web 1.0 to web 3.0
The Internet was created in 1968 as a decentralized network of computers (servers) through which data could be (relatively) easily transferred from one end of the world to the other, as NATO’s response to the nuclear threat of the USSR.
Yup, the internet was already decentralized in the beginning!
In the 1990s, the rapid commercialization of Web (from today’s perspective web 1.0) can be seen as the very successful beginning of global aspirations of the (neo)liberal capitalism (globalization that best suits a small number of huge companies)… although, web 1.0 itself was a fairly decentralized environment.
In recent years, legislators are becoming more and more aware of how certain huge Internet companies have (legally) gained their dominant position, so the aspirations of individual countries to limit the monopoly position of these globalized companies are becoming more pronounced.
For example, governments are trying to find a way to tax these internet companies. Streaming services like Netflix are using broadband infrastructure which is making them lots of money, but have not participate in setting up the wires to households.
All these tendencies clearly show the direction towards the re-establishment of decentralized web development, which is one of the main features of what web 3.0 basically is. But it will take many years before the web is dominantly decentralized again.
Industry 4.0 and Web 3.0 – Easy application of advanced technologies, BUT NOT TODAY!
One of the main characteristics of all dominant digital platforms is that they can be widely used by people who do not have to know anything about it (“for dummies”), but still successfully perform the job because of which they came to the platform (excellent user experience). These digital platforms use very advanced and sophisticated technologies to provide such a great user experience, and the user generally knows nothing about all this – he just does what he wants to do easily and quickly.
Same these dominant platforms have long been in something called Industry 4.0 and Web 3.0, but they make up less than 1% of all global companies.
The essence of the current development of classic and digital business is how a dominant number of companies adopt the use of advanced technologies in their field of business in order to achieve maximum customer/consumer satisfaction. This is basically the goal of Industry 4.0 and Web 3.0.
The problem is that for the usage of these advanced technologies by most companies today, requires advanced business knowledge and advanced use of these technologies.
It is expected that after 2025, an increasing number of different services will appear, which will enable a large number of companies to start successfully applying advanced technologies in their business without much knowledge. However, even then we will not have web 3.0, but rather web 2.5, which is. web 2.0 with the lements of web 3.0!
Example: You can think of this type of service as a platform for Facebook or Google advertising – Facebook or Google Ads Manager are very sophisticated platforms that are adapted for use by companies and individuals with very different levels of knowledge about advertising. Both beginners and advanced users of these advertising platforms can achieve smaller or bigger effects, without knowing the advanced technologies that enable the effects of such advertising (therefore these two companies, among other things, hold over 50% of digital advertising revenue worldwide).
Examples of services from which users are expecting much simpler versions for use in the coming years are marketing and sales automation systems (CRM), business automation systems (ERP), etc.
The real benefits of web 3.0 will be way easier/less hustle way to use everything that we are using today like “one click” payments where identification has also done in that one and only step.
How Digital Platform Became Dominant: Understanding, Applying, and Selling of Web User Behavior Data
When comparing any high-quality online service (digital platform) with competing services from the same industry, the difference is always on the side of those online services that provide realistically greater customer satisfaction. The clearer the difference in user satisfaction, the greater the competitive advantage of online services that provide such a quality of service (perception of customer satisfaction).
The real higher customer satisfaction compared to the competition mostly depends on the following factors:
- Method of collecting data on the behavior of online service users.
- Method of analysis of this data.
- How to draw conclusions about what this data means in the context of improving the user experience.
- The way of applying the obtained insights from the data into concrete ways of improving customer satisfaction through all business processes in the company (Experience-Driven Business).
- The way of measuring and understanding the results of all these activities, in the context of the interests of users and the interests of the company.
The main challenge here is what IT experts started calling long time ago “garbage in, garbage out.” So the key is creating system with semi-garbage in, and excellence out.
The reason why very few companies around the world successfully improve customer satisfaction, and thus come to a dominant position in their industry, is the great complexity of this job:
a. The method of collecting, analyzing and drawing conclusions based on data held by the company.
b. The way of applying the acquired knowledge through various business processes.
c. The way to change business, products and services that lead to improved customer satisfaction.
Example: The success of the social media TikTok or streaming service Netflix lies in their ability to give high quality content recommendations in relation to user interests. The entire service at these companies is based on the application of knowledge about user behavior in order to come up with a quality way of recommending content.
All dominant digital platforms use knowledge of their users’ behavior to sell that knowledge to other companies to make them more successful in their business.
That’s the answer to why Google has developed so many free services for its users – “If you get free content or service, you pay for it with your behavior!”
From the above, it would be logical to conclude why lately more and more countries and communities (eg the EU) are emphasizing strict adherence to the law on personal data protection (fight for data privacy).
Web 3.0 Basics – Who can sell your personal information and under what conditions?
The basic question that arises in the context of data privacy protection is: Who owns the data about your behavior – Is it the company that collected your data, or are you as the user the owner of the data about your own behavior?
The next question that arises is: If you are the owner of data about your behavior, under what conditions can the company that collected such data sell your data to another company?
The increase in the knowledge of various government administrations about the importance of insights from data on the behavior of individuals and their (re)sale, has led to the fact that we are witnessing an increasing number of lawsuits by individuals, companies and countries (community – EU) toward dominant platforms because they are violating privacy of individuals.
In this context, different platforms are trying in different ways to defend their ability to sell this knowledge about the behavior of individuals, especially if it is the basic way for such companies to make money (like Google, Facebook).
Example: Very interesting is the current Google solution for aggregate data collection (data collection) on user behavior that this company intends to offer to its advertisers, called “The Topics API.” 01/25/2022 Google published an explanation of collecting and storing data this way, where data on topics of interest of individuals are collected on one week basis, stored on the device of the data owner (individual), deleted after a week, and replaced by new data. User can manage this information himself. This data will be offered to advertisers on Google, where the privacy of the individual when selling knowledge from this data is thus protected.
At least that is what Google is explaining. You know their slogan “Don’t Be Evil.” The point of web 3.0 is that Google (or any dominant internet platform) CAN’T Be Evil. For now that is by choice.
The reason why Google’s solution to aggregation of knowledge from data is interestingly described is the fact that this data is stored with the data owner, not with Google.
As we can conclude, there is a long way to go from storing data with their owners, so that user can be able to sell the use of his data over which he has control, rather than the site/service that collected such data.
This problem should be solved by Web 3.0, but the question arises as to how many years it would take for this to happen to most online users?
What is Web 2.5? How many free content and services will become inaccessible to many because WE WILL HAVE TO PAY for them?
Based on everything you have been able to read so far in this article, it should be obvious that web 3.0 is much more the future than the present for vast majority of users/companies.
At this time, it is obvious that there is a large activity of tribal-like communities of users in the cryptocurrency market, in which new business and money making models are emerging that are focused on increasing usage of existing cryptocurrencies, the news are showing how some users in this segment are earning millions of dollars every day.
But what is happening in the crypto space today will hardly ever become the dominant way to use the web. There are big promises, but these promises are like saying that all machines will be run by steam engine one day, soon after the steam engine was invented.
In the context of web development, blockchain technology, which is the basis of the existence of the crypto world, is much more important than the cryptocurrencies themselves due to the way data is protected. In the future web 3.0 world, this technology should be the backbone of the ability to protect and control the use of personal data of an individual.
Perhaps the most interesting of the entire crypto/blockchain world is the Distributed Autonomous Organization (DAO) system, which is one of the best ideas so far for distributing value (not money primarily) in relation to the provided value (performed tasks). A large number of people are very skeptical about the possibility of more serious development of the DAO (currently there are only a few dozens organizations of this type) and its probable entry into mainstream business.
What most web users can see more and more today is the growing number of websites, services and media trying to charge for their previously completely free services and content. There will be more and more of that in the future, and we can only hope that great services such as Netflix will appear in this context for a single subscription to different types of media services. This is where utility tokens will come to the expression in realizing their potential.
The most prominent service that provides funding for individual content authors is Patreon. Even in third world countries is growing number of people who earn enough to live on with help of such services, so that they do not have to depend on increasing web traffic, which brings less and less money from advertisements through dominant platforms.
It is almost certain that more and more business ideas will appear in the coming years that will enable additional or primary earnings for content authors, with the goal of freeing their creativity beyond the need for increasing visibility of what they do (quantity does not give birth to quality).
Will Web 3.0 happen?
The road towards decentralization of the web for most online users is long and difficult, and many believe it is a utopia – from the standpoint of how the web work today.
The crypto is a reality, but for many it still seems like a covert MLM scheme, where big money is earned and spent on “things” (eg NFT – “digital originals”) that have a very questionable real/intrinsic value. If I ask myself, everyone’s mouth is full of values, and the value is only in the promise that one day, that something that you can own digitally will be something big and important.
Those who participate in the development of the Web 3.0, those who believe in the crypto world, those who develop the 3D Web, believe that Web 3.0 is here. The way we experience the web will almost certainly change – it will no longer be graphic displays on a small screen, we will be able to project ourselves into a virtual world, surrounded by, say, 3D holograms.
Much more important than whether Web 3.0 is the distant future or the present, is that today it can be seen very obviously that there is again a growing difference between different subcultures, as was the case before negative centralization of the web, which, among other things, brought us conspiracy theorists of various types (post-truth).
The NFT is the cultural shift where people are starting bragging with digital items. Or is it? People always used some characteristics of belonging, for example that is the reason families got their names which is our surname. Families clustered in tribes, tribes clustered into states after all. Native Americans used feathers to showcase their status, winners in the sport competitions were given medals to wear around the neck so that everyone can see it.
NFTs are feathers 2.0… Or 3.0, or 2.5, it does not matter after all how we call the next emerging step in the (r)evolution. At the end of the day, what is important is for us to understand where human society is going, and to use the situation in our advantage.
Being innovator and early adopter will help you navigate towards the brave new weird world, in which we will be old weirdos in the eyes of new generations. So follow where the money (web 3) is going.