What is Web3? Definition, Real-World Use Cases, Top Protocols and More

Panel Discussion Recap

Dennis Shiao

What exactly is web3?

To kick things off, Raman asked the panel to provide a definition of web3. Specifically, he asked panelists to frame what web3 is in relation to Web 1.0 and Web 2.0. FlickPlay’s Pierina Merino said that two of the most important components are interconnectivity between assets and how people can interact with them.

“It’s about ownership and how these assets can move across different platforms while interacting with you in real-time. Web 2.0 was about keeping assets in a single space, while web3 allows you to own them and interact across multiple spaces,” said Pierina.

Gianni D’Alerta had a similar definition, noting that web3 is about the interoperability between different things. Web3 enables users to take back control and ownership. It also enables them to have sovereignty over their data. Gianni said that in Web 2.0, identity in social media was centralized by platforms like Twitter and Facebook.

In web3, individuals own their assets. For example, an NFT can be used on Facebook, but you can also use it on your phone. Ultimately, you’re the owner of it. The same can’t be said for web 2.0.

According to Barron Channer, “Web 1.0 was static. You read information on a website, you read emails. Web 2.0 was interactive and social media became the biggest expression of that interaction. Web3 is decentralized. There’s a lack of a central authority. There’s some level of anonymity, which allows you a level of individual freedom. And there’s also individual ownership.”

Michelle Abbs brought us back to a 1994 episode of the TODAY show, in which co-hosts Katie Couric and Bryant Gumbel asked, “What is the Internet?” During the show, they discussed the “@” symbol used in email addresses and wondered what we should call it. Later, when Facebook emerged, Michelle wondered why she’d post information about her life on a website. Michelle says that we’re in a similar moment right now with web3. Years later, we’ll look back on these years and say, “remember then?”

What are some real-world use cases of web3?

Raman asked the panel to provide real-world use cases of web3.

Gianni spoke about artists in Cuba. Before the pandemic, they were dependent on tourism since tourists were their biggest customers. When the pandemic shut down travel, these artists were not able to sell their art.

With web3, the artists can put their art online and use non-fungible tokens (NFTs) to sell them. An NFT, Gianni explained, is a deed or title to a digital asset. Artists can now sell their work to anyone in the world. The sale provides them with ETH (also known as ether or Ethereum), which they can use to buy things.

The artists can also build organizations without a central authority using blockchain and smart contracts – something known as a Decentralized Autonomous Organization (DAO). A collective of artists can sell their art together and pool their sales into a treasury. They can collectively decide whom to hire to provide services, such as marketing.

Barron mentioned a service called Royal, which gives artists an opportunity to monetize their fan bases. Supporters can fund the artists and benefit from some of the music’s royalties. Barron said that over time, the distribution mechanism for music will become decentralized. We’ll see an ecosystem of musicians without involvement from conventional record labels.

Michelle spoke about sneaker brands. Instead of people waiting in line for a shoe drop, a brand can reward them for being early-adopter members of their community. She also referred to art and collectibles. In art, “provenance” refers to the history of ownership. Michelle noted that the blockchain establishes the provenance of a digital object. For collectors, Michelle said that the concept of an NFT connects with them since web3 validates their ownership of the original asset. Here’s an NFT 101 video featuring Michelle:

The Twitter feud over web3

Raman asked the panel to comment on this famous tweet from Jack Dorsey, CEO of Block and former CEO of Twitter:

Dorsey wrote (in part): “You don’t own “web3.” The VCs and their LPs do. It will never escape their incentives. It’s ultimately a centralized entity with a different label.” a16z’s Marc Andreessen blocked Dorsey on Twitter. The feud was much talked about on Twitter in late December and January.

According to Pierina, things don’t have to be black or white – centralized or decentralized. The sweet spot is somewhere in the middle. Pierina said we should put consumers in a position of power for what they own and how they interact with those assets. There needs to be a certain level of centralization, but at the same time, creators should have flexibility. For instance, you should be able to take your followers with you to another platform.

Pierina provided this great quote:

“Your community will be part of your social real estate on the web.”

Michelle saw the positive side of the Twitter feud – sparking important conversations we need to be having about web3. Michelle said that everyone is so excited about web3 and the energy is so positive that it can be dangerous. People might forge full speed ahead without taking everything into consideration.

For example, Michelle asked if there is a shadow side to decentralization. What happens if you click on a link in Discord and lose the contents of your crypto wallet? Today, there’s no recourse: you lose.

(Note: Recently an art gallery owner had $2.2 million worth of NFTs stolen. OpenSea froze the stolen assets. Read more about it in a Cointelegraph article “OpenSea freezes $2.2M of stolen Bored Apes”).

Michelle said that perhaps web3 needs a central body similar to the FDIC that can protect consumers.

Lightning round on crypto protocols

In a lighting round, Raman asked the panel to answer the question, “Which protocol is producing the most utility?”