It seems that every day in the tech world we hear about the salvation that the new era of the web will bring by taking away mega corporations’ hold on user data and giving control back to the people (at least some of it).

But it isn’t until we read into the matter further that we see the terms Web3 and Web 3.0 thrown around, seemingly synonymous yet quite different. 

Web3 is the more commonly referred to aspect of the new web world and it incorporates concepts such as decentralization, blockchain technologies, and token-based economics.

On the other hand, Web 3.0 is otherwise known as the Semantic Web championed by father of the web, Sir Tim Berners-Lee, in an effort to correct his brainchild that has been led astray. His Solid project will have private information stored in decentralized data stores called pods that can be hosted anywhere the user wants. The project also relies on existing W3C standards and protocols as much as possible, according to Solid’s MIT website. 

When asked about whether he aligns with Web3’s version of the future at TNW’s 2022 Conference, he said, “nope” adding that “when you try to build those things on the blockchain, it just doesn’t work” – referring to the aspects of the web that would give power over data and identity back to the people. 

Web 3.0 holds promise in linking data together

The goal behind Web 3.0 has been to make data as machine-readable as possible.

The rules laid out for Web 3.0 as to how to link data are like the rules for writing an article, and how you should use links so that machines can read that information and understand the connection between different topics so that crawlers can learn effectively from that, according to Reed McGinley-Stempel, co-founder and CEO at Stytch, a developer platform for authentication. 

“I feel like when I interpret that today, as someone that has been trying to go really deep on a lot of the stuff that OpenAI has been doing, like GPT-3 and DALL-E 2, it feels like Tim Berners-Lee was way ahead of his time in terms of predicting that as you build smarter ML and AI, it would be really valuable if you had the context in a machine-readable form of what articles or content related to each other on the web,” Reed said. 

The two ideas for the new web differ in this regard, because the Semantic Web focuses mostly about how to actually present information at the machine-readable level on a website. On the other hand, the blockchain Web3 is much more focused on what is the back-end data structure for how this data is readable. 

However, this idea of data discoverability can be possible in some regards in Web3, according to Reed. 

“If you go to the heart of a blockchain, which is open data by default, obviously, there is some overlap here. Data discoverability mattered a lot to Tim Berners-Lee and his concept, and that can exist on the blockchain, because anything you do with your Ethereum wallet, or any smart contract that you interact with, is naturally searchable and discoverable. Though I think the intent for that data discoverability is different than that of Tim Berners-Lee,” Reed said. 

Similar goal, but a different way to get there

Bruno Woltzenlogel Paleo, STEM Lead at Dtravel, a native Web3 travel ecosystem that provides property hosts and hospitality entrepreneurs with the infrastructure to accept on-chain bookings, said that there are many articles that present Web3 and Web 3.0 as opposites, whereas they’re both just actually addressing different aspects of what people want to have from whatever follows Web 2.0.

“I think it’s perfectly possible for these ideas to coexist,” he explained, adding that they can even be complementary. “The Web3 notion coming from blockchain and cryptocurrency can contribute a lot to the economic incentives aspect, whereas the Web 3.0 idea from the Solid project can contribute a lot to the data storage and data ownership aspect.”

What people want from the new web is more participation and ownership over their data, more privacy over the data, and less dependency on third parties and intermediaries. The selling of user data for advertising has eroded the trust that people have in Web2. 

“The current technical solution from Web3, which in practice is Web2 plus blockchains, cryptocurrencies and smart contracts, doesn’t deliver the latter aspect yet,” Paleo said. “Tim Berners-Lee’s notion of Web 3.0 is very interesting and I think it addresses this need for data privacy and data ownership better than the approaches that currently exist in the blockchain space.”

Any kind of data can be stored in a Solid Pod: from structured data to regular files that you might store in Google Drive or Dropbox folders, and people can grant or revoke access to any piece of their data as needed.

All data in a Solid Pod is stored and accessed using standard, open, and interoperable data formats and protocols. Solid uses a common, shared way of describing things that different applications can understand. This gives Solid the unique ability to allow different applications to work with the same data, according to the Solid project. 

There’s a challenge to monetize Web 3.0

However, Paleo said that he doesn’t see anything in Web 3.0 to address the economic incentives.

“It’s not only a matter of finding a solution that allows people to easily own their data and migrate the data,” Paleo said. “There’s also an economic problem that people don’t want to store their own data and then, for somebody else to store their data, let’s say for Facebook or Google to store the data, there has to be some economic incentive and in Web 2.0 the incentive is the monetization of that data. But in the Web 3.0 idea, I just don’t see how he’s proposing any alternative to that monetization of data being proposed.”

On the other hand, Web3 has the profit motive because Web3 companies can provide services or tokenize their business model. 

Challenges for developers in Web3

While Web3 is poised to disrupt the web as we know it, it’s important for developers to understand that they’re not moving away from Web 2.0 but rather will continue to use the usual software development tools and add some extra components from Web3, according to Paleo.

“This is not something that’s going to happen over the next five years, or probably even 10 years, but maybe even longer as infrastructure develops and becomes easier for people to store their own data or to hold on to it,” said Cynthia Huang, head of growth of Dtravel. 

A big thing that developers have to watch out for is that some types of data are best not stored on the blockchain. Because transparency is really key to blockchains, and to Web3, it doesn’t really work well for data that you don’t want to be public. For example, if you have medical records, it doesn’t make sense for you to store that on the blockchain, Huang explained. 

Another challenge is that developers not only have to consider the front and back end of an application, they’ll also have to consider the smart contract layer and then the communication with the blockchain. 

“It’s challenging to decide what parts of an application logic should go into the smart contract, and what parts should be handled by the back end, for instance,” Paleo said. “And just because you’re using smart contracts, it doesn’t necessarily mean that magically you will gain the benefits from blockchains.”

Developers have to design in very specific ways to gain benefits from blockchain. 

“When people use blockchain, they typically talk about less reliance on trust and more independence from third parties and intermediaries, but if you implement a smart contract in such a way that you have absolute power to modify the smart contract anytime you want, then your users are still dependent on you as a third party and intermediary,” Paleo said. “So you must implement smart contracts in ways that really deliver those goals of immutability and reduction of the need for trust.”

Many people are still not familiar with cryptowallets

Also, many people are still not used to using noncustodial crypto wallets like MetaMask, and are still used to the Web2 way of paying for services with credit cards. 

“If you want to make a project that is crypto-native that is purely Web3, then to pay for things on your website, users would have to connect their MetaMask wallet and they would have to fund that MetaMask wallet with the base currency of some blockchain to pay for gas fees,” Paleo said. “So this creates entrance barriers for the users and friction for users who are new to blockchains and cryptocurrencies, which is a big challenge for developers in Web3.”

Because tokenomics might open up new revenue streams that don’t involve selling user data, holding users’ data may become a liability or a risk that is best avoided. so it’s in the interest of companies to not hold onto data anymore. 

Paleo said that there are some interesting approaches such as the IPFS (interplanetary file system), Filecoin, and the Web 3.0 idea of Tim Berners-Lee that can help solve this problem.

Web3 adoption in practice

Currently, a lot of Web3 adoption is driven by Web2 companies wanting to add Web3-native features into their products, according to Reed. For example, Twitter allows users to link their NFT to their Twitter profile. 

“The most traction we’re seeing with Web3 use cases are offerings within Web2 use cases that already have distribution. I think a lot of Web3 apps are still trying to prove why should you use this app over Twitter, Uber, Lyft, Facebook, or Google, because I think there are real UX questions about whether it’s worth the tradeoff at this point, which is why it seems to be that the hybrid approaches are gaining more traction from our vantage point,” Reed said. 

Also, not everyone wants the tradeoffs that Web3 would bring if it means sacrificing UX. 

The origin story of the Web3 idea is that people didn’t want to be locked into a walled garden of large Web2 platforms that have immense control over everyone’s digital lives. But, a lot of users don’t want to purely exist in a world where there’s bad UX, but you have complete control of your data.

“A lot of companies think there are interesting technical pieces and cultural trends coming up with Web3, and they’re interested to adopt that. They’re not immediately running everything on the blockchain. They see tons of value in their core Web2 platform and products. And they see value and also being able to appeal to the users that are very interested in when Web3 NFT’s. And so they just see it as another feature they can offer,” Reed said.