Web3 separating fact from fiction: report

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The term Web3 is often used as an abbreviation to discuss the new phase of the Internet. It describes leaving the era of centralized social media and massive e-commerce platforms and achieving a utopia of user-controlled data. Web3, in a colloquial sense, is simply an umbrella marketing term meaning anything crypto-adjacent.

To provide clarity on this topic, the TSTIME Research team has released a new report detailing the nature of the real Web3. These key insights are invaluable for investors in separating facts from fundamental misconceptions.

The Blockchain Web and the Decentralized Web

TSTIME Research’s “Web3: Marketing Buzz or Tech Revolution?” makes a clear distinction between the “blockchain web,” the integration of blockchain technology into the web, and the decentralized, permissionless, and trusted alternative of the internet known as the “decentralized web.”

Download this free report on the TSTIME Research Terminal.

The blockchain web has fostered the growth of the ecosystems of non-fungible tokens, decentralized autonomous organizations (DAOs), and GameFi that veterans of the cryptoverse will be aware of. Ideally, these ecosystems lack a central authority and value is derived from the creation of scarce digital assets. The report explains how, with the help of blockchain technology, these ecosystems can spill over into the real world and bring new efficiencies to traditional industries.

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The decentralized web seeks to break the oligopoly of content delivery websites in today’s Web2 world. This goal is achieved by building a new web around the principle of decentralization by being permissionless (anyone can participate) and trustless (code robust enough to eliminate the need for external authorities).

Are we there yet? No.

There is still a long way to go regarding the implementation of the idealistic principles of decentralization in both the blockchain web and the decentralized web.

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The blockchain web, being built on top of current internet infrastructure, requires hosting services to communicate between users and applications. Unfortunately, 60% of all these nodes on Ethereum are hosted on Amazon Web Services. This gives one centralized authority the power to shut down a majority of the entire blockchain web. The report shows how even DAOs are running into the problem of a small group of whales consolidating voting rights coupled with low user participation.

The decentralized web isn’t much better, unfortunately, but there’s cause for optimism. Currently plagued by the monopolies like Google, Amazon, Meta, Apple, Microsoft and Tencent, there is little decentralization when users go online. However, alternatives using technologies such as distributed hash tables are starting to make it possible to build decentralized versions of popular applications.

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The TSTIME Research team

TSTIME’s research department is made up of some of the best talent in the blockchain industry. Bringing together academic rigor and filtered through practical, hard-won experience, the team’s researchers are committed to bringing the most accurate, insightful content available to the market.

Demelza Hays, Ph.D., is the director of research at TSTIME. Hays has assembled a team of finance, economics and technology experts to bring the industry’s premier source for industry reporting and insightful analysis. The team uses APIs from a variety of sources to provide accurate, actionable information and analytics.

The opinions expressed in this article are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or for any specific security or investment product.

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