Computer scientist Gavin Wood coined the term “Web 3.0” in 2014, outlining his vision for the future of the Internet.

The phrase, also abbreviated to “Web3,” has become a buzzword on the Internet recently among prominent technologists, including Twitter founder Jack Dorsey and Tesla CEO Elon Musk, who are discussing the meaning of the term.

Wood, co-founder of Ethereum and founder of the infrastructure blockchain company Parity Technologies, spoke with CNBC in an episode of the podcast “Beyond the Valley” to discuss his vision of Web3.

What’s wrong with the current web?

Proponents call Web3 a decentralized version of the Internet – one that is not dominated by several powerful players such as Amazon, Microsoft and Google.

Web1 began with the idea of ​​an open and decentralized Internet, but Web2 – the Internet we know today – led to the birth of trillions of dollars of technology companies that have a strong influence on the Internet and have a lot of infrastructure created on the Internet. on.

“The big problem with this … is like putting all your eggs in one basket, if something goes wrong with one of these services, you know the service will suddenly become unavailable to a very large number of people,” Wood said in a podcast CNBC “Beyond the Valley”.

“Besides, the key word here is trust. We have to trust the people behind the services. We have to trust the owners of the companies that run the services … And yes, we managed to create our own in this, somewhat similar to the anti-utopian version of what there may be peace. “

So what is Web3?

For Wood, Web3 is a truly decentralized and more democratic version of the current Internet.

“Web3 is really a kind of alternative vision of the Internet, where the services we use are not hosted by one service company, but are purely algorithmic things that in a sense are hosted by everyone. So it’s kind of equal, isn’t it? … The idea is that all the participants kind of contribute a small piece of top-notch service, ”Wood said.

“And so no one really has any advantage over anyone else … not in the same sense, at least as you know, when you, for example, go to Amazon or you go to eBay or Facebook, where the company is behind the service really has absolute power over what they do in providing the service. ”

Basic terms and technologies of Web3

Blockchain is a key technology behind Web3. It is most often associated with the cryptocurrency bitcoin and is the underlying technology. Bitcoin blockchain is a public book of bitcoin network activities. But bitcoin does not belong to one company or person, and it is not issued by a central authority like a central bank. Instead, it is decentralized, and the network is maintained by a global group of people working on specialized computers.

Thus, blockchain is a key technology, and decentralization is an important phrase.

Web3 is based on the idea of ​​a “distrustful” model. Right now we need to trust the companies that provide the services they promise. But if Web3 products and services are built on blockchains and decentralized, then you only have to trust the basic algorithm to deliver that product.

This, of course, carries its own risks.

What might the Twitter version of Web3 look like?

Wood cited the Twitter version of Web3, which he said would give users more control over their messages and, for example, make it easier to verify identity.

“So it’s much harder for someone to like, to fake my identity, because we have … cryptographic evidence that I did it, and only I could do it,” Wood said.

“We probably have elements like more, like freedom of speech … in the sense that the system won’t have followers, since, as you know, there are Twitter staff who act effectively as gatekeepers to the system.”

Where does cryptocurrency come from?

Proponents of Web3 believe that cryptocurrencies will play a key role in the future of the Internet. An example is a Web3 application that runs on a specific blockchain that uses a specific digital coin.

For example, Ethereum blockchain services may require digital ether-based tokens.

Learn more about cryptocurrencies from CNBC Pro

Thousands of virtual currencies have appeared in the last few years. But Wood said Web3, as he imagines it, cannot rely heavily on cryptocurrencies.

“I suspect that currency will continue to play a role in services. But I think … in general, we will start to see services that will be provided without the need for tokens,” Wood told CNBC.

“And I think it’s going to be a big leap. And I think it’s one of the key factors that will open the door to the mainstream,” he added, suggesting that most people probably won’t want to buy a lot of different tokens to use the service.

How will the regulation work?

Bitcoin itself has never been regulated because it is very difficult to do given the fact that it does not belong to any person. However, businesses that somehow relate to cryptocurrencies, such as exchanges, often find themselves under some sort of regulation.

So, if the Web3 service is built on the same theory of decentralization as bitcoin, how will regulators approach this?

At the moment, countries around the world are still trying to figure out how best to regulate cryptocurrencies and related technologies. Web3 is part of this conversation.

Wood believes that it will be difficult for the authorities to self-regulate Web3 services. Instead, “self-interest” applications in terms of their product may be introducing rules that comply with regulators, Wood said.

He added that regulators could seek to regulate “users of the service, not the service itself.”

Will this be the end of technology giants?

Proponents of Web3 believe that with Web3 the power of technology giants can be questioned.

However, companies like Microsoft and Twitter are also investing in Web3.

Wood said it would “be difficult to make an entrance into these Goliaths,” but he compared their potential position to Microsoft’s in the late 2000s and coming years.

“It doesn’t matter if you’re running Windows or creating a document in Microsoft Word … we use the Internet as a platform, and the Internet can be used in any operating system,” Wood said.

“Ultimately … I hope that Web3 will meet the needs of the future in a way that can never be met by these centralized service providers,” he added.

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