I am sure you have heard the phrase Web3 countless times. It instantly makes an article or a video buzz-worthy. Some question whether it is one of those hot trends that will soon fizzle. Some wonder whether it is truly revolutionary. Should we care about it at all at this stage?
But hold up. What is Web3 exactly? We have heard things like blockchain technology, cryptography, interoperability, and tokenization thrown around when people talk about Web3. To be honest, those big words make very little sense to me.
In my quest to look for a guide for dummies to understand Web3, I realize I need to first understand one key concept: decentralization.
Decentralization: returning control over online assets from central authorities to the masses
Avoiding data security risks
A few years ago, I received an email from someone claiming that they allegedly obtained evidence of me watching inappropriate content, and threatening to release that if I did not pay a ransom. The interesting thing is that the email addressed me by the username I once used on Redmart (a Singapore-based grocery shopping platform).
Not long before that, I received an email from Redmart saying that my email address and username were leaked in a data breach. I later found out that I was among the 1.1 million Redmart users whose information was stolen and sold online.
And that is how I experienced first-hand a consequence of a data breach in a centralized system. Even though the hackers did not gain access to my Redmart account, they gained access to a legitimate email address I own and took advantage of that for extortion.
This is not a standalone incident.
In recent years, there has been an increasing trend of data breaches where hackers broke into such systems to steal our information which could be sold and abused.
Well-known breaches include:
- LinkedIn (2021): 700 million users’ information, which includes email addresses, names, locations, work experience, and gender information, was put up for sale on the Dark Web.
- CAM4 (2020): 10.88 billion records of names, addresses, chat transcripts, sexual orientation, and IP addresses were exposed
- Facebook (2019): 533,000,000 Facebook records containing comments, likes, reactions, and account names were leaked for free
- Equifax (2017): the personally identifiable information of 143 million consumers, including names, Social Security numbers, birthdates, addresses, and in some cases, driver’s license numbers and credit card information was illegally obtained.
- Yahoo (2013-2014): 3 billion of its user accounts were compromised in a hack that took place in 2013-2014. The stolen data included names, email addresses, dates of birth, and phone numbers.
The current system of collecting and processing data centrally (or Web 2.0) means a single point of failure exists. With so much valuable information accumulated in one central location, there are incentives for malicious agents to exploit. Beyond ransom and extortion, stolen data can be used for identity theft.
In the United States, there were reports of laid-off workers who were unable to claim their pandemic unemployment payout because someone else had claimed it using their personal information.
Imagine if everyone in town knows that a bank has all of its customers’ wealth stored in its vault. It is going to entice robbers to attempt to break in and get their hands on so much concentration of wealth.
Gaining control over one’s own data
When we post that story on Instagram, we send data to the Instagram system.
The system records our data in its databases and then processes them. In this case, the system checks that we intend to show this story to our followers; and it fulfills precisely that. In a blink of an eye, our followers can see that story, and give us likes and comments.
But at the same time, the system does other processing that we might not know about (even though we most likely have given consent when we accepted the terms and conditions). It extracts information to construct a virtual identity that represents who we are: our preferences, beliefs, location, socioeconomic background, income level, and network.
We do not have explicit control over this virtual identity. Companies can use it to serve us better product experience; think Netflix’s personalized recommendations. They can use it to serve us more targeted advertisements; think Instagram ads, which always seem to know what we want before we even know it.
Collecting large volumes of data to extract patterns for better decision-making is not inherently good or evil. The problem is that corporates and governments have absolute control over that knowledge. And they have the ability to use that knowledge against us by censoring opposing views, shaping narratives in their favor, and manipulating people’s opinions on a subconscious level. Think how Facebook ad campaigns were used to shape the US Presidental election results in 2016.
It is a movement where people want to have more control over their data and how they are used. And it is not going away anytime soon.
And web3 is a landscape of technology that aims to make decentralization a reality. Things like blockchain, tokenization, and cryptography are concepts that very smart people came up with to construct a world where decentralization can really happen.
Next time we meet, we can dive into some of these key concepts. Meanwhile, there you have it: the one key thing you need to know about Web3.
