Although the Internet has existed for less than a century, several historical periods can be distinguished in its development. After the advent of computers in the 1950s, the concepts of global computer networks began to take shape; later, these were closed military developments. In 1969, by order of the American agency DARPA, the ARPANET network was created. Then, in 1984, large civil networks appeared: on the basis of ARPANET, the NSFNET network was created to transfer information between universities. The 1980s saw the rise of personal computers and thus began the Web 1.0 era.
Web 1.0 is a term that generally describes the period when the Internet was already a civilian technology, but the “dotcom bubble” of 2001 had not yet arrived. In those days, the connection was slow, website design was primitive, and the Internet was owned by a relatively limited audience and had little effect on economic life.
Everything changed with the advent of the Web 2.0 era in the 2000s, when the Internet became truly massive. The advent of Web 2.0 is usually associated with Tim O’Reilly’s 2005 “What is Web 2.0” article, but it’s not an exaggeration to say that Web 2.0 began with the dot-com bubble in March 2005. 2000. But first things first.
From Web 2.0 to Web 3.0
In the late 1990s – early 2000s, the Internet became widespread and various companies began to rush to adapt their business to the new realities. When talking about the hype around blockchain, cryptocurrencies, and DeFi in recent years, it is often compared to the dotcom bubble, when many companies wanted to make money doing business online. Internet stocks grew very rapidly, until the bubble finally burst on March 10, 2000, crashing the NASDAQ index one and a half times in one day. Many Internet companies turned out to be shells, but giants like Amazon, eBay, and Priceline also emerged from the dotcom boom.
In addition, this has not prevented large companies from continuing to mark economic paths on the Internet. Along with Web 2.0 came search engines, blogs, social networks, online stores and Big Data. In our era, it is difficult to imagine a company that is not represented on the Internet.
The Web 3.0 era hype around blockchain, cryptocurrencies, smart contracts, and DeFi is also often compared to the dot-com bubble, and indeed many cryptocurrencies and on-chain startups. blockbusters turn out to be scams or empty scams, but the crypto market and DeFi just keep going. growing up.
However, the main focus of Web 2.0 is centralization and platform dependency. Users leave a lot of personal information on search engines, social networks, blogs, cloud services. Many people rely on Youtube, Facebook, Instagram, TikTok, Upwork, Canva, Pixabay, not to mention a variety of payment systems for their income.
Your account or account can be blocked at any time, your content can be monetized for one or another political reason. It was only in the era of political correctness and sanctions that the mass user really began to understand why he needed decentralization.
Web 3.0 is heading towards decentralization to return control to users. The need to move away from BigTech monopolies and the traditional monetary system on the Internet is now stronger than ever.
There is another important trend in Web 3.0: the increasing role of AI and machine learning. Now AI can analyze BigData, recommend content, generate text, create images, and even mimic users on social media.
Let us now try to understand all these trends from an economic point of view.
Characteristics of the Web 3.0 economy
So far, the transition from Web 2.0 to Web 3.0 has not yet fully occurred. In addition, to predict the development of the digital economy of the future, the political context must also be taken into account.
Maintaining a decentralized blockchain-based infrastructure requires a lot of computing power and electricity, which are easier to concentrate only for the state or corporations, and not for individual crypto-anarchists. Big companies will buy blockchain startups and mining facilities. Under environmental pretexts, they will try to introduce consensus algorithms that are less vulnerable to centralization, for example, as is the case with Ethereum’s transition from Proof-of-Work to Proof-of-Stake. Large BigTech companies and traditional financial institutions are in no hurry to give up their power, so in the coming years we will see an intensifying conflict between advocates of centralization and decentralization on the network, as well as many hybrid solutions that seek to combine both approaches.
In the context of increased political friction between economic macro-regions, the need for services that are resistant to the blockade will grow. It will require commercial and media platforms that are resistant to censorship, which means that the mass user sooner or later will understand the value of decentralization.
The development of machine learning will also have a strong impact on the labor market. Compare Google Translate 10 years ago and what it is now. Machines will be able to automate various types of routine intellectual work: analysis, translation, text and image creation, protocol writing, trading, and even programming. This means that in the Web 3.0 economy, algorithms will do a lot of the work and people will have to create something truly original to compete with the machines.
Another important trend is the so-called “Internet of things”: things will be marked in one way or another, they will be equipped with technologies for transferring data between objects. There will also be strong opposition in this field among supporters of centralization or decentralization. It is convenient when you can track where the rented car is, but it is inconvenient when this car is remotely locked due to penalties.
Barter transactions will become more convenient and in demand amid the crisis of the fiat money system. In some places, a fundamentally new type of economic relations will emerge, which is not based on a monetary system at all, but on a social qualification system, where access to certain benefits is determined by the behavior of the individual. Litigation and disputes between business entities can be partially automated using smart contracts. In general, we will definitely not get bored in the next 5-10 years.
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