In what Twitter Founder Jack Dorsey asserts to be his “most important contribution to the Internet“, a new documentation has been released, which he calls Web5, outlining his team’s new vision for the World Wide Web.
But the thing is…
The blockchain space is still working on web3, and web5 seeks to invalidate the former, creating tensions between a once-trillion dollar industry and Dorsey, who is still a major shareholder of the platform most crypto users hang out: Twitter.
Web5 is touted by Dorsey and his company, TBD, to be the right solution for decentralizing the web instead of the venture-fueled web3.
This article aims to explain everything there is to know about web5 and its implications in a more understandable format. If you’re a heavy tech person, you may also see the developer docs.
What is Web5?
Web5 is a new decentralized vision for the Internet powered by Bitcoin, where identity and personal data control are given back to individuals, allowing for unstoppable applications and protocols.
As an open source project, web5 would allow developers to write decentralized web apps using decentralized identifiers (DIDs) and decentralized web nodes (DWNs), returning ownership and control over identity and data to individuals.
While web2 democratized information, it failed to establish proper standards for identity, which paved the way for Big Tech companies like Facebook and Twitter to create platforms that would later own our identity and personal data.
Web3 was supposed to change that. Unfortunately, Dorsey sees it as nothing more than venture capital oligopoly that could never accomplish what it promised based on its current setup. Web5 is touted as the new solution that would bring decentralized identity and data storage to applications, enabling developers to focus on creating useful and seamless user experiences.
The Problems of Web2 and Web3
Before we go deep into web5, it is important to identify what went wrong with web2 and why web3 won’t be able to fix it. This isn’t a justification as to why web5 should exist, but only highlights the arguments made by proponents of the concept to better understand its essence.
Web2, despite all the innovations it has brought, including high-speed cyber transactions and connectivity, has one major drawback: centralization of control by Big Tech companies.
In other words, the billions of users under their platforms have little to no say in the policies and decisions implemented. This puts them at the mercy of these large tech companies like Facebook, Twitter, and Google, as they are powerless to change the rules that put them at a disadvantage.
Web2 platforms decide on fee structures, demonetization decisions, algorithm, community rules, and what content is allowed to be produced. On top of that, they have complete control over their users’ data, which is considered a vital commodity in today’s digital world. These data are then purchased by third parties so they can run ads on us.
These massive tech platforms have formed not only an oligopoly over Internet platforms due to the sheer size of their user base, but they have essentially become the gatekeepers of the web. With no alternative services to turn to, users have no choice but to abide by their rules instead of giving up the broad reach and convenience they offer.
Not every tech figure sees web3 as the future. Some see it as nothing but a ‘rebranded‘ web2 ecosystem touted by venture capitalists. Even Elon Musk thinks that web3 is more buzzword than reality today.
One of the frowned upon elements on most blockchain ecosystems is the proliferation of fund managers and other large investors. With for-profit intentions now within most web3 projects, Twitter’s Jack Dorsey argues that users don’t own web3, but that the venture capitalists and the people they serve do.
Another concern is the concentration of power, not only on the platform but also on early adopters of web3 projects. With more benefits funneled into them, later or new supporters are left with fewer opportunities, tipping the favor on participants who came before them. The possible silver lining is that the looming recession might make most web3 assets cheaper.
Lastly, the web3 ecosystem appears to be centralizing around the server/node side, as argued by Signal Co-Founder Moxie Marlinspike. This is because regular users typically don’t want to run their own nodes. This puts us in a problematic situation where only a few infrastructure providers control the gates to the blockchain.
On Ethereum, for instance, around 70% of all the applications connect to nodes controlled by Alchemist or Consensys. That’s two companies the whole ecosystem is trusting!
With all these issues, we can’t blame Jack Dorsey for trying to create a ‘better’ alternative.
Advantages of Web5
Now it’s time to talk about the advantages of web5; what makes it better than web2 and web3, allegedly.
With Web5, most of the applications and platforms will be permissionless, meaning anyone can have access to them no matter who they are, where they’re from, or whatever they’re affiliated to. This is because, by design, centralized entities or governments have no control over the decentralized web.
Today, users are at the mercy of both governments and large tech companies. Google could deindex a website for ‘bad behavior’ and Facebook could permanently ban any user for whatever reason. Governments can easily issue a court order to compel any tech platforms to censor a particular individual, group, or company.
Web5 hopes to remove that power, not just from governments, but from every entity that seeks to determine what’s ‘right and wrong’ for the majority.
Users will be able to securely store and manage their own identity credentials in their decentralized web node, allowing them to access various applications and protocols without creating an individual account for each.
Today, we create accounts using our emails, mobile numbers, or social media profiles, allowing us to log into various apps across the web. Unfortunately, this puts us at the mercy of service providers like Gmail, social media companies, mobile network operators, etc., which allow them to ‘control’ the keys to our accounts. Furthermore, rampant hacks, theft, and privacy violations in recent years have proven the unreliability of these entities and their centralized systems.
And even if we continue to live with their drawbacks, there is no guarantee of their long-term sustainability. Companies and government agencies go under all the time due to mismanagement, among other reasons. What happens to our accounts then?
The solution purported by web5 is to empower individuals and groups to manage their own identities through an open system that is universally verifiable and discoverable.
Web5 intends to empower users to take back control over their data, which has been hijacked by companies that seek to monetize them.
Today, most Internet users voluntarily or unknowingly give their private information to these companies in exchange for something ‘free’, including the creation of social media accounts, access to certain products and services, and many more. Since there is no such thing as free lunch, chances are that their data will be monetized in some way, typically by selling them to advertisers.
It shouldn’t be surprising that ads are everywhere on all devices, unless you use Adblock. Even then, you can never truly avoid them.
Another drawback with today’s web setup is that user data are trapped in app silos and not easily transferrable. For instance, if I use Spotify and want to transfer my artists, curated playlists, and other settings to a similar app, such as SoundCloud or Tidal, it’s not possible. This makes changing apps so much more difficult, and companies are obviously incentivized not to allow such features, which are to come in web5.
With Web 5.0, you can avoid unsolicited ads, switch between apps and retain settings, and more importantly, manage your level of privacy according to your preference. The idea is that instead of governments and companies, individuals should control what they want to share to the public, including photos, personal information, bank accounts, location, and just about every detail of their lives.
No New Tokens
While most dApss today have their own utility tokens, web5 will utilize only BTC as the medium of exchange. No chances of rugpulls or pump and dumps; what a breath of fresh air.
This is in line with Jack Dorsey’s vision of Bitcoin becoming the ‘world currency‘ in less than a decade.
Pillars of Web5
With blockchain technology out of the picture (other than BTC), TBD has introduced a set of specifications for different infrastructure for this new type of Internet that requires no smart contracts, NFTs, and even blockchain protocols.
Decentralized Identifiers (DID)
Decentralized identifiers (DIDs) are globally unique identifiers that allow for decentralized and verifiable digital identity, serving as one of the foundations of the decentralized web.
But what exactly are identifiers in the first place?
Identifiers come in all shapes and colors, but they generally refer to unique identification mechanisms that serve as:
- Communication Addresses (email addresses, phone numbers, social media handles),
- ID Numbers (for passports, driver’s licenses, health insurance), and
- Product Identifiers (barcodes, serial numbers, RFIDs).
Even the web has the so-called Uniform Resource Identifier (URI) that is used to track websites via URL—Uniform Resource Identifier.
The problem is that the vast majority of the identifiers above are controlled by external authorities who decide what’s what and when they can be revoked. They are useful in certain situations and recognized only by certain entities we have no control over. Moreover, they might collapse or cease to be valid one day due to organizational failure, or worse; they could leak private information, whether intentionally or not.
This is why we need a decentralized version of these identifiers, DIDs, in order to create a new Internet where identity records are more reliable, integrated, and have less censorship.
Unlike federated identifiers, DIDs are not at the mercy of centralized registries, identity providers, or certificate authorities that typically control the personal identities we have today. Individuals can choose their own identifiers among systems they trust instead of relying solely on state-sponsored agencies for their personal authentication.
Verifiable Credentials (VCs)
Verifiable Credentials (VCs) serve as specification formats and models that provide a universal way to showcase credentials across the Internet in a secure, privacy-preserving, and machine-verifiable manner.
Credentials are an integral part of our lives, from driver’s licenses that affirm our ability to operate a vehicle to certificates that indicate completion of a course or training. And this extends to the business world, where we utilize receipts to prove payments, and consumer reviews to determine product quality, among other assertions made between individuals and non-government parties.
The problem is that traditional credentials typically exist in their own siloed ecosystems, having no unified standard for conveying assertions across different domains, federation boundaries, and the Internet.
VCs provide the specification for a new digital credential standard that is universally verifiable and secured by state-of-the-art cryptography.
Decentralized Web Node (DWN)
A decentralized web node (DWN) is a standard for data storage and message relay that allows entities (individuals, corporations, etc.) to send and store encrypted or public messages and data, allowing for a wide variety of decentralized protocols and applications to be built on top.
The vision is to provide more choices for Internet users, allowing them to decide which component of their data should be encrypted, which ones they want to share publicly, and to whom.
DWNs utilize a mesh-like datastore construction that allows entities to operate multiple nodes and sync to a network, enabling the owning entity to manage, secure, and transact their data with others without relying on location or provider-specific infrastructure, interfaces, or routing mechanisms.
The combination of Decentralized Identifiers and Decentralized Web Nodes produces a Web of DID-secured messaging, data sharing, and credential exchange that can replace one-off protocols (encrypted messaging, photo sharing, etc.) with universal standards for all types of semantic data exchange.TBD Whitepaper
What is tbDEX?
tbDEX is a proposed Bitcoin decentralized exchange (DEX) that aims to expand people’s accessibility to Bitcoin through a platform that that facilitates the trading of BTC and fiat money, spearheaded by Twitter founder and former CEO Jack Dorsey.
The project was announced by Block, a digital payments company (formerly Square) also owned by Dorsey.
The DEX can enable everyday users to exchange their depreciating assets with something that appreciates in value over time. Instead of implementing a governance token like most web3 apps, tbDEX will empower users to establish a social trust with one another. They also have the option to rely on reputable third parties to verify themselves and other users, ensuring legitimacy.
When it comes to transaction fees, the proposed project has an interesting concept. According to tbDEX, its fees would be lower for users who would voluntarily disclose more personal information. In other words, anonymity would cost more compared to partial or full information disclosure.
Is Web5 the Future of the Internet?
We really don’t know if web5 is the future or how far it will go since it is such a new concept. Bitcoin is 13 years old and yet many still question whether it could viably become the currency of the Internet.
Nonetheless, it has put forward a set of standards that could make the Internet better for most individuals. The next challenge would be to garner support from other entities beyond Dorsey. If it were to truly become the new infrastructure for the Internet, then it needs to have wide acceptance.
Note that not all internet standards eventually reach mainstream adoption levels, as proven by the early web1 days where TCP/IP won. As it stands today, web5 is severely dwarfed by web3. But that doesn’t mean it can’t win. Web2 also dwarfs web3 yet many people in the blockchain industry think the latter will eventually win.
Still, the existence of both web3 and web5 can be seen as a good thing. Both proclaim to make the Internet better but in different ways. Support the projects that you think will succeed.
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