Enthusiasts claim that everything on the internet will eventually be powered by blockchain. The idea of Web3 is to give more power to the users and creators instead of the big companies in the domain. Be it communication or money transaction, Web3 advocates claim that decentralisation would play a major role rather than corporate servers governing the web.

Web3 gives people alternatives – from traditional banks to online streaming platforms. Decentralised social media platforms could become censorship-resistant, contrary to big players like Meta or Twitter deciding what is acceptable and what is not. 

Web3 imagines the internet with no single entity who owns or controls the network of computers. Gavin Woods, Ethereum co-founder and CTO, initially promoted the idea in 2014 in a blog post that said the web should become a ‘zero-trust interaction system’ (where) all interactions will be pseudonymous and secure. He imagined Web 3 as the ‘Secure Social Operating System’, as blockchain would almost eliminate the trust one placed in any single entity.

Decentralisation is Web3 weak link

Cryptographer and the founder of Signal app Matthew Rosenfield, famously known as Moxie Marlinspike, explained in a blog post how very few private companies govern Web3 services that interact with blockchain services.

He observed how blockchain-based services are majorly dependent on APIs. In the Web3 scenario, most dApps use APIs to connect to blockchains like Ethereum, the most popular blockchain for software developers. Alchemy and Infura are the providers of the majority of dApps on Ethereum. In simple terms, one has to trust either of these companies. Hence, the idea of decentralisation seems imaginary here. 

Another instance would be crypto transactions. Bitcoin and Ether are dominated by Binance, the largest exchange in the world in terms of the daily trading volume of cryptocurrencies.

NFT is something that cannot be missed while talking about Web3. MetaMask enters the picture here, again owned by Infura’s parent company Consensys. Another name at the centre of the NFT market is OpenSea, which single-handedly recorded a trading volume of nearly $4.97 billion in January 2021. 

Moreover, many of the ‘decentralised’ products that Web3 natives use are still owned by VCs. 

Great user experience creates consumer behaviour that is difficult to change. Clearly, data states that a few dominant companies have a hold on the market with the user-friendly experience that they bring to the table, contrary to the ‘promised’ decentralised outline of Web3. The general public only cares about products doing what they want, as easily as possible, and for as cheap as possible.

Wrapping up

A blockchain is only as valuable as the applications built on it, the developers that build them, and the consumers who use the applications. A $3 trillion company like Apple has the apps, the developers, and the consumers. So one can not stop them from entering the market and controlling the major chunk of it with over a billion loyal users.

The transition from Web2 to Web3 is certain. But with Vitalik Buterin, a co-founder of Ethereum, confessing that “a lot of it comes down to limited technical resources and funding. It’s easier to build things the lazy centralised way, and it takes serious effort to ‘do it right’. And a handful of companies dominating the field decentralisation seems like a Utopian plan”.