On Tech, Business, Society.

Category: Web3

European Regulators Are Potentially Getting Us Closer to Web3

European Union regulators have been scoring some important gains against the large tech companies, namely Meta, Apple, and Google.

These recent developments are significant as they hit at the core elements of these company’s business models, while benefiting users, and potentially removing some of the barriers that might have held web3 from advancing.

The Irish Data Protection Commission (DPC) and European Data Protection Board (EDPB) have piled on Facebook and Instagram prohibiting them to force user consent of data sharing for the purpose of ad-targeting. A win for data privacy and user choice. 

The European Union is now forcing Apple and Google to require alternatives to its App Stores, including payment systems. This will be done via a new interoperability obligation between messaging services, in addition to banning non consensual data collection for the purpose of targeted advertising. This development is for real, as Apple and Google are now preparing to allow the sideloading of Apps in the not too distant future.

Korean regulators have also been hawkish on anti-Google/Apple practices, and they have already enacted a law that restricts these players from charging app developers from Korea commision on in-app purchases within their stores. 

Finally, another indirectly related development pertains to the European Union requiring Apple to adopt a more universal charging cable standard at the expense of its proprietary “Lightning” cable by December 2024. Not squarely web3-ish, but a good stop to monopoly driven requirements. 

Let’s extrapolate and imagine. All these developments have implications into the future as they represent many of the required conditions for web3 to prosper. 

  • More decentralization of services

  • Dismantling of central, powerful monopolies

  • Less revenues for central players

  • More revenue opportunities to new players

  • More user data privacy and choice about its usage

  • More choice of payment services (think crypto eventually as one of these choices)

All these efforts took time to materialize. The App stores change situation got started in 2016. But these are big shifts. 

Let’s hope these developments are followed in the influential US market although US regulators have not been as precise nor prescriptive as their European counterpart, even if they have imposed occasional fines. Message to US regulators: it’s not the penalties that count. It’s the required changes that accompany them. 

Whither Blockchain 2.0?

2022 was a frustrating year for crypto and the blockchain. At least it was for anyone involved in it. 

At the height of the dot com crash of 2000, the ominous 9-11 event and subsequent Enron fiasco (a couple of months after) delivered the final blow on the tech sector and budding Web. It was the end of an era; the era of imperfect technology, crazy ideas, immature solutions, scams, over-valuations, unrealistic promises, poor market fits and questionable business models with too few users. Many seemingly reasonable Web ideas and promises went dormant for almost 2 years. It wasn’t until 2003/2004 that Web 2.0 rumblings started to make sense with a Web renaissance of sorts.

How we are ending 2022 reminds me a lot of how 2001 was ending. Perhaps the FTX, Terra and other spectacular failures combined to produce the equivalent of an 9-11/Enron effect and deliver a final blow to end that first blockchain era. 

Take that previous statement I made to describe the end of the Web 1.0 era, and we can squarely apply it to describe the blockchain space today. There is a frightening analogy about where we are exactly today in the blockchain sector: imperfect technology, crazy ideas, immature solutions, scams, over-valuations, unrealistic promises, poor market fits and questionable business models with too few users.” 

We need Blockchain 2.0 to emerge in order to re-spark, re-energize and re-inspire a blockchain sector that has been put on notice that it wasn’t nearly out of the woods in terms of steady growth and mainstream acceptance.

A new era typically takes firm hold after it is finally seen in the rear-view mirror. While still metamorphosing and shaping itself, it is difficult to pin it down because transitory states are not always a good representation of the final state. 

Of course we can hang on to vision and aspiration and connect the dots. But these are not very accurate, because things almost never happen as envisioned. 

While everyone is spitballing web3 prognostications and expecting it to lift the technology sector forward, web3 will not fully materialize without another leap in blockchain technology and more around that sector.

Web3 has its own issues. It is not well defined and it doesn’t really exist (yet) despite numerous dissertations that it’s on the way. 

What is Blockchain 2.0?

Blockchain 2.0 is not a better blockchain, and it’s not about better technology. The 2.0 moniker here depicts a new era where the ensemble of iterative technologies will be easier to adopt, spur more widespread usage, invoke all-around positive awareness, and yield use cases that the common user finds appealing enough to try out and be loyal to.

Blockchain 2.0 will put the users at the center, not just developers. Maybe Blockchain 1.0 placed too much emphasis and expectations on developers, and rightfully so. It was the way to start in order to build-out the infrastructure and tools around it. 

What does Blockchain 2.0 look like? 

I don’t know what it will look like. But I have an idea about the conditions that will need to exist in order to pave the way for it. For Blockchain 2.0 to start unraveling, we will need orders of magnitude improvements along 5 dimensions: 

Behavioral, Regulatory, Design, Adoption and Technology. 

  • Behavioral: The mainstream public needs to be more receptive about blockchain technology, and not see it with disdain as something that is not necessary nor needed.

  • Regulatory: Governments and regulatory bodies need to stop blowing strong headwinds in the face of blockchain tech and cryptocurrencies, most importantly in the United States. US regulators and legislators are standard bearers. The impact of their actions (or inactions) is felt around the world.  

  • Design: Putting users at the center with a user design experience mindset is not only necessary, it is essential. User experiences matter. Users don’t want a user manual to dive into the world of blockchain, web3 or crypto-enabled apps. 

  • Adoption: With good design, more users will be active participants, and not just spectators or speculators. We need to see killer use cases that everyone talks about (viral element), and ones that reach a critical mass of users. 

  • Technology: There is too much fragmentation currently across the range of blockchain infrastructure choices, so we will need to see a healthy consolidation at the top. Developers want less, not more choices. They need more robust options without having to jump through hoops to cross different technology stacks, because ultimately end-users don’t really care about the intricacies of the underlying technology.

All these dimensions are interrelated, and they will need to align for us to see a full effect. 

In terms of candidate technologies and solutions, almost anything that currently exists is up for grabs and re-invention. New leaders will emerge out of this period of doldrums, just as new tech giants emerged from the rubbles of Web 1.0 (e.g. Google, Facebook, Twitter). 

Let’s face it, there is a lot of immaturity and tinkering in blockchain technology, and the industry needs to do better than tinkering. The use cases for regular users just have to get better. Just to name one sector that holds a lot of promise, I’m holding my breath for more innovation in cryptocurrency wallets, or maybe a browser/wallet combination of sorts. Also, I’d like to see more apps (web or mobile) with embedded wallets as part of the experience. Of course, the App stores policies are a gatekeeper, but that is going to change over time.

Will it take one, two or three years for the blockchain sector to start shedding old 1.0 constraints and decisively enter a 2.0 phase? I hesitate to pin down a timing prediction. 

The blockchain and cryptocurrencies sectors have been beaten down in 2022. But they are not dead. 

There is no Web3…Until There is One.

Web 3.jpg

The blockchain industry is flush with claims of Web 3.0’s arrival. There is no shortage of protocols, technologies or applications claiming to be the conduits to, or harbingers of this “next” version of the Web. 

However, the notion that Web3 is a logical evolution that arrives after Web2 can be challenged.

One of the flaws emanating from the Web3 cheerleaders is to start with a technical architecture vantage point. What ensues is a series of technical claims or features that appeal to technical stakeholders, and fall short from reaching a required mainstream to effectively make a dent in declaring the arrival of a new paradigm. 

Even the term Web 2.0 is technical jargon to the actual end-users that ended-up validating that era. If you ask common users that consume social media today, they will not be familiar with the term “Web 2.0”. What they know is they can post a photo, share a video, publish their thoughts, debate topics, or broadcast themselves doing silly or smart things. 

Other technically-driven revolutions with high paradigm shift expectations have had a history of failure. Two recent ones come to mind. 

In the mid-2000’s, SOA (Service Oriented Architecture) was all the rage, and it was going to change everything. It was a “do or die” for IT departments in mid to large companies. IBM and other big software companies were at the forefront of this trend. A few years later, that flame fizzled, because SOA didn’t deliver its revolutionary promises and remained a niche.

In the early 2010’s, the Semantic Web was another attempt at owning a “Web 3.0” narrative, and it was supposed to move us beyond Web 2.0, because linking content via meta depictions was going to be so important, and it was the original goal of the Web that Tim Berners-Lee had envisioned. Many readers probably don’t remember the semantic web. No worries, that promise also fell flat and fizzled away a few years later.  

Fast forward to now, and we have blockchain technology fueling another Web 3.0 resurgence. (and I’m not counting those that believe that AI and machine learning are rather the harbingers to a Web 3.0)

One of its most ardent flag bearers is the Web3 Foundation, but it is a front-house to Polkadot’s blockchain, and disguised as the industry’s next lighthouse. 

The problem with all these technically-driven so-called paradigm shifters is that they are of technical nature, and their scope is limited to a technical segment of the market. Technology is always an enabler for something bigger, and it is a lever. Technology alone cannot reach a mainstream market. Rather, it’s usually something else that is enabled by technology that makes it into the mainstream.

Web 2.0 happened because mainstream users started to share content on the web and get gratified from instant publishing. This was not a technical trend, but it was a powerful use case that reached societal and business levels.

Today, we take it for granted that anyone can write and immediately read on the web what they just wrote. But that wasn’t the case at the beginning of the Web. 

Do you know what this read/write feature was called when it first started? 

Well, it started being called the two-way web

I remember being at an O’Reilly P2P Conference in 2001 in San Francisco, where my friend Rohit Khare (from CommerceNet Labs) demoed this cool feature showing a screen where you type something and it was immediately re-published on the web. Wow. 

Imagine if we had continued to market this new new feature as “the two-way web”. Two-way web was just a technical depiction for an enabling fundamental technology that later became known as read/write web. Much later, Facebook, Twitter, Instagram and others didn’t even call it read/write. They called it “share”. 

Four years later after this seminal demo, in 2004, Web 2.0 was officially kicked-off via the first Web 2.0 conference, as the market started focusing more on the application of the technology instead of the technology itself.

I’m offering this historical backdrop as a useful perspective for those who are rushing in declaring ownership of, or leadership in Web 3.0. The reality is that no one will really own Web 3.0, just as no single organization owned Web 2.0. 

A new era is more visible by its applications, not its enabling technologies that later become largely invisible. If you are a technologist, all you see is technology. 

With all that being said, do I believe that the blockchain-driven Web 3.0 trend includes innovative technologies that have the potential to usher us into a really new Web era? 

Absolutely yes. 

However, until the patchwork of Web 3.0 technologies finds itself inside mainstream applications that have a broad and large market reach potential, we will not have a Web 3.0 yet.

This post was a part I and a precursor to another post that I will publish in a few days that will list the potential applications that have a promise of being the next mainstream drivers for blockchain-technology. It will be more than one, but less than 5. 

The real promise of Web 3.0 is still up for grabs, and there are options worth waiting for. 

There is no Web 3.0 future until there is a present one. 

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