The internet has always been decentralized to a certain extent. In the early days of the Web, the only way to create a website was to code the pages from scratch in a language like HTML, and there were no huge social networks or blogging clients to host our content.
That all started to change with the advent of companies like Amazon, Google, and Facebook and the way that they built their businesses on the back of the data that we handed over to them. Back when the internet was still in its early days, most of us didn’t think twice about accepting user agreements and granting these websites the level of access that they requested of us.
But times have changed and the World Wide Web has continued to mature. We’ve gone from Web 1.0, when the internet was largely static and all we could do was consume it, to Web 2.0, where we’re able to interact with it on a greater scale and create content of our own through forums, social networking sites, review sites, and more.
The decentralized Web
Now, many analysts are predicting the next phase in the Web’s evolution ” a shift toward Web 3.0, the decentralized Web. The idea behind the decentralized Web is to take the power away from the huge behemoths and put it back in the hands of the users. Imagine if instead of Facebook making money from selling your data to advertisers, you could make money yourself from the content that you create.
This concept might sound revolutionary, but it’s not too far away from where we are today. Just look at the possibilities opened up by blockchain, the technology that underpins Bitcoin and other cryptocurrencies. Entrepreneurs who are starting up new websites are already using tokens on the blockchain as an alternative to real-world shares. In many cases, they’re assigning those tokens to users based on how much time they’re spending on the site.
These tokens are created on top of existing blockchains, like Bitcoin and Ethereum, effectively allowing people to monetize their creations. Let’s say that an entrepreneur creates a new social network. They could assign tokens to users based on when they sign up and how much time they spend on the site, and those same tokens could be used to unlock extra features or to upgrade accounts.
As the social network grows in popularity, demand for the tokens will increase. The value of the tokens will also increase due to there being a finite supply. What’s unique here is that it’s a way of rewarding both the founders of these sites and the people who use them. Although you’ll still be handing over your time and data, instead of a company like Facebook monetizing your account and keeping the revenue, you’ll get something back from it in return.
Decentralized disruption
This new approach to the storage and usage of data could have huge consequences when it comes to the sites that we use and the way that they’re run. It’ll open up the floodgates and completely change industries in the same way that peer-to-peer sharing via applications like Napster or protocols like BitTorrent changed the entertainment industries and led to the rise of streaming sites like Netflix.
And from the point of view of investors, this type of decentralized structure is attractive because they can invest in technologies instead of the companies that use them. Imagine if you could invest in HTTPS, FTP, or some other fundamental building block of the internet. Congratulations, you’ve just imagined one of the key concepts behind a decentralized internet.
Of course, we’re still in the early days of the decentralized internet. But everything we’ve talked about here is already possible and likely to become more mainstream as time goes on. It might sound complicated, but it’s a level of complexity that more and more people are comfortable with. And it’s especially appealing to today’s youth and tomorrow’s consumers, who were born in a post-internet era where concepts like these are considered normal.
Why decentralization is inevitable
So far, we’ve mainly focused on how decentralization gives users greater control over their data, effectively allowing them to monetize their activity on the sites and the applications they use through blockchain tokens. Users will also be able to easily share their data with the people they want to share it with and easily revoke data when they no longer want to share it. This data will also be interoperable. Gone will be the days of feeling trapped by a social networking site that houses all of your historic data. Instead, you’ll be able to move away to another provider and take your data with you.
A decentralized internet would also be good news for app developers because it would reduce much of the stranglehold that Facebook, Google, Amazon, and Apple have over the Web and the sites that we use on a daily basis. More innovation means more choice, and more choice is better for everyone.
And yet another benefit of a decentralized system is the diminished risk of websites being hacked. When data is held by a central organization, that organization becomes a target for hackers, scammers, and even governmental agencies looking to spy on people. Just look at the high profile hacks of sites like Yahoo, when three billion accounts were compromised. A decentralized system would make all of that much more difficult, if not impossible.
The only real negatives of decentralization apply to the companies who currently rule the roost and who stand to lose a lot of money if decentralization goes ahead. But ultimately, decentralization must happen if the internet is to continue to grow. The short-term uncertainty and inconveniences along the way will mean nothing when compared to the weight of history. There can be only one winning side, and that side can only be the increasing lobby for a decentralized internet.
