Web2 Treats Users As A Product And That’s Not Right, Can Web3 Change it

The internet as we know it today is often referred to as Web2, and is characterized by the dominance of giant corporations such as Google, Amazon, Meta Platforms and Microsoft. While Web2 introduced game changing concepts such as social media and user-generated content and has had a profound impact on people’s lives, it comes with a catch – the internet is largely centralized, with the biggest power brokers building up massive databases that are filled with user’s personal information and browsing habits.

With the shift to Web3, startups such Lympo, LockTrip and AdEx as are aiming to create a new kind of internet where power is more evenly distributed between the companies providing services and their users, who gain more agency over their digital lives. Web3 is built on a foundation of decentralized networks, which can provide greater transparency, security and more control, effectively giving people ownership of their data.

The Web2 Data Economy

Perhaps the best description of how Web2 works comes from AOL, the once-powerful service provider that has since become a key player in the ad-exchange business. The company’s website is hip and modern, and proudly proclaims that it can help people to “monetize your most valuable asset”.

“A publisher’s audience is their currency,” AOL explains, adding that “no matter how they make money from content – be it through advertising, paid subscriptions or syndication, a publisher’s core asset is audience and data.”

Although this is most definitely marketing-speak, it’s also an honest assessment of what makes Web2 tick – the internet pumps out useful content, and in return it gathers massive amounts of information about the people who consume that content. Then, under the table, the biggest companies use that data to make enormous amounts of money, without sharing it with those who created that data in the first place.

It is well publicized that many people are uncomfortable with the idea of big corporations building up “profiles” that contain their most personal information, including things such as their age, sex, preferences, location and browsing habits. What’s worse is that the avenues for collecting this data are everywhere, making it almost impossible for users to avoid being tracked. From advertising identifiers in the headers of mobile web pages, to fingerprinting browsers, customer tracking in physical stores using Wi-Fi data, and SDKs and APIs inside mobile apps, the list of ways in which internet users are being monitored appears almost endless.

Of course, internet users do get some benefits. They get to access the internet for free, using services such as Gmail and Google Search, social media platforms like Facebook, news and information sites for free. But in return, they’re constantly being tracked.

Decentralization Offers An Alternative 

But as the internet evolves into Web3, individuals are being empowered as they become the owners of their data, rather than a product that’s exploited by the big internet giants.

Web3 is based on concepts such as decentralization, blockchain and tokenization, and provides an alternative model by which companies can match users with their products and services, without building up extensive databases and profiles. Advocates of Web3 hope it will eventually grow big enough to provide a genuine alternative to traditional platform companies, and with that create an internet that relies on trust as its main currency, rather than user data.

Web2’s growth was led by the companies that pulled all of that user data into one place. But if we can distribute that information so that no single entity controls it, those who create that information will become its owners, and can ensure it’s kept secure. They’ll be able to choose who they want to share their data with, and monetize it in a way that was never possible before.

Numerous blockchain-based startups have emerged to try and leverage this new business model. For instance, Lympo is an NFT-based sports ecosystem that allows people to exchange their fitness and wealth data for tokens that can be sold for crypto. Their data is stored on a blockchain, and only they can say who is able to access it.

LockTrip is building an alternative business model for the online hotel booking industry, helping consumers and businesses alike to break free of platforms such as Expedia and Booking.com, which currently dominate that market. It has created a decentralized application that works by matching users with hotels based on their locations and preferences, and stores that information on the blockchain. It encourages users to share that data in return for crypto tokens, which can then be used to obtain discounts on their hotels bookings. 

Meanwhile, AdEx is attempting to take on the world’s most famous internet company Google in the advertising space. The startup has created a programmatic ad platform that uses cryptographic zero-knowledge proofs as the basis of its ad matching algorithm. Data on user’s browsing habits is stored directly on their devices, meaning they remain in total control of it. When they choose to share it, that data will be obscured by ZK-proofs so it remains anonymous, and users will receive crypto rewards for letting advertisers use that information to target them. The entire ad targeting and matching process is computed on the user’s device, meaning no one gets to build up a database about them. 

Besides the rewards, one of the key advantages of AdEx’s model is that users can choose which kinds of ads they’d like to see. In addition, AdEx incorporates DeFi functionality, allowing users to “stake” the $ADX token rewards they obtain by agreeing to see ads, and earn additional passive income.

Web2 Is Slowly Losing Its Grip

As we can see from the above examples, Web3 promises to fundamentally transform the way in which the internet works. While some might argue that we have good reason to thank big tech companies for building our digitally connected lives, those same entities have created a data monopoly that rightly concerns many of us, due to the potential for abuse. People value their privacy, despite the advantages of data sharing.

Web3 aims to fix that data monopoly by giving users a way to control and share their data, so they can benefit from the same connected experiences but without giving up their privacy. Although some say Web3 is still just an idea, and may not even come to pass, there are a lot of innovative minds working to ensure the internet evolves in that direction.