Arcade City is a decentralized taxi service, built in Austin by a former Uber driver who is also a software engineer. Fed up with what he thought was the unfair treatment of his drivers, he created this to confront his former employer. Built on a blockchain and powered by digital cryptocurrencies, it was designed to be owned by a drivers’ cooperative. An Israeli startup, La Zooz’, is attempting to do the same by using blockchain technology to create a self-managed ride-sharing platform, connecting drivers with empty seats and potential passengers in real time; Again, this service is not owned by the founders of the app, but by its user community. It rewards drivers with tokens called Zooz, which they can use to get someone else in the community a ride.

Axie Infinity is a popular video game in Asia, especially in the Philippines. If you achieve some goals in the game, you will be rewarded with NFTs and crypto coins, which can be exchanged for real money. Players ‘build’ the game as they go, ‘breeding’ characters called Axies, who can battle other players’ Axies. Players can also buy virtual territory in the form of NFTs and earn tradable tokens called SLPs. Also known as ‘Pokemon on the Blockchain’, there are Filipinos who make a living playing this game. These decentralized “play to win” games have sparked a revolution in the gaming world.

These are real world examples of what people loosely call Web3. While some of them have yet to take off, the common theme is clear: they are decentralized, owned by the user community, use blockchain technology, and are powered by cryptocurrencies. Web3 has become an elastic term used for anything. Pure crypto gaming used it to appear more respectable, minting boring mammal NFTs is considered a Web3 idea, just like buying virtual land or holding fashion shows in the metaverse.

Yes, Web3 is all that, but also much more. Web 1.0 was about reading pages of static content on MSN, Yahoo or AOL, and it started in the 1990s. Web 2.0 broke out in 2005 with Facebook, Twitter, YouTube and the like, and it’s all about people creating and publishing their own content, going beyond mere passive reading. Web3 (for some reason the ‘3.0’ suffix is ​​considered old-fashioned) goes beyond your active participation by letting you own and build parts of it through ownership tokens and blockchain enablers, thus distributing ownership, unlike of the highly centralized models of Web 2.0. So if Web 1.0 was about ‘reading’, Web 2.0 is ‘reading and writing’ and Web3 will allow you to ‘read, write and own’. As crypto investor Li Jin and writer Katie Parrott put it: “If the pre-internet/web1 era favored publishers, and the web2 era favored platforms, the next generation of innovations, known collectively as web3, are all about tilting. the balance of power. and ownership back to creators and users.” Web3 has quickly moved up the hype curve, with venture capital inflow estimated at $27 billion in 2021, Facebook rebranded as Meta, and Jack Dorsey declared his intention to change your company name from Square to Block.

Beyond the hype, in my opinion, Web3 is a new business model. Just as Web1 was driven by advertising and Web2 is driven by data monetization, Web3 will be driven by value sharing and peer ownership. Web3 is open, built on open source software by an open community of developers. It is trustless, as transactions and interactions can occur without the need for a central authority. It does not require permission, as you do not need the consent of a controlling entity such as Facebook or Google to participate. It is ubiquitous, with the Internet available everywhere to everyone, including machines. And finally, it is proxy-free, as users participate as equals in the governance and ownership of a project via crypto tokens as proof of stake. In a sense, it’s like going back to early human settlements, with all peer-to-peer transactions with easy mutual trust and locally minted currency. Blockchains provide the decentralized foundation of trust for this new old world, and Web3 is the business model that drives it.

Jaspreet Bindra is the founder of Tech Whisperer Ltd, a technology advisory and digital transformation practice.