This is the first in a series of blogs dedicated to Web3. First and foremost, I want to clarify some foundational concepts of Web3 — how it is defined, what it represents, and how it can be visualised. But I also want to share my own perspective from inside the industry and to explain what we are doing at nChain to create the building blocks of Web3.
In this first blog, I’ll start with the dilemma we face when talking about Web3 and why I think the term is valuable. I will then take a step back and look at the evolution of the Web and introduce some mainstream concepts to get us on the same page. I’ll end by presenting my three core values of Web3 and what they mean to me.
Revolutionary concept or buzzword?
I recently noticed a dilemma emerge within the blockchain community, although I believe it is a common issue faced by all communities who are trying to build the open networks of the future. Do we embrace Web3 as a revolutionary concept or write it off as a buzzword? Given the increasing popularity of the term, it is a question we must all encounter sooner or later. In my case, a prominent figure whose opinion I value highly commented on twitter:
Web 3.0 is where internet, blockchain and AI converge and nChain sits right in the centre of this.
But at the same time, a second, equally prominent member of the community tweeted an opposite viewpoint.
I will go on record as saying Web3 will die quickly as a buzzword and is meaningless.
It was likely that the three of us would meet soon. I knew the topic of Web3 would come up and that we needed to develop a consistent strategy. I had a vision of these two people staring at me for comment. I would have to disappoint one of them and would need to justify my answer. I had to think this through and clarify my own position.
So what do I think?
First, I am sympathetic to the point of view of those who would write off Web3 as a buzzword. I have often seen cryptocurrency companies use the term Web3 to make their products appear more relevant. This particularly applies to wallet providers who label themselves as Web3 simply because they offer a variety of crypto-assets to trade. But if you try to appear relevant to everything, you end up being relevant to nothing. As a result, in this context Web3 has become a buzzword with no real meaning behind it.
But to me, the scope of Web3 has nothing to do with cryptocurrency trading. It captures a vision for a human-centric future internet that facilitates private peer-to-peer interactions of all kinds. But it goes deeper than that. It captures the spirit of what we have been building at nChain since its founding in 2015. So I am not only a user of Web3 — my work is deeply embedded in the field.
For the past five years I have led a team of PhD research scientists at nChain tasked with pushing the boundaries of blockchain technology. In doing so, I have seen an evolution in thinking from an ‘everything on blockchain’ mindset to a ‘blockchain when strictly necessary’ mindset. We pay close attention to privacy requirements applied to a public ledger. This means that instead of publishing raw data on-chain we prefer to use data commitments (e.g. salted-hashes) that provide data integrity over time but remain cost-effective and private to the outside observer. We have also seen a trend away from using blockchain as a communication medium. Instead, we embrace the security and privacy provided by modern communications protocols such as IPv6.
In essence, while our specialism is blockchain, what we are really doing is building a future network with a security model underpinned by blockchain. We have made attempts to describe this in the past using terms such as the ‘Metanet’ and the ‘Internet of Value’. But the term Web3 has started to gain widespread adoption, and, for me, it is a much better fit for the far-reaching vision we are trying to build at nChain. I am happy to put my name behind it.
While I have my own Web3 journey, I would like to go over some mainstream concepts to align ourselves with a common definition.
The Internet is different from the Web. The Internet is a global system of devices that can communicate with one another. They do so primarily using a communication protocol called TCP/IP, developed in the late 1970s. The technical standards body that maintains this suite is called the Internet Engineering Task Force (IETF).
There are important networks that are distinct from the Internet. For example, a blockchain network. While blockchain users typically connect to one another using the Internet, there is no requirement for this to be the case. A user may be ‘offline’ from the Internet but nevertheless send a direct blockchain payment to another user. Just imagine a customer with a smart card paying a merchant with a terminal.
The Web is a different concept altogether. It is a global repository of information pioneered in the early 1990s by Tim Berners-Lee. Users access the Web via the Internet, although the Internet also deals with other kinds of traffic such as e-mail, streaming, commerce, etc.
Web generations with Internet Protocol versions. Image courtesy of Prof. Latif Ladid, University of Luxembourg.
The Web has been codified into different generations. The first generation was largely read-only. Websites were self-hosted and separate login credentials were needed for each site. The second generation was more interactive. It had a better user experience but was managed by large gatekeepers such as Google, Amazon, etc.
Web 3.0 (distinct from Web3) refers to a semantic Web driven by AI, whilst the Web of Things (WoT) was envisaged to deal with its counterpart the Internet of Things.
Web3 is all about the blockchain. Its meaning is succinctly captured in an interview with Gavin Woods, who popularised the concept in 2014:
‘A decentralized online ecosystem based on blockchain.’
At present, unlike the Internet, there is no universal standards body responsible for the development of Web3.
If you are a visual learner, you can imagine a conceptual framework for Web3 composed of three or more layers of concentric circles sitting on top of one another. These layers are:
- Blockchain (central layer)
- Service providers (middle layers)
- End users (outer layer)
It can be useful to visualise a Mandala-like image similar to the one below. The blockchain network corresponds to the nodes in the centre, service providers are in the two middle layers, and end users are the nodes on the outer layer. With such network topologies, information can be very rapidly propagated to all nodes by passing through the central core.
Graphical representation of a Web3 conceptual framework. The image is taken from Mandala Networks: ultra-small-world and highly sparse graphsby C. Sampaio Filho et al.
It is worth noting that this is not a tech stack nor a protocol layering. It is a layering of environmental affordances. The service layer offers users goods or services that they value. The blockchain offers users control and transparency of their data, and affords the service layer data integrity, authenticity, and a native payment rail.
Nowadays, when people talk about Web3 they don’t necessarily mention the blockchain at all. Instead, they are signalling that they believe in a future network where users have ultimate control over their data, their identity, and their consent. Web3 is a final state that subsumes all predecessors, and from which there are no further gains to be made. Whilst for many it may go unsaid that a blockchain is necessary for this, it is the duty of blockchain experts such as myself to explain exactly how and why a blockchain is crucial for achieving Web3.
As an industrial research scientist, it is my passion to turn abstract concepts into concrete technology building blocks. To guide this process, it is necessary to first establish a set of values that allow us to make independent decisions consistently. For me, there are three core values of Web3 that are above all others.
- Data Ownership
- Direct exchange of value
Security refers to secure and private communication, and to the data integrity and double-spend protection afforded by a public blockchain.
We can envision an Identity Wallet to manage data ownership. Here, identity-linked cryptographic keys will be used to establish the ownership of data by a user, and to grant access rights to services wishing to consume that data. The data itself does not need to live on a user’s device. For example, a patient may grant a doctor access to view their health records stored on the hospital server.
Direct exchange of value refers to the private exchange of goods and services between Web3 users. This will be facilitated by nano-payments using a scalable low-fee blockchain. This payment should not need to be routed through any third-party platform (not even a blockchain), allowing for a truly private and local experience. The goods and services need not be digital — it could be a restaurant meal or a carshare, for example.
The goal of this first blog was to get us talking the same language on Web3, and to present the core values above.
Over the coming months, we at the nChain R&D team plan to release more blogs on our ideas and technology related to Web3. We will orient the discussion around the core values given above and explain how they are embodied in everything we do. Wherever possible we will stay within existing standards to make the discussion as relevant as possible.
I hope you enjoy it.