Web3: Internet in the era of blockchain, a utopia?

Web3 is the new buzzword. The new “buzzword”, as explained in good French by players in the crypto ecosystem. But what is it? And what is it for? Web3 would be the third generation of the Web, which makes it possible to consult sites on the Internet via a browser, after Web 1 and Web 2. Web1, from 1990, is characterized by a strong decentralization, but tends to be reduced to reading information on the screen, with little interaction between internet users. The Web2, since 2005, is illustrated by the rise of social networks, with the dominance of Gafa (Google, Apple, Meta, Amazon) and a strong centralization of data.

Web3 should inject new decentralization into it, based on blockchain technology, which makes it possible to exchange financial assets in the form of digital tokens as well as data without the intervention of a third party, such as Facebook or a banking institution. “Web 3 needs to give data back to users,” rejoices Tangi Le Calvez. The CEO of the startup Goin, which facilitates investments in crypto assets, spoke at a roundtable dedicated to Web3, during the CryptoDay fair, hosted on June 1 by Finance Innovation at Station F.

“Users will have wallets (digital, editor’s note) that will hold value (cryptocurrencies, tokens, NFTs, etc.) and anyone will be able to exchange this value directly with other parties,” he explains. Web3 should thus open up the data market and allow users to reclaim their own data, with the opportunity to monetize their productions directly on the blockchain. So we speak of “tokenization”, the process of converting data into a “token”, or a digital token.

Retrieve the value recorded by the Gafa

In Web2, most of the value is created by the tech giants. According to a May report from the venture capital fund a16z crypto, Web3 pays an average of $174,000 to each non-fungible token (NFT) maker, while Spotify pays just $636 per artist, YouTube pays $2.47 per artist. chain on its platform and Meta (ex-Facebook) grants $0.10 per user.

“Web 3 will turn the internet into a massive value transfer platform,” summarizes Tangi Le Calvez. “Web3 makes assets much more liquid and makes trading more fluid,” added Elodie de Marchi, chief operations officer at Kaiko, a provider of digital asset data. “Buying an apartment can take three minutes instead of three months.”

scalability problem

But is Web3 really the future of the web? Technical, human and financial factors can at the very least delay its use. To start with: “the technology is not yet able to absorb all the flows of transactions and data that pass through”, emphasizes Tangi Le Calvez. There is a problem of “scalability”, in other words of using the blockchain on a very large scale, to record and execute all transactions without causing network saturation.

“Today there is no infrastructure that allows for mass adoption,” admits Elodie de Marchi. And several blockchains, such as Solana and Ethereum, are already suffering from major congestion issues.

A decentralized universe that is difficult to regulate

Then this new universe generally escapes regulation. “When a market represents billions, it is impossible that it is unregulated and that the law cannot punish thieves and hackers,” emphasizes Tangi Le Calvez. But the work is huge, as these new technologies are complex. With a major obstacle: their decentralized operation. “The regulator must exercise its power over a centralized actor,” emphasizes Olivier Jaillon, boss of digital insurer Wakam.

And if the Web3 and the underlying technology on which it is based – the blockchain – should bring greater transparency, by making it possible to verify the history of transactions in public and decentralized ledgers, the applications and projects that reside in this ecosystem are develop far from all reliable and scams are numerous.

Disintermediate financing can weaken small shareholders

The investor protection problem also arises in a decentralized Web3 with no middleman. “We cannot decentralize completely. The technologies remain very complex, few people know how to create a wallet (digital wallet, editor’s note) and analyze transactions on the blockchain,” admits Tangi Le Calvez.

“Disintermediation in finance, does it pay off?” asks Stéphane Reverre, president of SUN ZU Lab, which provides liquidity analysis of the crypto market, bluntly. “The intermediary plays a role of protecting the small holder”, he develops. “Is buying an apartment in five minutes a good thing for both the buyer and seller?” he asks in a new rhetorical question.

The protection of small investors will only intervene “when the legislation has evolved and so has the crypto ecosystem,” estimates Stéphane Reverre. For him, the sector needs to get rid of some of its libertarian ideals. In other words, accept that you are more regulated by the states and centralized institutions.

Demand for Web3 has yet to be confirmed

Besides, do the masses of citizens and users really want Web3? “Users don’t care about their data. I am not saying that it is not desirable to have control over your data, but that the average user is not wanted,” assures Stéphane Reverre.

The use of decentralized financial applications developed on the blockchain is not within everyone’s reach. The population is far from exclusively geeks who love this technology. Many people certainly prefer the ease of use that Web2 offers these days, even if it means giving up control over their data. “We live in closed ecosystems – Android, iOS… – very practical. Are we ready to get out of our chains?” shouts the boss of SUN ZU Lab.

Very skeptical about Web3, he also expresses doubts about its profitability and thus in the long run about the amount of investment it will benefit from. “I don’t see economies of scale in this ecosystem when there are monstrous economies of scale today” in Web2.

Cédric Teissier, founder of Echotraffic, a fund that invests in crypto projects, believes that Web3 will not make Web2 disappear, which has made it possible to develop multiple applications and facilities. “But it is a revolution. The opportunities are huge in the medium and long term,” he says. “Regulators are working on a regulated framework to make this technology the norm.”

A not so decentralized web, with new intermediaries

Still, the nascent Web3 already shows similarities with Web2. “We’re going back to middlemen. The truth (on tomorrow’s web, editor’s note) is certainly somewhere in the middle, between decentralization and centralization,” Tangi Le Calvez hypothesizes. In fact, NFT purchases and sales today mainly take place through the Opensea platform, which largely dominates the ecosystem and charges transaction fees to get paid.The universe of cryptocurrencies already has its giant, centralized exchange platforms, such as Binance and Coinbase.

“In the name of the great ideals at the grassroots level, we will end up with a trading system,” says Stéphane Reverre loosely. “We wonder how we are going to make money. This way of thinking is permeating the blockchain and Web3.”

Meanwhile, it’s clear that more and more real-world brands are trying to invest in this new virtual universe, such as Nike, which launched its first digital sneakers sold in the form of NFTs, or Dolce & Gabbana, which offers “a journey between the real life and the metaverse” to buyers of its non-replaceable tokens. Web3, a new tool to make a profit?

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