Categories: Ethereum

The Internet As We Know it Needs ‘a Complete Replacement’

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Dominant Internet companies like Facebook and Google have been dogged by controversy in recent years. But there are efforts afoot to create an alternative, known as “Web 3.0,” that would hand more power back to users and small businesses.

The goal is to build systems that look more like open protocols—think email and RSS feeds—and less like profit-driven companies, Consensys CEO Joe Lubin told attendees Wednesday at Fortune’s Brainstorm Tech conference in Aspen, Colo. Many of these new systems rely on blockchain, a kind of distributed database, and Lubin is a co-creator of one of the biggest, Ethereum.

True to the Web 3.0 ethos, Lubin no longer has a formal role in Ethereum, which is instead governed by a nonprofit foundation. Consensys, which Lubin founded, develops tools and applications for Ethereum.

In the five years since Ethereum’s launch, others have followed in its footsteps. Dfinity, for instance, is “intended as a complete replacement" for existing Internet infrastructure, CEO Dominic Williams said during the same panel. Other prominent Web 3.0 efforts include Blockstack, a startup that recently received SEC approval to raise $28 million through a regulated cryptocurrency sale; and Polkadot, which aims to knit the various blockchain systems together.

Public awareness about the downsides of huge social-media services has exploded over the past three years, largely catalyzed by the leak of user data by Facebook to Cambridge Analytica. Surveys have shown declining consumer trust in social media companies, whether the issue is controlling hate speech, the policing of false or misleading information, or the handling of personal data.

As worried as consumers are about privacy, the risk to businesses could be even bigger. Businesses that rely on data or other resources from the likes of Facebook or LinkedIn are at risk, Williams pointed out, to the possibility that crucial sources of infrastructure will suddenly change the rules. As an example, he cited social gaming company Zynga, which suffered major setbacks in 2012 after Facebook changed its policies.

“If you build on big tech, you’re building on sand,” said Williams. “You just can’t trust it.”

The problem is exacerbated, according to Lubin, by the conflicting motives of big Internet companies and the smaller players that depend on them. As companies like Twitter and YouTube strive to make more money, Lubin claimed, “they’re probably going to have to eat your lunch.” That’s a particular worry for smaller operations, since the big companies face few consequences for changing the rules.

YouTube, for example, has become notorious for changes to its rules for paying creators, which have sometimes had serious consequences for the mostly-independent creators. A startup called Dlive has pitched itself as a blockchain-based YouTube alternative, and already notched a major win by attracting giant gaming star PewDiePie.

Williams believes a new kind of Internet will be fueled by that simple strategic concern. “Would you rather build on a closed, proprietary LinkedIn . . . or an open [alternative to] LinkedIn that would ensure your access is always open?”

Despite motives for both users and developers, it’s still unclear whether a new blockchain-based Web 3.0 will succeed. Even after five years, applications on Ethereum mostly include simple games and experimental financial tools, and adoption is limited. Fewer than 100,000 people appear to have used an Ethereum application this year.

Ironically, the most high-profile of those new initiatives is Libra, a digital currency spearheaded by the most troubled platform of the old guard—Facebook.

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