What to know as the internet embraces blockchain

Yahoo Finance’s Dan Howley explains what exactly web3 is, how companies and brands are planning to use that online space, and the criticisms tech leaders such as Jack Dorsey are lobbing at venture capitalist firms investing into the platform.

Video Transcript

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AKIKO FUJITA: Well, a Twitter spat between Block CEO Jack Dorsey and venture capitalist Marc Andreessen is sparking new conversation around Web 3 and what it really means. Dorsey taking to Twitter saying he’s been blocked by Andreessen after questioning how decentralized Web 3 really is. Here to explain in this week’s “Tech Support,” we’ve got Yahoo Finance’s Dan Howley. Dan, a lot of explanation needed, because there are some viewers who are saying, well, what is Web 3 exactly? But set this up for us and what sparked this conversation on Twitter in the first place.

DAN HOWLEY: Yeah, OK. Let’s start with the idea of Mark Andreessen and Jack Dorsey going back and forth and then Andreessen blocking Dorsey on Twitter. I think that’s pretty fun to see. But what’s happening here is there was a “New York Times” piece that basically said that Andreessen is– and Jason Horowitz– are going and lobbying in DC about Web 3, Web 3.0, and blockchain technology, crypto, things along those lines.

And basically, the idea behind Web 3 is– and we’ll dive in in a second more– is a decentralized internet. Now, Jack Dorsey, who’s a booster of things like Bitcoin, says that, look, if you’ve got a big VC firm that’s lobbying in DC, well, that’s not going to be a decentralized kind of internet. It’s going to be centralized again in the hands of these power players. And when Dorsey brought that up, Andreessen went ahead and blocked him on Twitter. It’s also worth pointing out that Elon Musk has said some divisive things about Web 3, basically saying that’s more marketing than anything else.

So what is Web 3? Well, let’s start off with what Web 1 was. Web 1 was basically your Geocities, your basic message boards, things like that that you did in the early internet. And if you’re in your early 20s, then that’s basically the technological Stone Age to you. So after that, we had Web 2. That would be things like your Facebooks, your YouTubes, your Ubers, your Venmos, essentially how the internet exists now.

Web 3 is an evolution, just as Web 2 was an evolution, of what we have now for the internet. But it’s a more idealistic version based on blockchain technology. And God, I hate saying that because it just seems like the most cringy marketing word that you can throw out there now. But that’s the reality of it.

And so the idea is for the internet to not be held in the hands of these big conglomerates or corporations, whether that’s Google, Amazon, Apple, Microsoft. It would be held in the hands of individual users. And there would be a decentralized way where you could use services or websites, participate in communities that would be spread out amongst different networks and all be validated through the blockchain. And as a result, users rather than the companies would take ownership of these sites and services.

The more they contribute, the more they would then have ownership. That’s the idealized version of all this. Now, where do the things like NFTs and the metaverse, and any other kind of buzzword you want to throw in there, fit in? Well, the idea is that you would be able to take your data from one place to another seamlessly. Now, if you try to do that now– if you’re an Android user and you try to bring your data over to iOS or vice versa, or from Google to something else, or Facebook to Snap, it doesn’t really work very well. It’s incredibly difficult.

Yes, you’re going to get some of your data. Some of it’s just going to get lost. Things that you purchased on one platform, well, guess what? You’re going to have to purchase it again on another platform. The idea here is that you wouldn’t have to do any of that. All of your data would be fluid. You’ll be able to move it in and out of different platforms, no problem.

Sounds great. The reality, though, is it’s probably not going to work out that way. And I’m preparing for my Twitter to now be completely annihilated by Web 3 boosters and the like. But what you’re going to end up having, most likely, is a mixture of these ideas where we’ll continue to have things like Web 2.0 and some ideas from Web 3. I don’t think, necessarily, that Google and Amazon and Facebook, these trillion-dollar companies– near trillion-dollar companies in the case of Facebook– are going to give up overnight and just say, you got it, guys. Let’s just go with this open and decentralized internet.

They already are working on their versions of Web 3 or technologies that work with Web 3. So when it comes to the metaverse– which Meta, now Facebook, or however you want to refer to it– that’s also working in there. The idea being that when Mark Zuckerberg talked about Meta and talked about the metaverse, he discussed ways where users could, again, fluidly move between virtual worlds. That’s the same idea that we’re looking at with this idea of Web 3 where you can take your accounts from here to there without issue.

That would need to be incredibly successful for this idea of the metaverse to take off. But again, there’s the big gatekeeper telling you what Web 3 and the metaverse would be. So I do think that it’s going to be this kind of mixture. Is it really just a – that people want to throw around there and a form of marketing? Sure, to a degree. It’s the exact same thing that we have with blockchain.

I can’t tell you how many PR emails that I get– and I’m sure you do too, Akiko– where it’s NFT, blockchain– I don’t know– disruption.

AKIKO FUJITA: Metaverse, metaverse. That is buzzword, right?

DAN HOWLEY: Exactly, yes.

AKIKO FUJITA: I’m glad you called them buzzwords, by the way, because there’s a lot of people who’ve been working at this for years who are suddenly saying, wait, where did you come from in this conversation to talk about this technology? But Dan Howley is always breaking it all down for us. I bet a lot of people doing a Google search on Web 3 after this spat played out on Twitter.

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