In 1970, the economist Albert Hirschman published “Exit, Voice, and Loyalty,” a seminal study on human behavior in the face of failing institutions. Customers and citizens can choose to cease consuming, speak up, or stay true when quality deteriorates, according to his schema.
This paradigm has always had limitations, but technology now allows us to respond in a new and exciting way: build. So far, the “building” of the tech sector has been concentrated on software, with many of our generation’s most successful businesses based on code. Many are exploring what they view as the new internet frontier as interest develops in blockchain-based technologies that are supposed to promote privacy and security, such as Web 3.0 and decentralized autonomous organizations.
We are likely to see the emergence of new sorts of organizational structures for the network age due to the amount of energy and resources being invested in this investigation of new technologies. These innovative institutions model a new sort of ownership, reorganize social relations, and, in the end, provide a new mechanism for innovation.
Sir Tim Berners-Lee authored a fundamental article detailing his vision for the web as a network of open protocols a little more than 30 years ago. One of the essential requirements of this new network, known as Web 1.0, was decentralization.
As the arteries that connect the modern globe grew in number, however, the tech behemoths started to dominate. Companies controlled the servers and consolidated the system as a result of the change to Web 2.0, which is effectively the approach today.
For many, this shattered the web’s essential ethos: One of the most important benefits, more autonomy and opportunity, had been squandered by yielding control to a few firms. However, the emergence of cryptocurrencies has resurrected the Web 1.0 concept.
As Chris Dixon of venture capital firm a16z has written, Web 3.0 “combines the decentralized, community-governed ethos of Web 1 with the advanced, modern functionality of Web 2.” Or as the investor Packy McCormick puts it, the internet is owned by builders and users, and value transfers occur with the use of tokens.
If tokens allow innovators to capture economic value without shutting down the network, Web 3.0 will also help to change the incentive structure needed to solve the world’s most pressing issues. It aims to develop communal funding solutions for items with strong social effect that are frequently difficult to finance.
Experimental, outlier solutions—such as human longevity research, which receives little public funding—become viable, requiring only a few individuals’ participation rather than relying exclusively on government intent or typical business investment. This is what’s needed to bridge the gap between today’s institutions and the issues they’re unprepared to handle.
The technological revolution that began with Web 1.0 has proven liberating for a large portion of the world’s population. The march of progress has generally been a wonderful thing, from the ease with which we can navigate life through a smartphone to the advancements that technology is facilitating in health. From a social standpoint, it has increased individual liberty while also allowing for many more opportunities to build new links of community and collaboration. In the end, it has reduced our reliance on the state as an organizing force.
The web’s broader social and global realignment can be compared to humanity’s long-term journey from tribes to hierarchical systems to today’s era of collaborative networks. These new communities have frequently been cultural, driven by similar ideas, such as Black Lives Matter, but they have also spawned scientific and technological advancement. This was the case with the distributed research project on protein folding, Folding@home, which helped scientists use latent computing power to develop new therapeutics for COVID-19.
Web 3.0 and decentralized autonomous organizations (DAOs) provide this cultural element but also attempt to put a new structure behind it. DAOs act as vehicles for collaboration among diverse groups online with no centralized leadership. The technical principles underpinning the DAO are those which built crypto and blockchain: openness, transparency and, through tokens, participation.
For others, this structure may not appear to be particularly revolutionary or enticing; the token is the only thing that is truly unique. Others see it as a new way to construct, as it presents a growth paradigm that can overcome the “bootstrapping problem.” This is one of the reasons why some opponents point to the speculative character of some aspects of crypto—or, more lately, nonfungible tokens (NFTs) —as a source of concern. In reality, the larger issue is one of property rights and ownership in the digital age.
In an environment of long-term low interest rates, many people interested in Web 3.0 are chasing immediate gains, which isn’t inherently illogical because many traditional investment techniques offer low yields. However, these disparate groups are frequently unified in their desire to rethink old structures and organizations. Blockchain Socialist, on the other hand, sees Web 3.0 as a crucial organizing tool for the anti-capitalist left. It shows a reality closer to that of the sovereign individual on the right, particularly among libertarian-leaning groups, and it demonstrates waning governmental power.
The aim to establish new forms of motivated involvement, whether in games, publishing platforms, decentralized finance, or scientific discovery in the white spaces of information, is part of Web 3.0’s appeal. However, putting these good ideas into action is tough. With inventive scientists unable to gain mainstream financing all too often, dispersed social structures offer a new method to fund cutting-edge research agendas, such as in biotech or space, where progress has been delayed by sclerotic structures or prevailing political winds.
Existing institutions’ lethargy has prompted some who are enthusiastic about our collective skills to look beyond the box. VitaDAO, for example, portrays itself as a “decentralized collective” that funds early-stage human longevity research.
Longevity research is still in its early stages. Although the National Institutes of Health has a Division of Aging Biology, and longevity searches in PubMed have climbed fivefold since 2000, they are still ten times lower than cancer searches, for example. Researchers in technology domains will aim to confront the more radical and future-oriented topics.
At a time when nationalism and protectionism are on the rise again, it’s unlikely that many politicians will support Web 3.0’s increased decentralization. In fact, one of the key battlegrounds in recent years has been over who owns the internet. The “splinternet” is a clash of ideologies between an authoritarian perspective of the internet and a free and open internet. This fight demonstrates why Web 3.0 and DAOs should not be portrayed as a utopian vision. Rather, these concepts revolve around the potential that the web’s evolution brings, as well as the institutions and networks that it produces. The discussion is essentially about governance.
Some experts such as Balaji S. Srinivasan have brilliantly laid out the idea of a Network State, which “starts with a virtual university, bootstraps a digital economy, and can be forked to create new opt-in polities.” This network state may become a technological possibility in the near future, and physical nations should consider the benefits of decentralization more carefully. In a post-COVID era, governments will undoubtedly compete for global talent in innovative ways, as Estonia has done with its e-Residency.
Although the world of Web 3.0 is still a long way off, companies like Cloudflare are betting on it. We’re definitely nearing the pinnacle of inflated expectations right now. Those who are typically reflexively wary of new technology will likely see their pessimism as vindicated in the next trough of disillusionment. Skeptics are sometimes correct, but more often than not, such a mindset is a poor predictor of the future—and it often leads to disengagement at a time when it is desperately required.
Those interested in learning more about how the world is evolving should delve beneath the surface of the crypto excesses criticized by “shitcoins” like Dogecoin. Some may remain suspicious, but Web 3.0 is a people-driven trend, and understanding such trends can reveal a lot about the world we live in. People are expressing themselves in new ways and leaving established organizations that no longer serve them. People today have the tools to develop something new, therefore loyalty to old ideals should not be demanded. It’s an exciting revolution.