What is Web 3.0 and why it is being called next generation internet?

The current version of the world wide web or Web 2.0 is characterised by social media platforms, which allow greater proliferation of user-generated content. This is a far cry from Web 1.0, which was all static and non-interactive -- an entirely top-down approach towards information dissemination. 
 

Right now, five big tech companies, namely, Twitter, Facebook (now Meta), Google, Apple, Microsoft and Amazon, control how our data will be used and where it will be stored and processed. Their algorithms decide the information that we consume, which has left alarm bells ringing. 

Now, Web 3.0, with its crypto, blockchain and metaverse use cases, is being touted as a movement that will wrest back the control of the internet from the five big tech companies. Instead of our data residing with centralised organisations today, Web 3.0 would see it residing on blockchain networks and thus, being owned by users themselves. 

It could be as simple as a user based in India and another based in the US, having a business meeting inside a virtual reality metaverse such as Decentraland, which is built on the Ethereum blockchain. They could then complete their planned business deal using their crypto wallets linked to their metaverse accounts. And that’s that. Facebook realises that this is the future of the internet, hence its rebranding to Meta. 

Such is the craze around metaverse that people and organisations are spending millions of dollars to buy land that only exists inside these virtual worlds. But it makes business sense. Because in a future when people are going to wear their VR headsets and meet inside these virtual worlds for social gatherings, music concerts and art auctions, you need land here for advertising and events.  

However, as there are proponents, so there are sceptics as well.  Twitter cofounder and former CEO Jack Dorsey has denounced the much-hyped “decentralised” feature of Web 3.0. 

He recently tweeted.  “You don’t own ‘Web 3.0’. The VCs and their LPs do. It will never escape their incentives. It’s ultimately a centralised entity with a different label. Know what you’re getting into…”

Angel investor and former CTO at Coinbase Balaji Srinivasan replied, saying that Twitter’s corporate and political incentives led to deplatforming and censorship, and that Web 3.0 could possibly be better.

Jack replied saying that Web 3.0 has the same corporate incentives but hides it under “decentralisation”. 

While naysayers remain, the Web 3.0 opportunity in India has already got venture capital firms excited. 

Early-stage Indian VC firm Antler India has committed to invest in 25-30 startups in the blockchain and Web 3.0 space in the next 2-3 years. It plans to deploy $100 million - $150 million in over 100 Indian startups over the next 3 years, of which up to $50 million is committed to the Web 3.0 space. 

The fund will make a minimum investment of $250,000 and will come in at a pre-product market fit stage.

This represents a marked shift from the status quo, where there hasn’t been much early-stage funding available for Indian crypto and blockchain startups. 

According to new research by the US India Strategic Partnership Forum (USISPF) and digital currency exchange CrossTower, Web 3.0 can help India contribute an additional $1.1 trillion of economic growth to its GDP over the next 11 years. Digital assets like Bitcoin, Ether, Solana, Algorand, Stablecoins and other blockchains are the fuel of the future financial ecosystem and Web 3.0.

Whether India will be able to harness the potential of Web 3.0 early on will obviously depend on the regulatory approach we take on cryptocurrencies. The answers to these questions will be found in the next year.