Web3 is the next era of the web.

Web1 began when the web protocol was introduced in the early 1990’s. It had a decentralized, open shape to it that supported internet freedom, but the user experience was clunky and use was limited. Web2 began in the mid 2000’s when large corporations built centralized platforms with proprietary services that have consolidated data and restricted access to information, but the slick user experience has made it part of everyday life. Web2 is dependent on ad-based business models that incentivize companies to engage in surveillance, monitoring, manipulation & censorship. Web3 offers the best of both previous eras without the problems - it’s decentralized and open like web1, it has the ease of use of web2, and includes incentives for better business models.

Watch these videos to learn more about what’s wrong with web2 and why we need web3.

These networks use open protocols to offer access to infrastructure and hardware like cloud compute, file storage, video transcoding and indexing. Tokens are used to coordinate and incentivize a decentralized network of infrastructure service providers. DePIN services are attractive because they offer far greater reliability and resilience against attack at a much lower cost.

Learn more about DePIN from the researcher who coined the term.

Decentralized web3 infrastructure creates a web that is much more free, fair, efficient and resilient than centralized web2.

For example, apps built on infrastructure controlled by Goliath’s like Amazon Web Services can face the awkward situation of paying half of their revenues to the platform they’re aiming to disrupt. If their app is successful despite the odds and they become seen as competition by the large companies they depend upon for services, they could lose access to the infrastructure they need.

Although both may use blockchain technology, web3 infrastructure protocols are different from decentralized financial (DeFi) services and have distinct regulatory considerations such as:

• Infrastructure networks require tokens to coordinate the activities of computers providing services, and requiring AML and KYC for these machine to machine transactions would create an unreasonable burden.

• Entrepreneurs need to be able to legally fundraise to build decentralized infrastructure protocols, and American citizens need to be allowed to participate in offering resources to these networks.

• Incumbent web2 platforms currently have unfair advantages over web3 competitors because of unclear application of regulations like money service business and blue sky laws.

• Lumping regulations for web3 infrastructure with digital assets is dangerous - just because a token is involved does not mean its purpose is finance-focused. For example, money is exchanged to pay for hosting services on AWS, but using AWS is not considered a financial service. By definition, infrastructure tokens are intended to be used for obtaining access to infrastructure as a service, not for financial services.

Donations to Web3 Working Group are tax deductible because it is a tax exempt 501c3 nonprofit organization. We were initially funded by donations from Akash, Arweave, Livepeer and The Graph and are exploring membership options for other DePIN companies. If you’re interested in partnering or supporting our work please get in touch.

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