Web5 — the future of the Internet, which will overtake Web3 Skip to content
What is Web5 and what happened to Web3 Cover

What is Web5 and what happened to Web3

The crypto community has been talking about the creation of a decentralized Internet for several years now, which is commonly called Web3. But by June 2022, the situation began to change, and Web5 began to be discussed in the blockchain industry.

In the article we will tell you what Web5 is and why people started talking about it before Web3 was created. For clarity, we give simplified examples and analogies.

The essence of Web5

Web5 is an open source decentralized platform concept that was introduced on June 10, 2022 by Twitter co-founder Jack Dorsey. It is being developed by TBD, a division of the Block company, which Dorsey runs after leaving Twitter. 

The name Web5 refers specifically to the platform that Jack Dorsey and TBD are developing. This is the name of the project, and not an approach to the development of the Internet, like Web3. And the number “5” in the name of Web5 means the union of the Web2 and Web3 concepts.

The goal of Web5 is to create a platform that gives users complete control over their personal data and digital identities. Let’s give an example to suggest how this platform will work according to Jack Dorsey’s idea.

Web5 is the name of the project that Jack Dorsey is working on. It’s not a new internet concept like Web3

Now users do not own their personal data. They log in to websites and services using passwords, email and phone number. But the data themselves are stored on the servers of these companies. For example, they may have user passport data, payment history, bank card details, and home address.

Scheme of personal data in Web2
In Web2, the user gives his personal data to services and they store it on their servers

At the same time, no one uses only one service, which is why many companies have this data at once: banks, food delivery services, marketplaces, hospitals, etc. And from time to time, database leaks occur in these companies, and user information is put up for auction on the dark web. Then it is used for spam and scams.

Scheme of personal data in Web5
In Web5, services themselves access the user’s data store and cannot save them to themselves. Therefore, all data is stored only by the user

On the Web5 Internet platform, each user will have their own decentralized storage of personal data. Only the user will have access to it. This storage will be used for authorization in various services: from banks to food delivery. In this case, companies will only be able to read the data. And they will be stored with the user in a cryptographically protected form. Therefore, the problem of personal data leakage will disappear.

Important Web5 components

The Web5 platform is powered by 3 technologies. Below we describe each of them in more detail.

Decentralized Identifiers (DID). They will be generated by the user himself. DID will be used for authorization on the websites of various services. They can be compared to a digital passport with which you can log in to government websites.

Decentralized Web Nodes (DWN). These are the very decentralized storages in which all user data will be stored. They can be compared to a memory card that only the owner has access to. And he himself decides which devices to connect it to.

Verifiable Credentials (VC). These are data formats for cryptographic verification of claims. They can be compared to the encryption systems used in anonymous messengers such as Signal. The message can only be read by its recipient, and it is impossible to recognize the correspondence from the outside. But VCs will be more secure due to the use of cryptography.

Trends that Web5 matches

The Web5 platform is in line with the technological trends that the crypto community is passionate about. Below we tell about them in more detail.

Decentralized Identity. The essence of this concept is to create a replacement for identity documents in digital format using blockchain technologies. Thanks to cryptography, such a system will be able to guarantee the authenticity of the data. And thanks to the blockchain, this data will be impossible to lose, like ordinary documents.

Digital Reputation. This concept complements the Decentralized Identity idea. Its essence is that a person can remain anonymous on the Internet, but this anonymous person will form his own reputation. For example, it will include the history of interactions with other users, reviews, participation in projects, credit history and other data. Some of them will be public, some will not.

Self-sovereign identity (SSI). This is an approach to creating a Digital Identity. Its essence is to give a person his own private repository, information from which he can disclose at will. This approach is used in the Web5 platform.

Soulbound tokens (SBT). This is a new kind of NFT. They will be tied to the owner’s wallet and cannot be sent or sold to anyone. SBT will be accumulated on the wallet and play the role of a reputation. For example, they can be obtained for doing work, participating in conferences and helping the community.

Vitalik Buterin and the Ethereum Foundation are working on the development of SBT. Buterin has already spoken positively about Jack Dorsey’s developments and the DID concept.

Recommended material

For those who want to learn more about MetaFi. In the article we tell what this term means and how it will change the Internet.

Differences between Web5 and Web3

Jack Dorsey has repeatedly criticized the concept of Web3. In his opinion, it is focused on earnings and the financial component. Web3 uses blockchains everywhere with their own tokens. This leads to 3 problems:

  • instead of developing technologies, most projects and users are trying to make money;;
  • focus on short-term profit leads to a large number of projects operating on the principle of pyramid schemes;
  • the influence of venture capital funds reduces the decentralization of projects. Most blockchain startups survive on investments from these funds and give them a significant share of their tokens. As a result, large investors have shares in many projects and, consequently, influence on the entire Web3 system.
Initial token allocations diagram by Messari
Messari statistics on the initial allocation of tokens in public blockchains. The share of tokens owned by venture funds and the development team is marked in red

Therefore, there will be no tokens in Web5. But the bitcoin blockchain will be partially involved in the project. How exactly Web5 will use it, the developers have not yet specified.

Conclusion

Web5 is an open source decentralized platform developed by the Jack Dorsey’s Block company. It will provide users with their own storage of personal data, access to which will only be theirs. And the services that people use will only be able to read this data with the user’s permission.


Editor:
Andrei Lapushkin

Cover and illustrations:
Julia Chistyakova

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