Thoughts About Web3: Decentralization, Costs and Deku

Thoughts About Web3: Decentralization, Costs and Deku

Web3 is the next evolutionary step of the Internet. It is a fuzzy concept: some developers mean meta-universes and interactivity, others mean digital property and ownership of created content, and some others mean using machine learning wherever they can.

We believe that the essence of Web3 is the decentralization of data storage. In this post, we explain the benefits and challenges it brings, why the entertainment-focused Web3 hasn’t emerged yet, and what sidechains have to do with it. Mini disclaimer: this is our opinion, and we could easily be wrong.

What Web3 Means

By the evolution of the Internet, developers mean the development of communication protocols and the principles of data storage and management. According to these attributes are distinguished three generations of the network:

Web1 – storage of data on the servers of the resource owner;

Web2 – storage of data and backups in the cloud (a distributed centralized network);

Web3 – storage of data and backups in an open and decentralized distributed network.

Obviously, Web1 and Web2 are centralized. The owners of the servers and sites control the information: they can delete, modify, restrict access, or sell it. Media remove content, banks freeze transfers, and Amazon censors Orwell.

Information in Web3 is simultaneously controlled by all copy owners. Examples are blockchain as a database, BitTorrent, and IPFS.

Why Move to Web3 and Why Better Not

Decentralization has many upsides:

  • DAO and democracy: the user can buy tokens or earn them by contributing to a project and influencing its development;
  • Open source: since all information is open, users can access it in any way they want. You can use the official website, work with applications directly through the terminal, or even write a frontend for yourself;
  • Low transaction fees: instead of human intermediaries, it is the virtual machine that works. The cost of the operation depends literally on its volume in bytes;
  • Reliability: no single point of failure. The greater the number of nodes in the network, the harder it is to damage the decentralized system.

Web3 applications, in theory, do not require blind trust, contracts, and agreements from users. The machine will not cheat or discriminate against users unless it is embedded in the code.

However, there are disadvantages:

Scalability issues: the more data the system processes, the higher the cost of operations and the lower the performance;

High cost of error: in the blockchain, it is impossible to undo a transaction performed or to restore the wallet if the key is lost;

Pseudo-anonymity: since all information is open, it is possible to identify any user through analysis.

The developers are trying to solve these disadvantages. For example, Gate.io has added a transaction cancellation mechanism to GateChain, ZK-SNARK provides true anonymity, and L2 solutions provide scalability.

How Web3 Can Impact User Experience

Right now, blockchain technology is used for payments, that is, for serious and relatively simple transactions. But most people use the Internet for entertainment: to read the news, watch videos, and chat with friends.

Entertainment is almost always free because all the information is stored in a centralised fashion and the revenue of the service is enough to pay for storage. But if you decentralize some large service like YouTube, you have to build a data centre with 93 petabytes of storage and add the same amount of space every year to run the node. At that cost, the service would have to charge for data uploads and distribute them among nodes, as it does now in blockchains. For example, in Tezos it costs 0.001 tez to write one byte.

The problem of data storage can be solved in four ways:

  • Charge users to rent storage from independent data centres – Wikipedia;
  • Buy free disk space from users – Filecoin and Storj;
  • Exchange access to a resource for disk space and other computing resources;
  • Provide users only with a protocol for data transfer, so that they allocate space for storage of the data they are interested in – BitTorrent.

In any case, users will have to pay for decentralization and control over their own data. If not with money, then with hardware.

Messengers will be the easiest to move to Web3. Thus, Telegram already caches 1 to 5 GB of messages and media files on devices.

Can Tezos Become a Platform for Entertainment Web3 Applications

Besides the storage problem, Web3 developers need to solve consensus and security problems. But with a sidechain like Deku, those problems are gone: a sidechain runs on individual nodes and provides consensus and ordering of transactions, while its security falls on the shoulders of the mainnet.

Sidechains are less decentralized than L1 chains but they allow you to optimize the protocol for a specific task, including big data storage, messaging, decentralized computing, or gaming.

Bottom line: the infrastructure already exists and is evolving, yet the speed of implementation of the first Web3 applications for the general public rests only on whether most of them are willing to work with data storage and data transfer protocols setups.

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