Introduction

Over the last three decades of popular internet adoption, control over key internet infrastructure has followed a trend of steadily centralizing into the hands of a small number of infrastructure providers. Today, most of the internet is hosted by a combination of Google, IBM, Amazon and Microsoft; Facebook and Twitter control the vast majority of our once peer-to-peer online communication; and small online stores have been replaced by Amazon accounts. At an ideological level, today’s internet is of course very problematic; censorship has become the norm on centralized platforms as these mega-corporations continuously punish original, dissident and divergent thought. Additionally, users have become ‘the product’ for big tech companies — through privacy-invading data mining and targeted advertising, sometimes it can feel like big tech knows more about ourselves than we do. Beyond political reasons for being worried about the current state of the internet, however, there are also practical concerns: what happens if the few major providers who support the internet go down? The internet is no longer a playground for hobbyists; today trillions of dollars worth of economic activity has become dependent on efficient and reliable communication being available 24/7. Web3.0, which broadly refers to the new generation of decentralized and incentivized digital networks, offers a vision of a future where digital life is no longer dependent on FAANG.

Web3 and New Economic Models

Web3 is a collection of technologies, largely based upon blockchains and other trustless decentralized network models, that accomplish two primary goals: 1) eliminate central points of failure within networks by flattening their topology, and 2) enable each user to retain sovereignty over their own data and identity. Smart contract enabled blockchains like Ethereum use these features primarily for financial transactions, simultaneously unlocking new economic models and redefining the relationship between provider and consumer. Protocols enable broad ownership of networks via DAOs, giving ordinary participants the opportunity to partake in a proportional share of the protocol’s revenue. Producers of data for these networks (‘consumers’) are able to retain their data sovereignty while receiving compensation for the information they provide. Although Web1.0 was also a decentralized internet, it was not trustless, which is the key that has allowed for this economic paradigm to emerge.

Defining the new Tech Stack

Assuming global society remains on its current trajectory, humans worldwide are destined (or doomed, depending on your viewpoint) to spend an ever growing portion of our lives online. Jobs, relationships, friendships and educations can all begin and end online, with no grounding in the real world. All these activities require platforms for mediation, but for these platforms to be truly composable, creating the ‘Metaverse’, they will need to be built on a decentralized technology stack. The metaverse’s digital analog of globalization in the real world will be decentralization. Emerging distributed networks, focusing on providing services other than smart contracting and value transfer, are shifting the digital landscape and reinventing the technology stack that supports the applications we use every day.

When China opened the overland ‘silk railway’ between Asia and Europe, a multitude of independent sections of track, managed by different polities, were strung together and tested by a lone train, that completed its first journey in 2017. Likewise, the packets of data that support various dApps that migrate to the fully decentralized stack will zigzag across a multitude of networks before being served to their destination.

The Pieces

Chain clients

Blockchains are dependent on thousands of nodes communicating between one another in order to maintain consensus. Over time, the cost to run these nodes increases as the total size of networks increase, decreasing the pool of willing node operators. Networks like Pocket incentivize users for running nodes with token yields, subsidizing the rising storage requirements.

Smart Contracts : Composable ecosystems for financial transactions

Smart contract chains are the nexus of any web3 app. Smart contracts that are executed by various chains maintain the primary logic of applications and facilitate financial transactions.

Data storage

Data storage is highly important for any application that wants to maintain a long term history of its internal state. Because the cost of writing data directly to smart contract chains is very high, networks optimized for large scale data storage have emerged. These fall into three economic models: vanilla IPFS (interplanetary filesystem), where users must secure operators willing to maintain their data themselves; Incentivized IPFS, where cryptonetworks are used alongside IPFS to incentivize parties to do short term storage; and permanent storage where users pay once for perpetual data storage.

Content delivery and Data availability

Highly mutable data requires lower-latency information streams in order to provide information to users quickly. These data are provided by separate systems from decentralized databases.

Data Feeds/Oracles

In order to bring data from the ‘real world’ (or web2) into blockchain networks, consensus on the validity of the information must be provided. Today this is achieved by Oracle networks like Chainlink, that provide verifiable random numbers, price feeds and other data directly to smart contracts.

SDKs and APIs

The SDK layer is highly important for building decentralized applications that run using native system libraries rather than slower browser-based frameworks. Additionally, decentralized SDK networks will allow legacy web2 backends to integrate with cryptonetworks.

Computation

When carrying out computations that are not directly connected to financial transactions it is best to make use of networks that are optimized for generalized compute. Complex mathematics, and running virtual execution environments would be otherwise unfeasible

Gaming and Graphics Rendering

Game engines and graphical rendering will be immensely important for the immersive experiences most have come to expect out of the metaverse. Like generalized compute, these operations require specialized networks that leverage thousands of user GPUs in order to keep the cost of computation reasonable.

Communication and data transfer

Consensus mechanisms can efficiently establish truth within an in-group of nodes, but bridging information between these groups while maintaining trust is an additional challenge. Bridging networks and messaging protocols enable these data to move between blockchains

Domain names and DID

Domain names have become a fundamental internet primitive, but at the same time are one of the most centralized aspects of the web2 technology stack. Projects like Handshake and ENS are working to create decentralized alternatives.

Notifications

Push notifications are a minor feature of most applications but an important part of any applications user experience. Delivering these using decentralized networks will be as important as any other layer of the stack.

These pieces, when combined together into a cohesive system, can enable an application to operate entirely outside of the ecosystem of centralized providers. Today many applications make use of subsets of these technologies, creating semi-decentralized applications. Applications of the future, however, in order to fully maximize their decentralization, will need to pull all these pieces together:

But Ser, Why?

Integrating potentially dozens of protocols, each with different economic models, will initially be a difficult task. For comparison, consider running a traditional website: there are still dozens of frameworks and applications required to make even a simple site work: The hardware itself, then Linux, then a server application like Ngnix or Apache, a domain registry, an ssl certificate, monitoring software, a database, a load balancer, javascript, various frontend and backend frameworks, etc. As with web3, each of these technologies are different and most people are not highly proficient in all of them. Thus, solutions like Wordpress pull most of these under one roof, and allow for point-and-click deployments. Why won’t web3 face the same centralizing pressures in time that web1 eventually did? Because all these protocols are composable in ways that web1.0 was not. They can permissionlessly talk to one another in the same way they talk to users. Thus, the aggregator of any subset of the above services only has to mediate the messaging between protocols. Web2 became centralized precisely because services were not composable; they provided no incentive to work together with other providers. Rather, a service provider was incentivized to aggregate the control of as many aspects of this process as possible under one entity, as opposed to the web3 model, that grants community ownership to each layer of the stack. The neostack will combine the notion of a producer and consumer; beneficiaries at one layer can be consumers at another.

Conclusion

We are entering a golden age of digital life. For the first time since the beginning of the internet, there will be no need for a tradeoff between sovereignty and performance. Privacy, censorship resistance and antifragility, once idiosyncratic lines in the sand drawn by cypherpunks and other radicals, are now also becoming the pragmatic way forward as well. Web3 technology has advanced significantly in the last 5 years, and today awaits mass adoption and the new use cases that will come with it. Trains that traverse the Eurasian continent from Yiwu to London must cross tracks operated by a number of companies and governments. In Web3, the data we consume regulary will find its way to our devices by hopping through a patchwork of decentralized networks loosely connected together. Resource networks that facilitate what will become increasingly complicated flows of information from origin to user certainly will grow to be among the most important networks.