The most popular buzzwords of our time have evolved from simple jargon to defining multi-million dollar industries. Whether it be Augmented Reality (AR) or Web3, buzzwords can garner lots of attention when describing technologies and cultural and social situations.
So what makes a buzzword such as Web3 so special?
Buzzwords generally define trends that may or may not explode in popularity over time.
The “Internet” was just a buzzword in the late 1960s that never really took off until 1996, wherein 100’000 websites were launched on Netscape Navigator, the premier web browser at the time. It is quite a feat considering there were only 130 websites available in 1993.
Another successful buzzword is “artificial intelligence,” which was coined in 1956 but did not transform the world until the 2000s after millions of dollars were poured into the project by the government. Thus began the endless streams of algorithms and datasets being fed into an AI until it was able to magically accomplish a list of challenging tasks such as creating self-driving cars, predicting Alzheimer’s, developing vaccines, and last but not least, advancing quantum computing systems.
Although historically, it has taken a while for buzzwords to gain a life of their own; however, today, buzzwords have become highly sought-after investment opportunities as the world constantly evolves thanks to innovation. For example, the Metaverse was another trending topic thrown around for a while as VR technology grew more and more popular after 2011.
One of the first prominent metaverses, Place, was built by Ikea to allow users to move around in a virtual world where they can create their own rooms using their favorite Ikea furniture sets. Apart from Facebook changing its name to “Meta” to establish its stance as a metaverse company, there are countless companies, venture capitalists, and organizations who are behind the Web3/metaverse trend.
Interestingly, in only the first five months of 2021, over $120 billion was invested in developing metaverse technology.
To further understand how buzzwords gain traction, let’s investigate what might be the not-so-distant future of the internet itself:
Web3: A Deep Dive
The Internet and the World Wide Web were era-defining inventions, although they initially started as unimportant buzzwords. But the problem with today’s internet, aka Web2, is that users are at the mercy of big tech companies such as Google, Facebook, YouTube, and more. These websites have been reported to:
- Selling their users’ private data to data harvesters.
- Tracking the browsing history of their users to gain valuable marketing information and launch targeted marketing campaigns.
- Unsatisfyingly censoring creators from posting content.
Web3 projects aim to solve these issues using decentralization, blockchain technology, Web3 browsers, token-based economies, and other tools designed to allow users to enjoy a future of the internet that is secure, uncensored, and manipulated.
Some forms of Web3 include decentralized social media platforms, “play-to-earn” video games (players rewarded with cryptocurrency tokens), and NFT platforms.
The idea of decentralized internet and decentralized payment, aka Web3.0, has grown increasingly popular over the last couple of years, as proven by its 200k Google searches a month and Binance Labs’ decision to invest $500 million in Web3-based startups. Even investors not belonging to the crypto world have opened huge bets on the future of Web3. A few months ago, Silicon Valley-based venture capital firm Andreessen Horowitz announced a $4.5 billion fund dedicated to advancing Web3 projects.
Do web 3.0 projects have any real use-case?
Filecoin is one successful project with real use cases taking back control from centralized data storage providers. Filecoin is a decentralized data storage network that allows users to sell their excess storage on an open platform. Recently, Filecoin’s ICO (initial coin offering) has been reported to have raised a whopping $257 Million from retail investors and high-profile venture capitalists (VC), including Sequoia Capital. Within a year of launch, Filecoin became the go-to protocol for developers looking for storage systems for their Web3 applications. The Web3 hype was a potent accelerant for adopting Filecoin-based storage systems.
Currently, it can be deduced that Web3 is at a valuation of just under $50 billion, with the #1 Web3 token Polkadot (DOT) sitting at a market cap of $17 billion.
With so much hype being thrown into Web3, it is apparent that there is an increasing number of internet users who yearn for a decentralized internet that is secure and can reward users with tokens for participation and engagement in activities.
The problems solved by Web3 are quite real. Big Web2 companies such as Facebook, Instagram, and Google have repeatedly been accused of invading people’s privacy by stealing, selling, and monetizing their users’ data. But Web3 websites, on the other hand, are unable to own and manipulate their users’ data as everything is made transparent on the blockchain. The whole idea is to empower the user as much as possible.
As a result, decentralized social media platforms such as Lens Protocol have attracted tons of users worldwide who wish for a social life unhindered by shady tech companies.
“Today the frontier is on the internet and even on the internet, the frontier is within Web3 and crypto because it’s sort of the least regulated the most decentralized, most permissionless, 24x7x365 markets that are self-funding problem solvers from all around the world.”Naval, Billionaire Crypto Investor
Here’s Why Web3 Could Fail To Be An Era-Defining Buzzword
Not everything is sunshine and rainbows in the world of Web3.
Web3 also has its fair share of scammers, con artists, and other bad actors using the Web3 hype to generate significant investment funds before pulling off the fraud of their lives. Critics argue that the Web3 hype is just a cocktail of flashy marketing, fear of missing out, and a get-rich-quick investment opportunity.
Top crypto security firm CertiK estimates that companies working with Web3 have lost over $2 billion thanks to state-backed cyber criminals working from countries such as Russia and North Korea.
Web3 investors defrauded typically includes phishing, crypto wallet exploitations, and scams.
However, attacks have become more sophisticated to the point where it became possible to use flash loan attacks to attempt a hostile takeover on a prominent Web3 project. Using flash loan attacks, hackers were able to steal $182 million in just 13 seconds from a Web3 protocol named Beanstalk Farms.
Another point to consider is that most Web3 projects have a native token that can be bought or sold by investors. As a result, big crypto spenders have taken this chance to devise elaborate pump and dump schemes.
Perhaps it is all the hype revolving around Web3 that may have turned it into a false money-grabbing mechanism.
So the question remains: “is Web3 just a buzzword designed to be a cash-grab or is it really the future of the World Wide Web?”
Only time will tell.
“Over $2 Billion has been lost in Q1 and Q2 alone, meaning that 2022 has already lost more to hacks and exploits than the entirety of 2021.”
It is essential to be fully aware of how powerful buzzwords can be. Even the internet, when it was released in the late 1900s, was heavily doubted and was not poised for success.
The skepticism towards web3 is similar to Bitcoin’s rocky history before it finally took off in the last few years.
The best way to make use of such buzzwords is to carry out tons of research to determine whether or not a revolutionary use case truly exists. Only then it’d be possible to consider investing in the project, not in the buzzword itself.
Mortuza is a certified Digital marketer with a Master’s degree in International Economic Relations (Spec. International Business).
An entrepreneurial professional, crypto native, and deeply involved in web3, i.e., blockchain, NFT & metaverse community. The author spends hours researching all the exciting new trends in the broader business world.