There are historic roots to these issues. We first had the computer, then the Internet was invented, which connected these stand-alone computers with each other through a data transmission protocol. In the early days of personal computers, we used to save data on a floppy disc, eject it, walk over to the person who needed the le, and copy the le onto their computer so they could use it. If that person was in another country, you would need to mail the oppy disc to them. The Internet and the emergence of the WWW put an end to this by providing a data transmission protocol – TCP/IP – that made the transfer of data faster and massively reduced the transaction costs of information exchange. Ten years later, the Internet became more mature and programmable. We saw the rise of the so-called Web2, which brought us social media and e-commerce platforms. The Web2 revolutionized social interactions, bringing producers and consumers of information, goods, and services closer together, and allowed us to enjoy P2P interactions on a global scale, but always with a middleman: a platform acting as a trusted intermediary between two people who do not know or trust each other. While these platforms have done a fantastic job of creating a P2P economy, with a sophisticated content discovery and value settlement layer, they also dictate all rules of the transactions, and they control all data of their users.

The Internet we use today predominantly builds on the idea of the stand-alone computer. Data is centrally stored and managed on servers of trusted institutions. The data on these servers is protected by firewalls, and system administrators are needed to manage these servers and their firewalls. Trying to manipulate data on a server resembles breaking into a house, where security is provided by a fence and an alarm system.

In this context, blockchain seems to be a driving force of the next-generation Internet, what some refer to as the Web3. Blockchain reinvents the way data is stored and managed. It provides a unique set of data (a universal state layer) that is collectively managed. This unique state layer for the first time enables a value settlement layer for the Internet. It allows us to send files in a copy-protected way, enabling true P2P transactions without intermediaries, and it all started with the emergence of Bitcoin.

The Bitcoin blockchain and similar protocols are designed in a way that you would need to break into multiple houses around the globe simultaneously, which each have their own fence and alarm system, in order to breach them. This is possible but prohibitively expensive. In the Web3, data is stored in multiple copies of a P2P network. The management rules are formalized in the protocol and secured by majority consensus of all network participants, who are incentivized with a native network token for their activities. Blockchain, as the backbone of the Web3, redefines the data structures in the backend of the Web, now that we live in a connected world. It introduces a governance layer that runs on top of the current Internet, that allows for two people who do not know or trust each other to reach and settle agreements over the Web.