Over the decades, software creation has moved from mainframes, to servers, to the cloud: all major steps toward programming ease and freedom. And yet developers are still dependent on costly infrastructure to make their visions reality.
To create and maintain client-facing platforms or applications, they must either manage servers and databases themselves or, more realistically, pay near-monopoly cloud services such as AWS to provide them with infrastructure.
Not only are these options expensive and time-consuming, they limit the interoperability of applications, since the data and server logic of each is confined in a walled garden.
The paradigm shift we are witnessing right now — a transition to a decentralized user-owned Internet that is gaining momentum every day — will at last offer developers the freedom to focus on what really matters: building applications that work for users, unfettered by corporate silos.
In this new Internet era, known to supporters as web3, developers can access the resources they need through user-owned infrastructure networks or “work protocols”, the sum of which constitutes a new, permissionless developer platform.
Instead of traditional proprietary cloud providers, these networks are composed of thousands of individual node operators, contributing their resources in exchange for fees and network equity in the form of blockchain-based tokens. And because these legions of node operators compete for work, the capabilities they provide—e.g. compute, storage, bandwidth, indexing, data and identity services—come at a tiny fraction of Web2 costs.
Decentralized networks offer other advantages, too. Not least that they are more private, scalable and secure than their Web2 analogs.
The amount of time and money application developers stand to save by using web3 services varies depending on the protocol. Some work protocols such as Livepeer, the video layer of the web3 stack, have proven cost savings up to 50x compared to traditional centralized cloud providers. Savings of this magnitude can often spell the difference between the success or failure of an idea.
Building on Web3 Protocols
Continuing with a video example, say you’re a developer who has come up with a design for a live streaming app with social features that has the potential to compete with YouTube. However sharp and novel your design, bringing it to life in a Web2 world presents immense challenges, from both a technological and a cost perspective. Infrastructure outlays aside, you’ll also need to manage and store user data and content, implement authentication logic, and meet all the security requirements that come with being the custodian of user data.
This complexity is the reason all of today’s biggest streaming platforms are owned by FAANG companies. Startups who lack enough funding are usually forced to rent cloud infrastructure from Big Tech players like Google and Amazon: the very companies they want to compete with.
The time, cost, and liability present a significant obstacle compared with what you would face building the equivalent application on web3. There, expensive, custodial, and anti-competitive video infrastructure is replaced with an affordable, permissionless, token-coordinated marketplace of video infrastructure operators on Livepeer.
The siloed API you built to query your siloed application data? Replaced with an open and decentralized API such as Graph Protocol, used for querying user application data across networks and blockchains. The liability you incurred managing your application’s user data? Replaced by crypto wallets such as Rainbow Wallet, used to self authenticate and manage their own data.
That’s why web3 has the potential to be life-changing for users as well as developers. The incredibly light cost burden that comes with decentralized infrastructure will almost certainly unleash a whole new wave of apps that would have been impossible under the old pricing structures.
A Showcase for Web3’s Success Stories
It is my overwhelming belief in web3’s potential for positive change that led me to launch The Web3 Index, a new benchmark for measuring the demand for web3 as a platform for decentralized applications.
Unlike many indices in the crypto sphere, The Web3 Index doesn’t weigh listings according to market capitalization or “total value locked (TVL)”. Instead, it uses fundamental data: the fees developers are paying in exchange for real work on the listed networks. There’s a common belief that such evidence of real-world usage is a more accurate gauge of a protocol’s intrinsic value than market value.
The goal of The Web3 Index is to educate and inform a wide range of audiences: from developers interested in finding reliable infrastructure services to prospective node operators who want to earn fees while contributing to a more equitable world wide web.
But this is just the start. The plan is to broaden The Web3 Index until it is representative of the entire web3 landscape, from infrastructure protocols to the consumer-facing decentralized applications that build upon them. Examples of applications gaining traction today range from user-owned blogging platforms such as Mirror, to user-owned video creator platforms such as Glass.
The Promise of Web3
The promise of web3 is hard to overstate. Verifiable blockchain-based information decentralizes power, ownership, decision making, and resources. It unlocks token-coordinated networks and user-owned content enabling better aligned economic relationships between those who create content and services, those who consume them, and the networks that provide access to them.
While web3 has made huge strides, we’re still at the very beginning of its emergence. There’s a lot of work to do and there’s no better time to get involved.
Adam Soffer is the Creator of The Web3 Index. He currently works as the Product Engineering Lead at decentralized video streaming network Livepeer.