The promise of Web 3.0

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Web 3.0 is an attempt to remove the centralisation of domain name registries and the hegemony of the Internet Corporation for Assigned Names and Numbers (ICANN). (File)

By Siddharth Pai

Silicon Valley entrepreneurs have created a new frontier called Web 3.0, whose claim that they will ‘democratise’ the internet by providing decentralised recognition of web page addresses (domain names). It seems the view I have expressed before about the need for a global body like the UN to monitor and manage both the security as well as the equitable distribution of technology has more takers than I first thought.

Web 3.0 is an attempt to remove the centralisation of domain name registries and the hegemony of the Internet Corporation for Assigned Names and Numbers (ICANN). It relies on blockchain technology to accomplish this.

One of the firms now doing so is called Unstoppable Domains Inc. and relies on the Ethereum blockchain to mint web domains that are created and managed solely by their owners—that is, people like you and me.

To understand why this is important, one needs to know how the internet is controlled today. Domain name services or DNS companies form the backbone of present-day internet since they provide an integral tool to internet users, which translates simple English-based commands like “financialexpress.com” typed into a browser to the actual numeric addresses that the internet’s computers use to identify each website. Users can’t remember a string of numbers like 192.26.32.40 for each website—all they want to do is type in the name that they are familiar with. These DNS firms act much like automated phone directories so that this can be accomplished.

Who is it that controls all domain names? The US gave up its hegemony over the Internet just a few years ago to ICANN, a not-for-profit (but still US-based) group. ICANN manages the master keys for the DNS backbone of the Internet.

There are only seven individuals from all over the globe who hold the master keys to the Internet—the DNS registry—and a further seven individuals as back-up. These 14 individuals have been chosen carefully to make sure that no one country is over-represented in this set-up.

Each of these 14 keys are actually physical metal keys to safety deposit boxes, which in turn carry smartcards. These activate a machine that creates a new master key for the Internet. ICANN holds highly secure meetings every quarter, during which it conducts an elaborate ceremony called the “Root Signing Ceremony” that can quite literally form the stuff that spy movies are made of, with windowless rooms and steel doors that require biometric scans, PIN codes and smartcards to open.

During these ceremonies, the master key that was in existence for the past three months is scrapped, and a new cryptographic key is generated by a single high-security computer, then uploaded to servers like the ones owned by DNS companies, dictating who owns .com, .net, .org and others.

No, this is not straight from a James Bond movie. This is how the internet works. One can’t even begin to fathom what might happen if one of these ‘ceremonies’ was somehow compromised, and the master key came into the hands of criminals or terrorists. A recent attack mainly affected Dyn, which is only one of the companies that controls domain names—there are several others like it. Control over the master key would of course mean that all those firms that provide domain name services could be compromised, thereby annihilating the internet as we know it.

No one really knows who put ICANN in charge. Some claim that it’s the ‘online community’ while most others realize that it could only have been the US agency that was originally entrusted with this responsibility. Many countries, such as Brazil, Russia and the EU have questioned this and have suggested that it be put under the auspices of the UN.

Unstoppable Domains Inc. relies on the blockchain. Since the latter is a peer-to-peer network which does not need a central body to verify (or issue) domain names, Unstoppable Domains says it is transferring control back to the users.

Web3’s supporters say it will spawn a decentralised version of the internet where platforms and apps are built and owned by users. Unlike Web2.0  (the current web), which is dominated by centralised platforms such as Google, Apple, and Facebook, Web3.0 will use blockchain, crypto, and NFTs to transfer power back to the “aam janta” or common man of the internet community, and of course to trade in crypto assets.

The impact of this could be far reaching and upend the internet as we know it. I for one support it, and hope that Web 3.0 will take hold soon.

Unsurprisingly, there are others who don’t share my views. These detractors say that all Web 3.0 is going to do is to move control of the internet from today’s behemoths such as Facebook and Google over to another set of behemoths. And of course, that today’s behemoths will morph themselves enough to also dominate Web 3.0.

They quote studies (by the Financial Times and others) that show that today’s blockchain, NFT, and crypto market are already controlled by only very few firms/individuals. For instance, 9% of accounts control over 80% of the Ethereum cryptocurrency which in total is now valued at more than US$40 billion.

Similarly, the top 2% of accounts own and control 95% of the $800 billion supply of Bitcoin, and that 0.1% of Bitcoin miners are responsible for all new Bitcoin output.

Let us see how this space plays out, but we need to be extremely watchful of this new Web 3.0 space—whether its promised ‘democracy’ for the internet comes to pass or whether all we are seeing is a recentralisation of value in the hands of a few.

By invitation; The writer is technology consultant and venture capitalist.