Every few decades, a new technology emerges that rewires the economic power grid and the old order of human affairs. We saw it most recently with the internet. Before that, it was the transistor, the radio, electricity, the steam engine, and the printing press. Today, several revolutionary technologies are emerging all at once: artificial intelligence, the Internet of Things, biotechnology, virtual and augmented reality, robotics, and blockchain.
All of these are not separate but related. The Web is entering a new era and with it, bringing a new internet and a new platform for the other technologies of a new digital age. This is Web3.
Understanding the Potential of a New Internet
In much the same way as the term “Internet” has expanded from its original inter-networking technical definition to describe an era that includes many technologies, business models, and social behaviours, so too is the term Web3 evolving to describe an era that is composed of a group of technologies and behaviours. The core technologies that will shape the Web3 era include blockchain, AI, IoT, and extended reality (XR) user experiences. These technologies and the new business configurations and social behaviours that emerge because of them will define our next era.
“Web3 empowers individuals by granting them ownership over their digital lives. It leverages ground-breaking technologies like blockchain to help users regain control.”
To understand Web3, we must know what came before. The Dot-com era, known as Web1, was basically a platform for the presentation of information on websites. Then came Web2, which introduced mobility, collaborative apps, and a more interactive online experience. While the shift to Web2 allowed us to engage more actively with online content and build a sense of community on the Internet, turning everyone into publishers (and not just consumers) of information, there were also unintended consequences. Tech giants, in their pursuit of profit, began amassing and exerting control over our personal data. Not only did this raise privacy concerns, but these powerful companies started enacting tolls and stifling innovation online, exerting an influence that extended well beyond commerce to democracy, media, and more.
Enter Web3 – the next era of the Internet. Web3 empowers individuals by granting them ownership over their digital lives. It leverages ground-breaking technologies like blockchain to help users regain control over their content, money, identities, and more. Rather than all the value of our digital age accruing to a handful of wealthy platforms, Web3 offers everyone a stake in the digital economy. Web3 turns internet users into internet owners.
“Web3 equips us with a more powerful toolset to earn money, own assets, and build wealth on a globally level playing field, decentralizing power and influence in the process.”
If Web1 and Web2 democratized access to information and made it easier to meet and collaborate online, Web3 equips us with a more powerful toolset to earn money, own assets, and build wealth on a globally level playing field, decentralizing power and influence in the process. If the spread of technology truly makes the world “flatter,” then Web3 will be a steamroller.
Where Will Web3 Be Built?
In my new book, Web3: Charting the Internet’s Next Economic and Cultural Frontier, I write that Silicon Valley was once called a tech Galápagos1 for the unique blend of talent, money, technology, culture, and government research and development that led to the diverse species of tech entrepreneurs who went on to found today’s mammoth Internet companies. The World Wide Web was invented by English computer scientist Sir Tim Berners-Lee in Switzerland, but it was commercialized in America. This time, things are different.
The internet’s next era is emerging at a time when technology tools and human capital are more distributed than ever. In 1993, as the Web’s early pioneers were forging the first frontier online, half the world had never placed a phone call. Now, more than two out of every three people on Earth has a smartphone connected to the Internet.
The Silicon Valley of The Future
Canadian policymakers often tout that Toronto, or Waterloo or perhaps Vancouver will become the Silicon Valley of the Future, with the right mix of government support and animal spirits. But the reality is different. The Silicon Valley of the future won’t be a place, per se; it will be a globally distributed online frontier where people, organizations, and companies compete fiercely for capital, talent and influence.
“The Silicon Valley of the future won’t be a place, per se; it will be a globally distributed online frontier where people, organizations, and companies compete fiercely for capital, talent and influence.”
Web3 is not just an incremental update to the internet – it represents a fundamental shift in how we interact with the digital world and exchange value online. Unlike its predecessors, Web3 thrives on the distributed nature of technology, capital, and human potential. As the digital age matures, Web3 is a revolution unfolding in real-time, and its impact will be felt worldwide.
Web3 is globally distributed. In Istanbul, many citizens prefer to transact and store value in digital currencies rather than fiat money. In Singapore, the beachhead of Asia’s burgeoning Web3 industry, the government has a mandate to attract entrepreneurs in blockchain, AI, and other technologies. In Thailand, internet users are experimenting with Web3’s toolset to bootstrap new jobs online. More people own NFTs in Thailand than in the United States. Dubai has made Web3 the lynchpin of a broader plan to attract global talent and capital. In the UK, Prime Minister Rishi Sunak said he wants to make the country a global leader in Web3.
So, where does Canada fit into this evolving narrative? Right now, we have ceded our lead in Web3. But we can get it back.
How Canada Can Lead in Web3
Canada, with its rich pool of talent, inclusive society, global reach, and high quality of life, should be poised to play a pivotal role in the Web3 era. But that alone will not guarantee us success.
1. Prioritize developing Web3 skills for our talent
The digital age demands a workforce with diverse skill sets, so Canada must prepare our brightest young people. Canada should prioritize education in Web3 technologies, covering technical, business, and legal aspects. This effort is already underway. York University and George Brown College offer certificate programs in blockchain and Web3, and the Blockchain Research Institute has delivered award-winning Web3 courses to businesses, governments, and students around the world. By equipping Canadians with Web3 skills, we can remain competitive on the global stage.
“If Ethereum, the most valuable start-up to emerge from Canada with a market value today of about $200 billion, had stuck to its Canadian roots instead of decamping for Switzerland in 2016, it would have created an innovation dividend that is hard to calculate.”
2. Uplift Web3 entrepreneurship and create an environment of innovation
We must nurture entrepreneurship and foster a spirit of risk-taking. To support Web3 startups and entrepreneurs, Canada should provide incentives, grants, and funding opportunities tailored to the Web3 sector. Above all, we need to create conditions that encourage founders and builders to want to create in Canada. Canadian businesses need clear rules of the road in order to invest for the future. The cost of inaction can be big: If Ethereum, the most valuable start-up to emerge from Canada with a market value today of about $200 billion, had stuck to its Canadian roots instead of decamping for Switzerland in 2016, it would have created an innovation dividend that is hard to calculate. Let’s not make the same mistake when the next Ethereum gets invented.
3. Embrace the Web3 future
Web3 has immense potential but also its fair share of risks. After all, it is an emerging and ever-changing frontier. Governments and companies alone cannot bring Canada into the Web3 era. Indeed, the most bountiful of frontiers in history have often been pushed by everyday people, or at least the ones brave enough or driven by circumstances to pack up their belongings and hit the trail. As with prior eras of the Internet, Web3 will become an integral technology for businesses. The existing companies that harness this technology will not only survive but thrive in this next era. Savvy entrepreneurs and executives have always been able to spot what’s just over the horizon: Cornelius Vanderbilt built his fortune on steamships but divested of those assets when he saw that railways were opening up America’s bountiful frontier. He traded legacy technology for something better. In business, as in politics and life, history does not repeat, but it often rhymes.
But there is also a big role for our government and regulators to help create the conditions for sustainable settlement and development. Frontiers attract brilliant businesspeople and pioneers, but they also draw in outcasts, criminals, and hustlers. All frontiers present their share of risks and rewards. However, unlike the frontiers of old, the web’s next economic and cultural frontier is boundless and potentially infinite. Let’s push it forward responsibly, together.
1. Margaret O’Mara, The Code: Silicon Valley and the Remaking of America (New York: Penguin Books, 2019).
Alex Tapscott’s latest book, Web3: Charting the Internet’s Next Economic and Cultural Frontier (Harper Collins), is out now.