How Could Web3’s Decentralization Impact Algorithms?

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While the introduction of cryptocurrency back in 2008 was revolutionary, it wasn’t the concept of cryptocurrency itself that was truly groundbreaking – it was the network that cryptocurrency operates on.

The blockchain network which hosted Bitcoin – and now hosts thousands of other altcoins – was our first taste of the future of the internet.

Web3 has been a part of the online conversation for a while now. Designed to be entirely decentralised, this is the internet’s ‘next phase’ which is due to take over from Web2, the current version of the web that we all operate on today.

While Web2 is characterised by user-generated content, it is controlled by centralised services like Google, Amazon, Facebook, and countless other organisations that retrieve data and use it to power their algorithms. To protect personal data, it is up to you as an individual to remove your information from the internet or risk padding the bottom lines of these centralised services, and data brokers.

As a concept, however, Web3 could put an end to that, creating a decentralised internet that is reliant on nodes to store and process data, eradicating the various means of data collection that big data companies are currently profiting from.

The Problem With Web2

To understand how decentralisation will stop data collection – and subsequently impact existing algorithms – it’s first important to elaborate on the problem that exists with Web2 today.

In 2023, any user operating on the web is leaving what is known as a digital footprint. This is a trace of data – including internet searches, individual profiles, email addresses, phone numbers, and personal addresses – that can be utilised by data brokers and sold onto third parties, subsequently putting that data at risk.

Over the last few years, a significant number of data breaches have led to cases of identity theft, discrimination, and reputational damage, with some of the most publicised being the Yahoo data breaches, the Activision cyberattack, and the Equifax hack.

While new regulations such as GDPR and CCPA have imposed strict data protection requirements on these organisations, they still need to collect the data to power their algorithms.

The Netflix algorithm suggests content to users based on user data. The Google algorithm sorts and personalises results based on user data. The Amazon algorithm pushes certain products to the homepage based on user data. Everything is derived from big data that favours the business over the consumer.

How Could Web3’s Decentralisation Change Things?

In its nature, Web3 would completely shake up the internet that we recognise today. Combining the decentralisation of Web1 and the user-orientated Web2, blockchain technology will give users complete control over their online experience, containing a distributed network of nodes to form a self-governed database.

To give an example, if a user is to log into Facebook today, they would immediately leave a trail of data that can be monetised by the centralised owners. Similarly, access to that website must be obtained through logging in, sharing, and interacting with content.

In the Web3 landscape, however, this kind of control will be given to the community, allowing them to self-govern decentralised websites. As a result, internet users will be less like data producers, and more like data owners, all of whom receive incentives to participate with their data rather than passively handing it over.

What is the Impact on Algorithms?

Algorithms such as Google’s, Amazon’s, and Facebook’s will therefore be impacted. Algorithms work by taking input data, processing that data, and then producing an output – for example, Google will process a user’s browsing history, what they like, what they share, and then use that data to determine what they want to see.

Rather than owning user data, the user data would be owned and controlled by the user with a private key, cutting many organisations off at the source. It’s hard to say whether these algorithms – or organisations for that matter – will become obsolete, but their Web2 methods of centralised data collection and utilisation will certainly have to change.

If it comes to fruition, Web3 would create an internet of security, safety, and privacy, with big data companies unable to function under their existing data-based algorithms. But this is a long way off in the future.

At the moment, the idea of a worldwide Web3 remains just a concept, with the cryptocurrency blockchain providing just a hint of what it could be like – on a small scale, blockchain technology is usable and clearly advantageous, but the cost, hardware, regulation and scalability needed to implicate it fully remains difficult to visualise.

For now, it is important that users continue the fight to reclaim control of their data, while new data protection laws and regulations advance to keep up with updating big data technologies. The future of decentralisation might be bright, but for now, centralisation is sticking around.