Announcing Web5: Will it change the course of Bitcoin’s Future?
In the wake of the continuing abysmal crypto market news, one of Bitcoin’s biggest supporters threw out a lifeline this week. Whether or not it pulls the world’s first cryptocurrency out of the churning digital currency waters remains to be seen.
That’s what happened on Friday when Jack Dorsey, CEO of Block (SQ), announced Web 5, a new protocol designed to put control back where it belongs – with Bitcoin holders.
“Identity and personal data have become the property of third parties,” explained TBD, a subsidiary of Block, in a statement to CoinDesk. “Web 5 brings decentralized identity and data storage to individuals’ applications. It lets devs focus on creating delightful user experiences, while returning ownership of data and identity to individuals.”
Dorsey made the announcement at Consensus 2022, a widely attended event hosted by CoinDesk in Austin, Texas. Dorsey was among the lineup of hundreds of speakers who came out for the annual event, which is a love fest for the crypto world.
“This will likely be our most important contribution to the internet,” Dorsey tweeted. “Proud of the team.”
The actual nuts and bolts of the new platform are outlined in a presentation created by Block’s TBD unit, which leaned way back to the days of the IBM computer to create a pitch deck that looks more like the 70s versus the 2020s.
The presentation focuses on the word “decentralized.”
“Web5 is a Decentralized Web Platform that enables developers to leverage Decentralized Identifiers, Verifiable Credentials, and Decentralized Web Nodes to write Decentralized Web Apps, returning ownership and control over identity and data to individuals,” it says.
The emphasis on “decentralized” points to Dorsey’s criticism of the earlier iterations of the internet, which he views as falling into the hands of powerful entities, versus remaining true to the premise of the web being a great equalizer.
“Jack Dorsey’s beef with Web 3 has never been a secret,” CoinDesk reports. “In his view, Web 3 – blockchain boosters’ dream of a censorship resistant, privacy-focused internet of the future – has become just as problematic as the Web 2 which preceded it.”
CoinDesk puts it this way: Dorsey believes Web3 “has the right intentions but is using the wrong tools.”
At the core of Web 5 is Dorsey’s staunch belief in Bitcoin and its blockchain.
“Whereas Web3 incorporates blockchain technology and tokenization to decentralize the internet, Web5 is being envisioned as an identity-based system that only utilizes one blockchain: Bitcoin,” Coin Telegraph reports.
Dorsey is known to be bullish on the Bitcoin blockchain, as he stated in 2021, when he stepped down as Twitter CEO that he planned to focus his energies on Square and Bitcoin. In fact, at that time, he may already have been working on Web 5.
“Square said in July it was creating a new business dedicated to building decentralized finance (DeFi) applications for bitcoin, which Dorsey described as “an open developer platform with the sole goal of making it easy to create non-custodial, permissionless, and decentralized financial services,” CNBC reported in November 2021.
Dorsey has consistently voiced his belief that Web 3 was not decentralized.
“You don’t own “web3,” he tweeted in December. “The VCs and their LPs do. It will never escape their incentives. It’s ultimately a centralized entity with a different label. Know what you’re getting into…”
With Web 5, users will have control of their identity and use technologies that will allow them to manage their personal information as they see fit. Decentralized Identifiers (DIDs) and Decentralized Web Nodes are key to the process.
“Many activities in our world require the establishment of trust between participants,” the presentation states. “DIDs + DWEb nodes allow individuals, organizations, and companies to publish credentials anyone can discover and independently verify.”
Of course, an announcement of a totally new Web designed solely on Bitcoin needs time to be digested. Will Web 5 live alongside Web 3? Is Web 5 meant eventually to replace Web 3? How will it all shake out?
For the time being, these questions remain unanswered.
But one thing remains clear: the price of Bitcoin did not move on Dorsey’s announcement as the coin continues to hover under $30,000. In the tumultuous roil of the markets, inflation in the U.S., and the war in Ukraine, even a lifeline like Dorsey’s may go unheeded. For now.
Joyce Pavia Hanson