Crypto billionaire and mogul Jack Dorsey has announced his plan for a new “Web 5” architecture that would outshine Web 3.

Dorsey is the CEO and founder of the digital payments firm Block (SQ). At the CoinDesk Consensus Festival being held in Austin, Texas this weekend, Bitcoin focussed Block subsidiary TBD announced a new vision for a decentralized internet layer – naming it Web 5.

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What is Web 5?

So, what would Web 5 look like? TBD explained that there would be a much larger focus on identity and personal data, which has become concentrated at the hands of third parties over the last decade. Web 5 would bring decentralized identity to individual data storage to enhance user experiences. This means that users would be able to interact with each other online without the need for any central government or service. The monetary layer will be built using the foundation of Bitcoin – Dorsey is an outspoken advocate of BTC and its utility in the payments sector.

The main problem that the TBD outline with existing Web 3 architecture is the fact that it’s not truly decentralized. Dorsey mentioned in a recent tweet “You don’t own Web 3… the VCs and LPs do. It will never escape their incentives. It’s ultimately a centralized entity with a different label”. This seems to undermine the very reason that Web 3 for engineers – to bring decentralization to the internet. Web 5 – a combination of Web 2 and Web 3 – would allow for complete decentralization and ownership of user data by users themselves. While this idea sounds appealing to any DeFi onlooker, there were no clear development plans from TBD and no release date announced.

What is Web 3?

Broadly, Web 3 is an idea for a new iteration of the Internet, based on incorporating blockchain technology and decentralized finance. This contrasts with Web 2 (the current model) where users’ data and content are centralized in a small group of companies that sell data to third parties. The term Web 3 dates back to 2014, being coined by Ethereum co-founder Gavin Wood. The framework should provide enhanced stability, privacy, and scalability for users and poses a direct threat to the influence of ‘big tech’ over the internet and its data.

The phrase gained momentum in 2021, when NFTs, the Metaverse, and other decentralized entities began to soar in value, attracting attention from onlookers. If Web 3 comes to fruition, the crypto industry will likely experience a boom, as it will become the leading payment architecture for the Internet. This is a key reason why many analysts remain bullish on Bitcoin and Ethereum even in today’s bearish market.

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