2023: The year Web2 became Web3

Goodbye Google (and 8,000 altcoins). Hello Web3 and power to the people time. The internet realizes it’s original distributed dream as we create another $100 trillion in global wealth along the way.

A kaleidoscopic mural that served as a gathering spot for protesters during the Occupy L.A. demonstrations in the center of City Hall Park. The mural depicts the Federal Reserve as a monstrous octopus, ravenously grabbing cash from foreclosed homes, which has a poetic connection to the creation of Bitcoin which was also a rebellion against Central Banks. An unknown artist painted it in 2011 on a large plywood structure, which is now being preserved by the City of Los Angeles.

A multi-trillion dollar entrepreneurial opportunity

Our definition of Web3 refers to the transition of the web from a cloud computing-based, centralized platform to a decentralized internet driven by edge computing, blockchain dApps, cryptocurrencies, NFTs, artificial intelligence, and metaverse and virtual reality technologies. Decentralized applications empower users with what we all want most in life: autonomy, security, and privacy. Web3 aims to fulfill the original vision for the web — a decentralized, trustless, permissionless world where we control our data and interact peer-to-peer and peer-to-merchant, without the need for centralized powers who control our data and online activities.

“The decentralized future is not just about creating new applications; it’s about rethinking how we organize society. You shouldn’t have to trust any organization in order to participate in the system.”

— Vitalik Buterin, Computer Programmer & Founder of Ethereum

In stark contrast to the centrally controlled cloud-computing approach, Web3 seamlessly transfers data across decentralized blockchain apps (dAps) with distributed ownership and control. This allows direct, peer-to-peer interaction without intermediaries and with no single point of network failure or attack.

Our trust in all centralized agencies including Congress, the IRS, educational institutions, Wall Street, and the legacy media and entertainment industries — has plummeted. We are facing a global institutional trust crisis. Young people are leading us to take back our power and deflect unnecessary intermediator fees. This rebellion has inspired a new generation of blockchain, dApp, artificial intelligence, and metaverse-focused technologies and companies. Web3 innovation will inevitably overwhelm and replace the cloud-computing paradigm with a smarter, more visual, decentralized, and distributed internet paradigm. The transition to Web3 means rewriting how we do almost everything, representing a societal change that puts individuals back in control. It also represents trillions of dollars in new entrepreneurial opportunities and billions in micro-payments, largely distributed to third-world citizens in need everywhere for authenticating transactions and blockchain dApp support.

The mistrust people have in institutions across government, legacy media, and big business represents a huge pain point that Web3 entrepreneurs have set out to relieve. The dApps they are creating are already redirecting all sorts of power away from these institutions to the individual.

“The root problem with conventional currency is all the trust that’s required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust.”

— ‘Satoshi Nakamoto,’ Creator, Bitcoin & Blockchain

Our fundamental view is that 90+ percent of the epic Web3 companies and tradable currencies of the future have yet to be created. The 20-year innovation boom will start accelerating in 2023 and will ultimately create yet another $100 trillion of NASDAQ and cryptocurrency wealth over the next 20 years. Eighty percent of this economic wealth will come from the equity appreciation of thousands of Web3 companies developing decentralized apps powered by AI and 20 percent from rising cryptocurrencies fueling the new ecosystem.

To present our case, we highlight below the current Web3 private company VC funding stats and provide an update on the three major Web3 sectors: AI, Blockchain, and Metaverse/VR. Then we discuss higher-level trends and other facts and anecdotes fresh off the streets of the global Silicon Vallely that underscore the level of Web3 creative destruction underway.

Web3 VC funding down but steady after 6-quarter ‘21 to Q2 ’22 boom