Web3, blocksplained

Sabina Marchetti

No 717, Questioni di Economia e Finanza (Occasional Papers) from Bank of Italy, Economic Research and International Relations Area

Abstract: ‘Web3’ is shorthand for decentralized internet applications built on blockchains. Based on distributed ledger technology, Web3 applications seamlessly encompass value tokenization (the basis of peer-to-peer payments and many other uses) and decentralized management of information, with great emphasis on their aspiration to re-shape the digital economy. To date, Web3 initiatives have been attracting sizeable resources from venture capital firms. Nevertheless, the technological limitations at the basis of decentralized applications prevent a full understanding of the effective potential of Web3. Our work provides an essential overview of the phenomenon, with a focus on the actual incentives it offers to different economic agents as well as to individuals. We pinpoint the key drivers that may contribute to the large-scale establishment of distributed ledger technology as the new paradigm underlying internet applications, and differentiate them from the hype put forward by the crypto-community.

Keywords: internet; blockchain; distributed ledger technology; ownership economy (search for similar items in EconPapers)
JEL-codes: O31 O33 (search for similar items in EconPapers)
Date: 2022-10
New Economics Papers: this item is included in nep-mfd and nep-pay
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Persistent link: https://EconPapers.repec.org/RePEc:bdi:opques:qef_717_22

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