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Web3, blocksplained

Author

Listed:
  • Sabina Marchetti

    (Bank of Italy)

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.

Suggested Citation

  • Sabina Marchetti, 2022. "Web3, blocksplained," Questioni di Economia e Finanza (Occasional Papers) 717, Bank of Italy, Economic Research and International Relations Area.
    • Handle: RePEc:bdi:opques:qef_717_22
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    File URL: https://www.bancaditalia.it/pubblicazioni/qef/2022-0717/QEF_717.pdf
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    More about this item

    Keywords

    internet; blockchain; distributed ledger technology; ownership economy;
    All these keywords.

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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