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The Decentralised Web and Its Impact on Advertising Explained

Tim Cross  07 January, 2021

Tim Berners-Lee, the creator of the World Wide Web, described the internet in its early days as the ‘read-only’ web. Using the internet meant navigating websites by clicking links to different pages, with each page remaining fairly static.

But over time the internet became more interactive, marking a new era for the World Wide Web, known as Web 2.0. Web pages became more dynamic, chat rooms and social media sites sprung up, and sharing economy apps created whole new industries.

However, there’s some debate about which trends and technologies will define the next era of the internet, Web 3.0. One of the prime contenders is ‘decentralisation’, a concept which is already seeing mainstream application through blockchain and cryptocurrencies. But how does a decentralised web look different from what we know today?

The Basics

At a basic level, decentralisation means that less of how we use the web is controlled by centralised operators.

It’s easiest to understand the concept with examples. A lot of online communication in the west runs through Facebook’s various properties – Facebook itself, Messenger, WhatsApp and Instagram. When people communicate through these apps and services, they’re not really communicating directly with each other. Instead, they’re each communicating with Facebook, which then passes on messages to other users.

In a decentralised world, communication services would operate without these centralised operators – users’ devices would instead communicate directly with each other.

As mentioned, we already see an example of this decentralisation in action with cryptocurrencies like bitcoin. Part of the idea behind these cryptocurrencies is that they’re not controlled by centralised institutions like banks. Instead, transactions are peer-to-peer, meaning they don’t run through an intermediary. And these transactions are recorded on a distributed ledger which is hosted on many networked computers, rather than one centralised source.

The Technical Details

A decentralised web would change the way that computers send and receive information, and communicate with each other.

In the centralised web, users’ devices primarily just request services from centralised servers, and as mentioned, interactions with other users are controlled by these centralised operators.

In the decentralised web, apps and services operate  in a way where users’ devices communicate directly with each other. So instead of just requesting services, users’ devices provide services too, which might otherwise be provided by a centralised operator.

Using the bitcoin example, the distributed ledger means that records of transactions are recorded and verified on a network of devices. So those devices are playing an active role in recording transactions, even when they’re not directly involved in those transactions.

This same logic could work for other use cases. A decentralised social network for example could see people’s content and data hosted on a network of devices (but encrypted and secured so that only those with the right permissions can actually access that data).

We’re already seeing scaled decentralised applications in the market. Graphite Docs, for example, is a decentralised equivalent of cloud-based word processing apps like Google Docs. But with Google Docs, data is sent to Google’s centralised servers where it is stored and sent out to those with the right permissions. Graphite Docs instead stores encrypted data on a network of computers, cutting out the need for an intermediary.

And companies are developing decentralised tools for digital advertising too. Decentralised Advertising is one such company, which is working to create decentralised alternatives to ad exchanges.

While most programmatic ads run through a small number of large ad exchanges, which control the flow of data and are fairly intransparent, Decentralised Advertising wants publishers to have their own decentralised ‘micro-exchanges’, which all communicate with each other in a network. Buyer would plug into this network, meaning they can still buy ads programmatically across a large number of publishers. But there’s no intermediary controlling this process.

The Pros and Cons

Proponents of the decentralised web say it will give users and publishers more control, privacy, and transparency.

Simon Critchley, Decentralised Advertising’s CEO says that decentralisation would give publishers more control over their programmatic sales, and more transparency over the flow of ad dollars from advertisers to their own pockets, since ad requests don’t have to pass through opaque exchanges. And if publishers have more control and transparency over how their ads are sold, they can pass on more detailed privacy controls to users – showing exactly which data has been used for ad targeting and which advertisers are bidding for ads.

These same privacy and control benefits would hold for other decentralised applications too. In a decentralised social network for example, users wouldn’t have to hand over their data to a massive tech company in exchange for using the platform. And there would be no individual ‘owner’ to dictate how users are able to communicate and interact, making censorship and restriction of information more difficult.

Of course, it’s debatable whether this lack of centralised control is always a good thing. Social media companies have been under pressure over the past few years to stem the spread of misinformation and hate. But a decentralised social network wouldn’t have a centralised body capable of stemming the spread of misinformation.

And decentralised services may find it hard to gain traction with consumers. With the emergence of Web 2.0, interactive web services took off because they provided a much better user experience.

But while decentralised services have benefits, they may be less obvious for consumers. People might like the idea of not handing their data over to Facebook and Google in theory, but will they actually stop using these companies’ products in practice? For example, DTube already provides a decentralised equivalent to YouTube – but it doesn’t look set to topple YouTube anytime soon.

That’s of course not to say that decentralised tools can’t take off – as proved by the popularity of bitcoin. But they may have to more clearly demonstrate their benefits to consumers in order to gain traction.

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