Web3 aims to overhaul the internet as the world knows it today. Decentralization is its key goal, removing unnecessary intermediaries—like big companies that store users' data or banks that serve as middlemen in financial transactions—and instead letting users control their own data and interactions, leading to a faster and more direct online experience.
But Web3 is about more than just making the internet quicker and easier. It's about rebuilding the digital trust that's been lost in recent years, restoring user confidence in the wake of seemingly endless data breaches, privacy invasions, and manipulative practices by large corporations.
For 23-year-old Web3 venture capitalist Mads Pedersen, this means investing in innovative tech founders who prioritize decentralization and ethical considerations like transparency and user privacy. This way, users can have a safer online experience without sacrificing their digital freedoms.
This is how Pedersen's approach to Web3 venture capitalism might help to rebuild trust in our digital transactions.
The Limitations of Web2
Web2, the current iteration of the internet, prioritizes user-generated content, interactivity, and social connections to create a more engaging online experience for everyone. Unlike the earlier version of the web, Web1, which was mostly about reading static pages, Web2 lets users interact with sites, build their own content, and connect with others on social media, blogs, and e-commerce platforms.
However, these innovations have come at a significant cost to user privacy and freedom. For example, much of the internet is controlled by a handful of centralized entities, with Facebook, Amazon, Google, Apple, Netflix, and Microsoft being responsible for nearly half of all Web2 traffic. And the unfortunate truth is that these companies are first and foremost focused on maximizing profits.
But prioritizing profits comes at the cost of user trust. All of this user data is stored on central servers for monetization, data analytics, and even the training of AI tools. If these servers get hacked, personal information can be stolen by cybercriminals. Even if security is tight, these companies often sell user data to third parties without explicit consent anyway, often leading to privacy breaches and misuse of personal information.
This has led to user trust being at an all-time low, with 77% of consumers saying they are "somewhat or very concerned" about the privacy and security of their data.
In response, tech innovators are turning to decentralized technology like blockchain to provide users with more secure and transparent digital experiences. These inventions aim to restore user trust in online interactions by bringing about a paradigm known as Web3.
How Web3 Can Achieve Digital Sovereignty
Web3 is the next planned evolution of the internet, focusing on decentralization and user ownership of digital assets. This is made possible by blockchain technology, which is essentially a collectively owned ledger that is impossible to edit—providing crystal-clear transparency and near-unhackable security. So unlike Web2, which relies on centralized platforms like Google and Facebook to store and control user data, Web3 lets users own and control their digital assets and identities through decentralized networks.
Web3 also brings new ways to interact and exchange value. For instance, decentralized finance (DeFi) apps allow peer-to-peer lending, which means users can make transactions directly with each other without going through the slow and expensive route provided by traditional banks.
For Mads Pedersen, Web3 venture capitalist and incoming Investment Partner at Figment Capital, these tools rebuild users' trust in digital transactions by granting them digital rights. "Our digital rights and freedoms," Pedersen explains, "must mirror (and ideally improve on) those we enjoy in the physical world."
This is in stark contrast to the current reality of Web2, in which Pedersen argues user data is treated as property to be bought and sold. This has essentially created a form of digital dictatorship and has robbed users of their rights to privacy, transparency, and ownership of their data.
While some have accepted Web2 as an unfortunate reality, others are taking action and furthering Web3 technology, hoping to usher in an age of user privacy and rebuild the world's trust in the digital ecosystem. Pedersen is taking an active role in this restructuring by investing in Web3 startups and funding their work.
Rebuilding Trust with Ethical Web3 Venture Capitalism
As a global citizen, Pedersen spent his formative years living under the corrupt Malaysian government, witnessing economic stability in Portugal, and watching his family suffer significant losses during the 2008 financial crisis. He didn't realize it at the time, but the common factor in these experiences was an opaque, centralized authority that held inordinate amounts of power over the people. It's no wonder, then, that he's come to value the principles of Web3 so highly.
It's why he's dedicated his career to investing in startups that leverage Web3 to rebuild user trust. "I want to support and invest in groundbreaking innovators who are developing transformative technologies within the Web3 ecosystem," he says, "from foundational infrastructure to cutting-edge consumer applications."
However, Pedersen's role as a Web3 venture capitalist is more than just contributing money. He also wants to make sure that founders don't forget why they're building the next generation of the internet—after all, it's easy for them to take shortcuts and become overly focused on profits. That's why Pedersen spends a lot of his time encouraging founders to slow down and prioritize broader goals.
"I know we're all here to make money," he says, "but our collective goals should always be transparency, equal access, and expanding the benefits of cryptocurrency and blockchain technologies."
While he's not actively investing in the future of the internet, you might find Pedersen publishing research articles, judging hackathons, and speaking at conferences—educating tomorrow's innovators to keep the Web3 dream alive and finally bring about a transparent digital ecosystem.
Investing in Tomorrow's Internet with Mads Pedersen
While today's internet is rife with massive corporations controlling private data, limiting digital sovereignty, and eroding user trust, crypto venture capitalist Mads Pedersen is making sure that won't be the case for tomorrow's internet.
How? By investing in ethically minded tech founders who prioritize decentralization and user privacy to create a trustworthy digital world that works for everyone—regardless of age, background, or financial status.
Curious about Mads Pedersen's vision for a decentralized web? Find him on LinkedIn or check out Figment Capital for more information.
