Is Web3 cloud computing the future?

Understanding cloud computing

Cloud computing is known as a game changer for many businesses, organisations and individual users. It is based on virtualisation, where storage and servers are provided as a type of service over the internet.  

The ability of cloud computing to safely store and process broad amounts of data on remote servers enabled users to scale computing resources according to their needs without having to purchase more hardware infrastructure. 

Users can access their data and applications from anywhere in the world which reduces the need for physical storage and increases flexibility and a higher level of productivity. Data is stored remotely in the cloud and users can access it from any device that connects to the internet. 

For example, cloud services include storage, back-up and data retrieval, email, applications, data analytics, audio and video streaming and delivering software on demand. 

Cloud computing can be either public or private. Public cloud computing services provide these services over the internet for a certain fee while private cloud computing services only provide access to a determined number of people. There is also a hybrid cloud computing option which combines public and private cloud services.

What is the current state of cloud computing?

According to the 2023 Precedence Research, the global cloud computing market is valued at $500 billion with the expectation to grow at a Compound Annual Growth Rate of approximately 15% over the next couple of years. It is estimated that the cloud computing market size will be over $1 trillion by 2030. 

The development and adoption of cloud computing services has been exponential- with more businesses discovering the benefits of moving their data to the cloud, a broad number of legal entities, from start-ups and small companies to big multinational corporations, have decided to transfer their workloads to the cloud. 

The adoption was quite fast as it was driven by the addition of other technologies such as data analytics and artificial intelligence (AI), that rely on the scalability and computing power of cloud computing providers.

The main players in the cloud computing market include big tech companies such as IBM Cloud, Oracle Cloud, Amazon Web Services, Microsoft Azure and Google Cloud. 

Can Web3 improve cloud computing?

As mentioned above, cloud computing assumed a key role in contemporary business operations. The traditional model of cloud computing includes a centralised server that stores and processes data. The centralised model has certain limitations as it is susceptible to attacks, data breaches and failures of the system, along with the fact that it can sometimes be costly and inflexible. 

Thereby,the traditional model came with certain trade-offs such as renting cloud computing resources which had its outcome in a partial control over data and applications; security problems that can result in the breach of confidential data as well as network failures that can amount to service unavailability. 

To understand the concept of Web3, we suggest reading this article: ‘What is Web3?’, and finding out more about the evolution of the Internet. 

Web3 has the potential to boost cloud computing services and resolve the challenges of the traditional model, along with increasing adoption of blockchain technologies. The emergence of smart contracts has managed to transfer financial transactions to the decentralised space based on blockchain networks, but they lacked support for large-scale computations and did not manage to keep up with the rapid development of Web3 businesses. 

Linking Web3 and cloud computing services could have its outcome in decentralised cloud computing with targeted economic incentives. The decentralised Web needs cloud computing, but the main question is how Web3 is going to transform these services? 

From the point of view of an ordinary user, decentralised cloud computing services can provide more security, flexibility, and savings. In contrast to the traditional model, decentralised cloud computing is not based on a centralised server but distributed over a network of computers.  

Since it does not have a single point of failure, it provides constant availability and cost-saving benefits. Additionally, using a decentralised ledger means that data can be verified in a manner that is tamper-proof. 

Does Web3 equal decentralisation?

A decentralised system is typically praised due to attack resistance and fault tolerance as most decentralised network protocols rely on peer-to-peer (P2P) networks or distributed systems which helps in removing centralisation, censorship, and monopoly on the market. As an answer to the current state of the Web, which is highly centralised, the Web3 landscape emerged. 

The crypto world revolves around decentralisation. To understand why it is so important, check out this article: 'What is decentralisation & why is it important?'. 

While designing secure Web3 applications and protocols can be more difficult than creating its traditional counterparts since decentralisation requires storing data in a trustless manner, the need for security, privacy and robust performance is prevailing. 

If you wonder whether Web3 equals decentralisation, just take a look at the ethics governing the new Internet. It is all about decentralisation and creating a more accessible and fair space where users have control over their data and digital identities.  

A decentralised web does not exclude regulation- it is about finding the right balance between data integrity, privacy, and regulation as well as enhancing the concept of responsible innovation. 

The potential of Web3 cloud computing

You are thinking now whether Web3 cloud computing solutions could really take on the comfort of traditional cloud computing services provided by big tech companies? 

Decentralised cloud computing is still in its early days- Web3 developers still face challenges due to the on-chain data being slow and expensive, but technological developments in the future boost its development. 

Users that suspicious about losing the comfort of traditional services should be aware that the result of Web3 cloud services would mirror the structure of traditional cloud platforms such as Google Cloud, AWS or Azure, yet with the addition of a decentralised infrastructure and technologies such as Layer 2 solutions that do most of the heavy lifting.  

We have mentioned that decentralised cloud computing needs to encompass economic targets and efficiency. If you are interested in the economic effects of Layer 2 scaling solutions, why not read this article: ‘Explaining the economics of Ethereum Layer 2 solutions’. 

Therefore, turning on a new leaf could provide the best of both worlds- the comfort and reliability of traditional cloud computing services and the added security, privacy, and efficiency of the decentralised Internet.

How would Web3 cloud computing work?

To understand how a combination of Web3 and cloud computing services could work, it is important to understand the concept of Web3 storage and how it differs from the traditional centralised model. 

The implementation of decentralised technologies such as P2P networks and blockchain provides a novel approach to data storage distributed across a network of nodes instead of one central authority. This removes the need for trust in a central point of control and boosts data security and integrity. 

On the other hand, Web3 applications can face unpredictable outbreaks of users. Here is why cloud computing services are crucial to the Web3 environment- by providing on-demand scalability, Web3 developers can more easily adjust resources up or down based on demand. This makes sure that everything is going smoothly without the additional infrastructure costs. 

Main benefits of integrating cloud computing with Web3

As explained above, the integration of cloud computing within the Web3 ecosystem consists of multiple benefits linked to the essential elements of Web3, cloud services and blockchain technologies. However, one of the leading applications of Web3 cloud computing refers to storage solutions. 

Cloud storage solutions within the Web3 space are based on the implementation of cryptographic hashing and data sharding to distribute data across multiple network nodes which ensures that data remains tamper-proof. Data is available even if some nodes are offline which removes the reliance on a single point of failure. 

If users could be incentivised to contribute their storage space and computing power to the decentralised network, such a cloud storage could be both cost-efficient and more environmentally friendly. 

If you want to know why it is important to remove the notion of a single point of failure, we suggest reading our article on one of the biggest IT outages in history: ‘CrowdStrike is a reminder why Bitcoin’s decentralised network is Web3’s blueprint’. 

So how would users be incentivised to do that? As in other spheres of the crypto world, they would be awarded with tokens to do the exchange of storage, computing power, or bandwidth to the blockchain network. They could then trade these tokens or use other services and applications. The point is that it would be worth their while.

Are there any challenges?

Even though the combination of cloud computing services within the Web3 space brings to the table many advantages, there are also challenges that should be addressed.  

The first one is linked to the limited capacity and throughput of Web3 networks. When integrating cloud services, providers must consider the scalability of the underlying blockchain to make it work seamlessly. 

Secondly, cloud computing providers also need to consider the interoperability matter. Web3 is still in its infant stage as there are many protocols and platforms still under development. The providers of cloud services need to ensure the interoperability and compatibility with divergent Web3 networks for a smooth transfer of data. 

Despite the well-known fact how Web3 safeguards data and users’ privacy using blockchain technology, the providers of cloud services still need to take care and implement additional measures to safeguard sensitive personal data by utilising encryption techniques, auditing mechanisms and access controls.

A match made in Heaven?

The economic model tied to Web3 cloud computing services is based on an allocation of resources and the dependence on market dynamics to establish the value of computing power, bandwidth, and storage. This model is considered to incentivise users to contribute and promote free competition which would eventually lead to a more resilient infrastructure. 

The Web3 environment wants to create a trustless space where users can enjoy privacy, data integrity and accessibility. To scale the data, it needs cloud computing services, but with the addition of a network of nodes that would reduce the occurrence of scams, frauds and outages. 

Articles linked to crypto and Web3 topics typically involve a bunch of technical terms, and that is why we always point out the significance of education and doing your own research. If you are interested in learning more about crypto, look at our Learn Crypto Academy courses.