In this lesson, we'll review the original promise of the Internet, the Internet of information. We'll look at how it's fallen short of that promise in several important ways. How many of you were even born when the Internet went commercial in the early 1990s? Back then, we all thought the Internet would level the playing field. Everyone could participate in the global economy. That was the promise. The Internet would blow up the industrial paradigm where power structures were centralized, hard to break and even harder to change. For starters, many of us hope for a more democratized media. "Old media" as we called it, was centralized. A one-way channel, and controlled by oligarchs. Its users were passive with no control. The barriers to entry were high. The Internet came along and entrepreneurs re-imagine media as open distributed and peer to peer. The global economy was also intended to be more inclusive. Low-cost computing and connectivity would allow everyone everywhere to be a consumer and a producer of content and services. These global marketplaces were to be meritocracies, where everyone could participate. If you were smart and hardworking, in say India, your merit would bring you reputation. The world would be flatter, fair, more flexible, and more fluid. Most important, technology would bring wealth to everyone not just the few. But does that sound like what's happening in our world today? Some of it has come to pass. The first four decades of the Internet have been great, for reducing the costs of searching and collaborating and exchanging information. The Internet has also lowered the barriers to entry for many new media and entertainment. New forms of retailing and organizing work and new digital ventures. Outsourcing has helped people in the developing world to join the global economy. But the Internet still has serious limitations. For one, we still need intermediaries like banks and government agencies to establish our identities and to enable us to exchange value like money online. The same go-betweens collect our data for commercial gain, and for national security. Plus, their cost structure excludes some 2.5 billion people from the global financial system, and they've grown more powerful overall, not less. So, the Internet has trouble preserving our privacy, establishing our identities, and then including all of us. So, what happened? Well, it's all about the centralization of control. Huge institutions now control what was supposed to be a shared global resource: The Internet. These companies maintain its infrastructure and they extract a massive amount of data from us users. They write the algorithms in the apps, managing business and managing our daily lives. They're using their power and influence over entire economies in society. Many of the early concerns raised by the early Internet pioneers have come true. Gross domestic product is growing but job growth is pretty much flat. We're creating more wealth, but we're also seeing greater social inequality. Powerful tech companies have shifted from the open equal Web to exclusive walled gardens. They don't just exclude people from the conversation, they sometimes kill the debate altogether. Corporate forces have seized many of these powerful peer to peer technologies, and they're not leveling the economic playing field. They're creating a big obstacle course instead. The institutional control of our data threatens our privacy. Yes, governments of all kinds use the Internet to improve their operations and services. They also use it in quite alarming ways. Even democratic governments use it to spy on citizens, harass dissenters and stay in power. They can learn almost everything about us from a handful of companies, not to mention what the companies themselves can learn or what any bad actors can learn by hacking into these systems. So, that brings us to the issue of security. Technology doesn't create prosperity anymore than it destroys privacy. But technology is at the heart of just about everything good and bad in this digital age. The growth of online commerce creates more opportunities for cyber crime. Moore's Law, the doubling of processing power every year, also, doubles the power of fraud and fraudsters and thieves. Let's call them, "Moore's Outlaws" not to mention spammers, phishers, data kidnappers and cyberbullies. When it comes to establishing identity, we still don't know if we're dealing with a bot or a person, or for that matter, as the famous cartoon says, if you're dealing with a dog. Yet, we sure do leave a big data trail behind us online. Powerful what we call digital conglomerates, like Alphabet, Amazon, and Apple, were once Internet startups. Now they are some of the largest companies in the world. They create amazing value for us and most people love them. But they're also capturing troves of data. They can create value for themselves. Netflix is more likely to recommend a movie you'll enjoy, and that's great. But it also makes data, this new asset class and one we really should be controlling. We should be deciding who gets what data, for what use, and under what terms. There's got to be new approaches where we can access and even own our own data, use it to plan our lives, and even generate income for us. Oh, and also to protect our privacy. Finally, there's the problem of exclusion. Now, this isn't just a problem of online participation although it is true that 45 percent of people on this planet don't yet have Internet access. Those living under repressive governments have very restricted access, and two billion people can't afford a bank account. How will the second era of the Internet help them? We'll answer that question in our next lesson beginning with something we call the Trust Protocol.
