Sounds as if the internet was initially developed with funding from the United States Department of Defense through a project called ARPANET.

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Yeah, that's right for the core network setup (TCP/IP) and some basic services such as email, FTP, and Telnet. But the World Wide Web was actually developed at CERN in Switzerland.

Is that like Web 1?

Things that were I think were non-encrypted like HTTP?

Yes, Berners-Lee invented HTTP und HTML at CERN.

Nice.

Online payments didn't really happen until HTTPS or I believe Web 2.0.