Web3 has the potential to disrupt pretty much everything we know about life online and who controls it. But as with any technology that’s rapidly evolving, it can be hard to separate the facts from the wishful thinking. So if you’ve struggled to get your head around the web3 hype – or wonder why web3 matters – this article is for you.
First up, what is web 3.0?
Web3 or web 3.0 is basically the next iteration of the Internet. It follows on from the previous two evolutionary phases of the Internet, i.e., web1 (or web 1.0), the birth of the internet we all know and love, and then web2 (aka web 2.0), the more interactive, user-generated, social media-driven web that exploded over the last decade.
Web3 represents the next big evolutionary leap forward of the Internet – a leap that’s driven by blockchain, NFTs, and cryptocurrency. But perhaps the biggest defining feature of web3 is decentralization, which brings us to our first reason why you should care about web3.
In the decentralized web3 era, internet users will have more control
That’s the idea, anyway. Because web3 represents a decentralized internet, as opposed to today’s highly centralized Internet. If you think about it, most of the sites we use today are owned by major corporations (like Meta, Google, and Amazon) and – to some extent – are controlled by government regulations. Power is centralized.
Web1 and web2 evolved this way because the infrastructure required to build and run the Internet is expensive, and someone has to pay for it! These powerful corporations earn back their investment (and, let’s be honest, a lot more on top) either by charging us to use their services or by harvesting and using (often selling) our extremely valuable personal data. Web3 and the decentralized internet promise to change all this, or at least ensure that centralization isn't the only way forward. How is this possible? Because web3 platforms are powered largely by token-based economics and blockchain-based infrastructures – where, typically, no one central authority is in charge, and users can transact and interact without third-party intervention.
A good example of the decentralized web comes from Secretum, a messaging app with the aim of becoming the web3 version of WhatsApp or WeChat. Secretum users can connect without an email address or phone number, which promotes user privacy, and there's a built-in trading function, allowing users to trade crypto and NFTs securely without the oversight of banks or other facilitators.
Web3 just might kick off a major power shift
Dwelling on this vision of a decentralized internet, where control is taken away from intermediaries and authorities and placed in the hands of users, it’s clear this represents a major power shift. With web3, we could freely access the Internet without forking over our personal information, have full ownership of our data, and not be dependent on centralized authorities who don't always have our best interests at heart. It's a rejection of how things are currently done. It’s a rallying cry of sorts.
The question is, will web3 actually end up reducing the huge amount of control that today’s power players have and make the Internet more democratic? Certainly, big tech giants, central banks, and governments have a vested interest in retaining some oversight – and of course, we all want the Internet to be a safe place and not the new Wild West.
Ultimately, I suspect organizations like Meta will evolve, and new organizations will arise to facilitate web3 interactions – for example, having a digital wallet that’s managed and protected by a third-party platform. That’s still some form of centralization, obviously. But I do believe web3 will offer us the chance to create a more equitable internet, where users have more choice and greater autonomy.
Web3 will underpin much of the metaverse
Web3 technologies are inherently linked with the development of the metaverse since they will allow us to interact and transact with others in metaverse environments. For example, NFTs and blockchain – both web3 technologies – will allow us to own and trade digital assets in the metaverse, whether it’s digital art, digital land, or digital sneakers. Cryptocurrency will most likely form the foundations of economic and monetary systems in the metaverse. And many of the virtual worlds that will ultimately form part of the metaverse (places like the Decentraland virtual world) are built on blockchain.
Basically, the metaverse can’t reach its full potential without web3 technologies. So when you hear people like me getting excited about the metaverse, know that web3 is a vital part of that future.
NFTs will have real-world uses
We’ve all seen the crazy price swings and headlines around the sale of NFTs. But if we think of NFTs as digital tokens that represent ownership of assets, it’s clear that NFTs can deliver much more value than just trading jpegs of cartoon animals.
In fact, many experts believe that “utility” NFTs will be used to represent ownership of real-world items and assets, such as tickets to events. Imagine the Burning Man festival decided to sell lifetime tickets, and you bought one of those tickets. Having it as an NFT is much easier and more secure than keeping a paper copy or an email confirmation in an account that you no longer use in 20 years’ time.
Blockchain will transform business operations
So far, we haven’t touched on the business impact of web3, but I believe this next evolution of the Internet will have a significant impact on how businesses operate. The most transformative web3 technology for businesses is undoubtedly blockchain. Indeed, I’m already seeing blockchain being adopted in a wide range of industries.
As an example, blockchain is ideally suited to the supply chain, where it can be used to facilitate the transfer of goods from one party to another and allow organizations to track the status of goods in real-time. In this way, blockchain increases the security and transparency of the supply chain and generally makes the whole process much more efficient. Which is why Walmart and its Food Safety Collaboration Center in Beijing use blockchain to track farm origination details, batch numbers, factory and processing data, expiration dates, storage temperature, and shipping details for pork.
Any industry that needs to track supplies, materials, and products can benefit from blockchain – and that’s just one example of how blockchain will revolutionize the world of business. So, if you think web3 has no relevance to your organization, think again.