While the widespread emergence of the Web3 topic only confirms a trend already at work for several months, many enterprise blockchain projects are already turning to investments for the future. DeFi (decentralized finance) and NFTs saw their heyday in 2021. This year, we are about to witness a full-on explosion of the Metaverse and DAOs. But what is Web3 all about, and why does it excite tech buffs and business entrepreneurs alike?
Ultimately, why is it called “the new version of the Internet” and how do enterprises see timely adoption of the updated medium today? Let’s figure it all out.
What Is Web3?
To better understand what Web3 is all about, let's take a brief look back at the history of the Internet “formats” leading up to the Web 3.0 evolution.
Web 1.0 was the first and the most basic version of the Internet as we know it. Archaically, only static pages offered minimum interactions (clicking buttons, etc.). At its dawn in the mid-90s, it served more as an info repository and contacts directory, with emails gradually becoming the main communication tool.
The middle of the 2000s saw the eventual evolution of the World Wide Web into interactive, open-to-new custom content, the versatile medium we see through the browser today. Back then, the main innovative highlight of Web 2.0 was every user’s ability to create websites and fill up the web with individually-tailored content.
Websites like Google, Facebook, Amazon, and others created by small teams or a single person served as the main reference points. And the cornerstone of the need for Web 3.0 to appear in the first place is closely tied to these legendary sites turned global trademarks.
So why is the need for Web3?
A common opinion is that today’s web is overly centralized. This means that the most popular and widely used resources are owned by a bunch of huge brands that have firm control over whole online niches. We are talking about names like Meta, Apple, and Google’s parent Alphabet among others.
Some of them have been around for what seems like ages, since the very kick-off of the Web 2.0 format or even earlier “days of yore” online, collecting massive storages of personal data and content through the years. The thing is, companies behind market-leading platforms like Instagram and Facebook completely own these platforms and the data they accumulate. The “centralization issue” stems from the fact that a simple user doesn’t get a say in the matter.
In other words, we don’t get to directly influence resources that have sort of privileged access to all our data and actions in terms of these resources. For instance, you get full freedom of posting, reposting, searching, and editing content on Facebook, but while Meta provides access to the platform for free, it is the corporation that benefits from and earns on your active profile.
And it can easily decide to ban or delete it if a Meta moderator sees the need.
Why Is Web3 Called a Revolution?
The concept of Web3 was originated by Gavin Wood, an Ethereum co-founder. You should see why the term revolves around decentralization and the open-source nature of things, being a brainchild of one of the blockchain pioneers. With the advent of Web3, we are about to witness a revolution because Internet users are about to get full control over their data, identity, and actions online.
More than that, as the main contributors to the ultimate demand for the Internet, users will get their part in the decentralized resource’s management, shaping platforms at different levels while keeping their online entity fully independent and secure.
The Internet, where there are no “niche owners” that decide for everybody else and consumer-provider relationships are almost completely horizontal. That’s what makes specialists deem Web3 a revolution.
The Role of DAO and Main Challenges
Web3 is better defined when we talk about decentralized autonomous organizations, the famous DAOs (Decentralized Autonomous Organizations).
Take a classic company, with a decision-making board of directors and premises. A DAO is the same thing but with three fundamental differences:
- the entity has no premises;
- the decisions are already known in advance (because they result from the logical execution of a computer code) and executed by smart contracts in an autonomous way;
- the “board of directors” is made up of all the people who own the token of the entity or protocol.
In a DAO, everything is transparent and traceable on the blockchain. Autonomy is allowed by smart contracts because once deployed, there is no way to stop the protocol as it was designed unless an element is planned in the code before deployment, of course.
Today, DAOs are simply a draft to put at the origin of foundations or associations. But in a world where Web3 takes over, DAOs may safely represent a majority of entities.
On Web3, users collectively manage platforms via blockchain functionality. A bit like a cooperative, each time the user publishes a message, he/she can earn a token for their contribution. This token gives them both the opportunity to participate in decisions made within the platform and to hold shares on the platform.
For instance, they get to make decisions on the evolution of the social network, whether to ban this or that person, with the other content creators. In addition, everyone gets full control over their data and owns it with the possibility of reselling it or keeping it secret.
Underlying difficulties
Instead of having a well-defined boss, all Web3 users get the means to intervene in the decisions of the company. On paper, the model looks perfect. But the blockchain model it is based on requires a lot of money. To store all this data, you have to invest in large data storage centers. And therein lies the big problem.
The flip side of investment funds
In 2021, no less than $15 billion was invested in enterprise blockchain projects, NFTs, or cryptocurrencies. Then, there is also a $2.2 billion-rich Crypto Fund III initiated as a financial backbone for the development of Web3. Such investment potential leads us to another possible challenge.
Twitter’s co-founder and former CEO Jack Dorsey stated that instead of “giving power to the people”, Web3 will be owned by investment funds and sponsors that shape them. He argues that the concept may ultimately turn out to be just another “centralized entity with a different label.”
DeFi risks
Global regulators are already raising concerns when it comes to decentralized finance or DeFi. The main goal of DeFi solutions is to help users gain independence from banks. But while it grants yet fuller control over one’s online entity (specifically, over private data and finances), DeFi may also encourage money laundering once early mass-use DeFi iterations hit the market.
Decentralized scalability
Lastly, let's not forget about blockchain scalability. Any system needs to scale according to growing rates of workload. Blockchain networks process huge amounts of data and aren’t scaled that easily. While this is still a problem yet to be solved, enthusiasts are finding promising solutions to lifting blockchain limitations (such as the block size limit and block verification time cuts) via sharding, hard forking, and segregated witness (SEGWIT) techniques.
Why Did It Gain Popularity So Quickly?
In a nutshell, the rise of NFTs (or non-fungible tokens) and cryptocurrencies helped propel Web3 into the limelight.
Today’s blockchain is not all about cryptos - it also serves as a sturdy foundation for smart contracts as well as the creation and performance of decentralized applications (dApps). Combined altogether, these blockchain capacities will set Web3 in motion.
Blockchain is famous for its high availability (due to the decentralized way of storing data on users’ servers) and firm security (due to the cryptographic validation system where other users validate transactions). In the Web3 realm, this would enable user communities to own, operate, and improve platforms by backing internal service functionalities with tokens.
In turn, tokens can be acquired and used as an interaction medium for all sorts of actions (from posting a message to validating a transaction). Users would also have to manage a single personalized blockchain account where a complete history of actions is recorded.
Companies Starting Web3 Projects
At the moment, we cannot really define a Web3-type business yet. But there are specifics that set it aside from a Web2 undertaking:
- Companies are betting on decentralization;
- They are gradually shifting from data ownership processes that have become a norm - a Web3 company does not ask users to share personal data, all they need to log in is a crypto wallet;
- Lastly, Web3 market players work with certain Web3 technologies (NFTs, AI, cryptography, machine learning, or other blockchain-based capacities).
Here are some of the companies leading successful Web3 projects today:
OpenSea is the biggest NFT marketplace out there. It is a P2P NFT marketplace where users get to mint, post, and buy/sell NFTs in a streamlined fashion without a centralized entity controlling any platform assets.
With the extensive range of NFTs it provides, OpenSea is normally referred to as an "Amazon for Web3". Today, it is the largest NFT market solution of all time by sales volume, having accumulated around $32 billion in sales by the time of this article’s creation.
Magical Eden is the leading Solana-powered NFT market marketplace that employs the network’s capacities to amass a whopping $1.6 billion in trading volume. The platform enables the creation, buying/selling, and trading of digital collectibles, game assets, and a range of other NFTs. Up to date, Magical Eden holds 95%(!) of Solana NFTs market share.
An Australian startup, Immutable was established in 2018, becoming the source of Immutable X, a top Layer 2 solution for NFTs that is put in the foundation of the newest Web3 games. It also delivers gas-free typing on a platform that is carbon neutral. Animoca Brands is known to actively support Immutable, which has already secured $279.8 million in investment.
A Web3 venture capital studio with its main office in Miami, Florida, NFTY Laboratories’ main goal is to "support and produce solutions for the Web3 of tomorrow." In a nutshell, NFTY Labs develops technology, community tools, and standards for NFTs. It also makes cross-chain NFT standards and procedures easier.
Starting Web3 Project: Who Do You Need?
Naturally, with the growth of Web3 businesses, there is an increasing demand for Web3 talent. So, if you are recruiting employees to start a Web3 project, who and what do you need exactly?
1. Surround yourself with associates and competent collaborators in the most important areas for Web3 сompany:
- Web3 developers;
- creators of value-added content (artists);
- specialists in "branding" (brand strategy);
- people who have already managed or built a large community (influencers or growth hackers).
Your Web3 project is a brand. This, of course, requires a brand platform but beyond the latter, it is a real prism of identity that you will need. Where the brand platform synthesizes the identity of your brand via points characterizing its singularity, the prism of identity (by Jean-Noël Kapferer) allows you to interpret its exteriorization (the desired image) and its interiorization (the 'perceived image’), between you (the issuer) and your target (the community).
This step requires expertise in brand building with regard to an audience (randomly - although - this expertise is shared between Creative Director and Strategic Planner).
It’s also important to identify your first sponsors. These can be community (influencers, opinion leaders, lobbyists) and/or financial (seed funds (business angels), specific aid for innovative projects (BPI)). The competitive pressure on the NFT sector inevitably suggests the need for sponsors from the earliest days.
Advantages of Working in Web3
The benefits of working in the Web3 industry are numerous. For instance, most Web3 jobs offer remote work opportunities, allowing you to work from anywhere you feel comfort. Plus, Web3 offers something not only for Web3 developers but for regular internet users.
Also, most Web3 jobs offer higher pay than Web2 jobs. You will also be able to become part of exclusive communities and DAOs. The ability to attend Web3 events and conferences around the world as well as the opportunity to receive NFT airdrops are some of the other benefits of working in this industry.
Conclusion
Web3 is still a fuzzy concept hailed by its proponents as a decentralized version of the internet based on blockchain, the technology behind many cryptocurrencies. Yes, it is yet to be widely introduced and adopted, but Web3 is already a major buzzword across niches. While cryptos, NFTs, DeFi, and other blockchain-powered solutions are becoming a norm, brands, businesses, and individuals are venturing into the Web3 space. So, are you looking to get at the forefront of the Web3 revolution?
In the simplest terms, Web3 (or Web 3.0) is the next iteration of the internet that will be completely decentralized. Web2 is limited by the way a group of centralized tech giants majority control the web and, therefore, user data. In contrast, “Web3 embraces decentralization and is built, operated, and owned by its users,” according to Ethereum. So why not go for it today? We have the expertise and experience to help you start.
