After the world went on lockdown, followed by crises in Afghanistan and now, the war in Eastern Europe, organizations, institutions, companies, and countries around the globe have been hit with a frenzy. In between all this chaos, there is a glimmer of hope in the form of Web3 – the third generation of the Internet
Web3 gives us a new way to monetize and classify one of the world’s most abundant resources – data. With people being dissatisfied with how their governments handled the COVID-19 crisis and the lack of transparency from the authorities, the ideas of decentralization and openness have emerged as necessary traits to incorporate into our day-to-day lives, especially on the Internet.
Understanding How Web3 is Disrupting Industries
The Foundations of Web3
Web3 is built on decentralization, openness, and more extensive user utility. This allows users to move away from centralized platforms such as Google and Facebook and more towards decentralized, nearly anonymous platforms. The vision for the Internet is that of an intelligent, autonomous, and open internet that uses AI and ML to act as a global brain and process content effectively and efficiently.
These characteristics of Web3 are far from being developed, due to technological limitations, but more and more websites are implementing its features, and within the next 5 years, most websites and platforms will be Web3-compliant. The main characteristics of Web3 include the following:
- Decentralization – Interaction between devices, users, and services will be possible without a centralized authority’s governing.
- Openness – Open-source software will be used to build content platforms
- Zero-Trust – Everyone will use a trustless environment, and network protection will reach its maximum potential.
Showcasing Web3 In Financial Markets
To showcase the disruptive potential of Web3, let’s take a look at where it’s most popularly used right now – financial markets. In today’s market, loans and lending money rely on banks as trusted mediators to safeguard our funds and provide loans in return for a small amount of interest. The information, the money, and the authority are all with the bank. They can charge additional fees as well to increase the bank’s revenue. The bank is a centralized authority in this case, and ironically, you don’t have control over the money that you earned.
With Web3, instead of entrusting funds to a bank or a non-regulated platform, depositors hold their funds themselves on a non-custodial wallet that represents an account on the blockchain. All ownership and transaction data reside on the blockchain rather than with a centralized authority. Instead of trusting their funds with some external agency, they can lend them out directly with smart contracts, which can escrow funds and distributes them when a set of initial conditions are met. Web3 enhances user value and allows users to decide what to do with things they own, and may enable services to be delivered more effectively through a shared infrastructure, compliance, and automation.
The Potential of Web3 Technology
Our example illustrated how Web3 is improving user experience and efficiency in financial markets, but it can be applied in many industries, such as:
- The education sector is likely to face a huge disruption with the rising popularity of digital credentials. Platforms like Hyperstack are leading the way in issuing decentralized, verifiable digital certificates and badges
- Gaming and E-sports are feeling wisps of disruption as Web3 offers a variety of opportunities for players as well as owners
- Popular social media platforms will be affected by Web3 the most. But they won’t be allowed to grow with it, as it is built on a directly opposing quality – decentralization.
- Cloud and data infrastructure will have a huge opportunity to grow. This is because Web3 technology relies heavily on this technology. Only when continuously developed, it can be implemented effectively
- Companies can utilize Web3 tools to increase brand awareness, reach new demographics, and uniquely engage customers
Challenges existing power structures
If Web3 is adopted globally, it will challenge power structures that currently limit access to certain parts of the Internet. This includes knowledge databases, only for privileged users, and keeps others locked out of the opportunity.
With Web3, we can focus more on our people’s skills. This allows everyone to compete with their own merits rather than letting those with privilege get ahead easier. We can rethink how talent is searched and matched with projects, and how people are compensated as well.
Changing Content Consumption
Web3 is enabling a new type of content creation economy that is more open and equitable. For starters, it protects original work. Creators can share content without worrying about censorship or copyright. It can also make monetization easier, as creators will have direct control over their content.
Another potential benefit of Web3 is that it makes content more secure. Content stored on a blockchain will make it harder for threats to modify or destroy. The most significant benefit is that it makes collaboration with other creators easier, with the use of smart contracts.
Web3 Credentials are a form of digital credentials, in that they exist digitally. They use the major characteristics of the technology in certification. While similar to traditional paper credentials, they differ from them because they are not controlled by centralized bodies.
While there aren’t a lot of platforms that allow you to integrate your digital credentials, Hyperstack has been leading the charge to a decentralized future. We allow you to issue as well as receive Web3-compliant credentials. Sign up for Hyperstack today.
Web3 is spreading to other sectors, and is a building block for an interoperable metaverse. But as with any new technology billed as disruptive, it is still yet to be seen when it can revolutionize sectors other than the financial sector. While skepticism is significant among many businesses and companies, interest among investors and the general public is still very high. According to reports from Fortune and a16z, VC investments in Web3 exceeded $18 billion in the first half of 2022. It remains on track to top the full-year total VC investments of $32.4 billion in 2021. Despite these early challenges, the adoption of Web3 applications has occurred at an exponential pace. It is driven by the enhanced user value proposition and disintermediated business models.
Web3 will only get better from here.