The term Web3 may sound a bit futuristic and technical, but it actually refers to something very interesting: a new iteration of the world wide web that hosts decentralized applications that run on blockchain technology.
Web3 is an ideology centered around freedom and democracy, as well as property. It enables people to build and own digital assets, rather than being products or beneficiaries of technology-fueled business models.
The emergence of the Web3
Web 3.0, or Web3 for short, can be considered a successful re-branding of blockchain technology. It was first coined in 2014 by Ethereum co-founder Gavin Wood in a blog post by him, “Insights into a Modern World”.
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The Web3 concept has captivated investors and tech industry insiders for more than a year, with investments in Web3 startups reaching $23.7 billion in 2021, according to research firm Pitchbook. In the same year, the blockchain analytics firm Chainalysis Inc. estimated that total NFT sales reached nearly $41 billion.
Web3 is still in early development. The industry and community are eager to integrate Web3 into the mainstream, but it could be years before we see widespread adoption of the standard.
Strengths and weaknesses of Web3
Web3 has stimulated the creation of new opportunities for artists, gamers and major brands through the use of cryptocurrencies, non-fungible tokens (NFT), virtual reality (VR), augmented reality (AR) and other forms of virtual interactivity.
According to a Gemini survey half of cryptocurrency owners in the United States, Latin America, Asia Pacific, Brazil, Hong Kong and India bought digital assets for the first time in 2021. In addition, 41% of respondents who do not own cryptocurrencies said he was interested in learning more or buying them in 2022.
Crypto.com reports that 295 million people worldwide were using cryptocurrencies at the end of 2021. If the current growth rate remains constant, this number could reach 1 billion by the end of 2022.
As interest in crypto-assets has grown, regulators have stepped up their scrutiny of the industry (they say) to protect consumers. In May, the Group of Seven (G7) called for swift, consistent and comprehensive regulation of crypto-asset issuers and service providers (something that even in light of the FTX scandal assumes even more significant importance, ed.).
As governments enter the cryptocurrency space and begin drafting regulations, decentralized technologies need to stay at the forefront of the industry if they are to stay true to the core precepts that led to their creation.
In December 2021, Twitter cofounder Jack Dorsey posted a tweetstorm criticizing Web3.
Since governance tokens can be bought and sold, it is possible for one entity to gain control of a platform. This could create an unfair system that benefits wealthy individuals.
$800B Bitcoin Owned By 2% Of Accounts, While 80% Of Market Value By NFTs belongs to 9% of Web3 addresses.
Another problem with Web3 is that DAO’s source code is publicly available, making it vulnerable to cyberattacks if hackers manage to exploit weaknesses in the code. For example, in 2016, a decentralized venture fund called TheDAO has been hacked .
Web 3 is exciting, but it’s also exposing weaknesses like cyber theft, plagiarism and forgery, exclusivity and elitism. The future of this internet chapter is currently in competition with those looking for money and prestige.
Web3 builders are implementing security measures that target fraud and hacking. Although cryptocurrency-related crime is at an all-time high, the growth is much slower than the overall adjustment of cryptocurrencies, which was $15.8 trillion in 2021.
The road to disruption is paved with hype and failure. Think of the dot-com bubble that preceded mainstream hits like Amazon, eBay and Craigslist.
Adoption and Web3 strategy of companies and their brands
Brands are engaging in Web3 just as they did with building websites, developing a mobile strategy, and engaging in social media.
While Twitter and Reddit allow users to display their favorite NFTs as profile pictures, Smart TVs allow them to be discovered, bought, sold and traded. Accenture has designed a metaverse for employees; Lacoste has activated a DAO-like voting system for its community of NFT collectors; Coca-Cola, Gucci, Louis Vuitton and many other companies have embraced collectible NFTs.
Here’s an overview of some of the ways brands are embracing Web3
Starbucks Web3 Strategy – Odyssey
Starbucks announced the launch of Starbucks Odyssey, a new web-based experience3 that will offer Starbucks Rewards members and Starbucks Partners (employees) in the United States the opportunity to earn and purchase collectible digital goods that unlock access to new benefits and engaging coffee experiences.
Unilever’s Web3 strategy
Unilever, a consumer goods company that owns brands like Magnum, Vaseline, Dove and Ben & Jerry’s, is embracing the metaverse by creating a cross-functional Web3 collective.
Marks & Spencer virtual influencers
Marks & Spencer uses virtual influencer Mira to promote clothing and accessories on Instagram. Mira stands for “Marks & Spencer, Influencer, Augmented Reality” and the digital character was developed using a combination of photography, cutting-edge CGI and computer vision.
Tiffany’s Web3 Strategy – NFT
Tiffany & Co., which has been active in the luxury goods sector for more than a century, made a splash by selling out all 250 NFTs called “NFTiffs” in early August. These NFTs are digital passes exclusive to CryptoPunk NFT holders and give access to personalized trinkets containing gemstones and diamonds.
Coachella Web3 Strategy – NFTs
Coachella sold three collections of NFTs: Sights and Sounds, Desert Reflections and Coachella Keys, in celebration of the return of the festival itself this past April. A set of 10 NFTs awarded lifetime passes to the annual event; a second set of 1,000 NFTs sold for $180 each. Buyers have received a photo book that is not available to others. All ticket holders were able to apply for a free NFT which could be used to get extras such as expedited entry. More than 63,000 ticket holders claimed their free NFTs, and more than 13,000 benefits and experiences were redeemed in addition to faster entry.
Time’s Web3 strategy – TIMEPieces
Publisher Time, 99, is leading traditional media into the future of NFTs with its TIMEPieces initiative. The initiative includes four collections: Genesis, Inspiration, Long Neckie Women of the Year, Slices of TIME and Beatclub Collection.
Brands aren’t the only adopters of Web3—government agencies are getting in on the action, too. For example, the UK made headlines in April by announcing a non-fungible token treasury project. In Japan, the Digital Agency said it plans to create its own decentralized autonomous organization (DAO) to better understand how it works before granting it legal status.
Building a Web3 strategy team
Web3 strategy leaders are becoming more common in companies, along with the hiring of chief metaverse officers. The need for one person to lead Web3 activities is growing in companies. Many companies have already hired such people, including Procter & Gamble, Spanish telecommunications company Telefonica and luxury goods maker LVMH.
Twelve years ago, companies didn’t think they needed a social media team and thought they could do it all themselves. But today, with so many people using Facebook, Twitter and other social networks? They understood that having a dedicated social media director and an entire social media team is essential to their businesses. The same goes for companies operating in the Web3.
As you start thinking about how your brand will appear in Web3, it’s important to consider how blockchain can help solve problems. Until you define both a pain point and a solution, it’s unlikely you can get people to come to your door. Aligning your strategy with the Web3 ethos can help ensure its success.
At present, Web3 is still in its infancy. It hasn’t entered common use yet, but that shouldn’t deter people from using and exploring it. After all, we forget that the internet itself has taken a while to be embraced by the mainstream.
If you want to join Web3, don’t wait to get started. It’s important to have a strategy in place before diving headlong into the new paradigm. (Photo by Julien Tromeur hon Unsplash )
The original article appeared on the blog Vattan PS who also collaborates with Startupbusiness
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