Web3 is an emerging technology ecosystem that has the potential to dramatically alter the way businesses operate in both the physical and virtual worlds.
Web3 is more about the confluence of many technologies than it is about any one separate technology. They are all based on a philosophy that aims to improve the consumer’s position in the market and the bond between companies and their target audience. What is Web3 and how will it affect businesses in the future years, you ask? This new technology promises to radically alter the ways in which we do business and interact with one another.
What Exactly is Web3?
To understand Web3, we first need to get its history straight. Web 1 linked computers throughout the globe, but it was effectively a ‘read-only’ internet. Through Web1, Web2 emerged, often known as the Internet which allows for both reading and writing. Real-time news, live broadcasts, social networking, online shopping, gaming, and more sophisticated web applications are just some of the many examples of how the Internet has evolved over the years.
The second generation of the World Wide Web is now the standard. Everyone now has the tools to create and distribute their own content over a wide range of channels, most of which remain under the sway of the different platform providers.
Now, Web3 is the internet’s next major upgrade. Web3 will enable transactional and ownership models that merge real-world and digital assets, bridging the gap between the two worlds in a manner akin to the metaverse and often referred to as the read-write-own internet.
Web3 has the ability to bring about a sea change by giving consumers more control and ownership of their assets in a truly decentralised environment that is enabled by cutting-edge technologies.
How are Businesses Going to Use Web3?
Think about existing loyalty programmes to understand how Web3 will alter the commercial landscape. The more money a consumer spends with your company, the more loyalty points they earn towards future purchases and other advantages.
Customers who participate in a Web3-based loyalty programme have full control over the points they earn and may trade them with other members of the programme or for cash. In this way, the buyer, the seller, and the name all win. It generates secondary sales income while attracting new users into a brand’s marketing funnel.
In addition, Web3 makes it possible to simultaneously handle an item in both a digital and physical environment. Meanwhile, digital assets may be converted into novel, improved forms of items. The system’s built-in confidence would come from the use of trustworthy technologies like blockchain.
This kind of online ownership creation has the ability to dramatically alter the relationship between businesses and their target audiences. Online environments will suddenly become more lifelike than ever before. As a result of new possibilities for linking services and commodities, not only will consumer connections be affected, but so too will B2B transactions and collaborations.
When compared to the Metaverse, a shared digital reality that allows users to communicate and collaborate in real-time, this new hybrid form of reality is very different. The foundation of Web3 is that it will allow for the establishment of economies without any vested interest in ownership.
Web3’s Potential Advantages
Web3 offers a wide variety of possibilities for businesses. These include:
Putting People Back in Charge
Making the web more tailored to its users restores the balance of power. Consumers would have complete control over their data, which would have significant positive effects on their security and privacy while also providing opportunities for customization and financial gain.
Human Communication’s Evolution
Web3 has the ability to provide brand-new channels of communication between users by eliminating the need for intermediaries helping the evolution of human communication.
Changing the Foundation of Business
Non-fungible tokens allow digital ownership of different assets (including NFTs), while stablecoins allow the exchange of money and precious metals, all thanks to blockchain technology’s ability to represent and record ownership. This kind of decentralised financing has the potential to radically alter the current commercial and operational framework. All thanks to Web3.
Applications of Web3 for Businesses
Decentralized Finance (DeFi)
Web3 opens the door for corporations to take part in the rapidly expanding Decentralised Finance (DeFi) industry, which offers financial services based on blockchain technology. DeFi systems, such decentralised exchanges, lending protocols, and stablecoins, provide users with access to financial instruments that are open, safe, and programmable. Businesses that use DeFi may improve financial inclusion, reduce transaction costs for international trade, and research new sources of capital.
Supply Chain Management
Web3’s approach to supply chain management makes use of the immutable characteristics of blockchain to increase visibility and tracking across the supply chain. Distributed ledgers allow companies to monitor their whole supply chains, which improves authenticity, cuts down on fraud, and wins over more customers. This technique has enormous promise in sectors like the food and pharmaceutical industries, where checking the authenticity of ingredients and products is essential.
Digital Identity Verification
Web3’s decentralised method to digital identity verification does away with middlemen, allowing for more secure transactions. Securely verifying customers’ identities, streamlining Know Your Customer (KYC) procedures, and preventing identity theft are all areas where businesses may benefit from blockchain-based digital identification solutions. This has far-reaching consequences for industries including banking, healthcare, and e-commerce.
Intellectual Property Protection
New approaches of protecting intellectual property are introduced in Web3. Businesses may more easily register digital goods, verify ownership, and enforce copyrights by using blockchain’s distributed ledger technology. Smart contracts may be used to automate royalty payments to authors, musicians, and other content providers.
Decentralized Applications (dApps)
Web3 paves the way for the creation of dApps, shorthand for “decentralised applications,” that run on public blockchain networks. These programmes provide higher levels of discretion, safety, and agency to their users. For example, businesses may use dApps to develop cutting-edge social media platforms, markets, and games that run on the blockchain.
Web3’s Potential Risks and Dangers for Businesses
There is a degree of uncertainty around Web3 since so many concerns remain unsolved. Who, for instance, would be responsible for creating and maintaining the applications if decentralised computing and blockchain were used to facilitate information flow in the digital world without the need for centralised third-party governance? How would inappropriate posts be removed? If nothing would be done, Web3 runs the danger of becoming a hostile space where offensive speech is unrestrained.
The danger is that Web3 will be yet another disturbance that top executives will have to deal with. Keeping up with the times requires constant modernization. Whether they like it or not, businesses will need to adapt to Web3, and success in this new environment will call for a unique blend of strong emotional intelligence and a highly honed development mentality. Those who aren’t committed to lifelong learning may find it difficult to adjust to the new circumstances.
Embracing the Use of Web3
Most businesses will need to try new things in order to be ready for the coming of Web3. You’ll have to reevaluate some facet of your company’s operations at the very least. The idea of giving consumers greater say and ownership may be frightening to some. Concurrently, your business may need to reevaluate its ethical, privacy, and cybersecurity policies.