At the core of the Web3 hype is the vision of our decentralized lives. Decentralization is a dynamic vision taking shape and can be translated as the peak of human evolution. Web3 will implement faster than its predecessors. It will bring users a deconcentrated, verifiable and secure internet.
The decentralized networks are built on blockchain and are powered by smart contracts and DeFi. This ensures that no single entity has a monopolistic control over any technology. As we become global citizens now, the rules of the economy have to naturally change.
Web3 offers an optimistic new world order with potential to disrupt our current system of economy, rules and governance. It will be a game changer in the way we interact with each other and how we do business.
Web3 will disrupt our current economic system by introducing new directives and changing how we view currency and trade. It won't limit user engagement within the virtual world but become an extension of the real economy. It will allow organizations and individuals to trade, invest and build newer parameters. Web3 will eliminate intermediaries, human intervention and arbitration which reduces logistic costs.
While communicating about Web3 and its ecosystem we have to be pragmatic, not quixotic. The audience needs to believe in the technology before adopting it. It’s a largely aspirational spiel or wealth creation narrative being yold and perceived so far. The real wealth lies underneath.
Ending the data monopoly
Web1 introduced the internet, Web2 globalized economies, connected communities and individuals. But that happened in exchange for global tech giants as they gained access to our personal data. Web3 returns us the ownership of our data. Stored in the decentralized networks, it will no longer be controlled by any big company. As platforms evolve, the users become stakeholders of their digital assets which can be tokenized and transacted. Artists or content creators can now convert their work into a secure, sellable asset. It is immutable, can't be stolen and will always provide the worthy value and not a mere royalty. Imagine Intellectual Properties (IPs) and Patents getting a Web3 Avatar. It will make possible the existence of innovative business models. The World of digital collectibles - blockchains, cryptocurrencies, non-fungible tokens (NFT), decentralised autonomous organisations (DAO), and the metaverse will completely change the rules of ownership.
Big Societal impact - Decentralized Finance
Decentralised Finance (DeFi) breaks barriers and disrupts the traditional financial world. It enables financial applications of blockchain that design smart contracts to cut intermediaries. Web3 may be the panacea to achieve the UN's Sustainable Development Goals, which aim to end poverty, reduce inequality, and protect the environment. It can make information more accessible and strengthen individuals and communities. The UN's World Food Programme (WFP), which delivers supplies to refugees across the world, is the best example. We also have 'impact tokens' that call up new investments and economic opportunities delivering a positive social and environmental impact. Several platforms like Moeda, Fishcoin, Empowa empower SMBs and the entire value chain. Collaboration of the private sector, the government and Web3 technology will make this happen.
The metaverse... big deal!
The term "metaverse" refers to a virtual-reality experience. In terms of technology, it is a Web3 framework for economic interoperability. The infrastructure is being constructed, and I believe that this immersive, decentralised spatial world will have everyday applications. It has the potential to completely transform how we live, work, and interact with one another through technology. The metaverse, which simulates the real world, has the potential to make this process faster, safer, and more cost-effective. This could potentially allow real users to enter the industrial metaverse, making them a part of the product development process from the start or hold training. The emergence of a metaverse will also act as a catalyst for the development of blockchain platforms focused on decentralised governance or finance. It has enormous utility in B2B and industrial, which the brands are yet to communicate.
Addressing the Cons
For an ideal New World Order, the ecosystem must be aware of the consequences and address them from the start. Cryptocurrency is the medium of transaction in the Web3 era and the volatility is something to be fixed immediately. The Bitcoin fall and the ongoing FTX bust have shaken the world and are a deterrent to investors. It is good that these questions have come into the spotlight and will result in regulations and strict reporting laws for trust and transparency. Other challenges, such as legal ownership, security issues, scalability, and privacy, are being addressed in real-time as well. It is expected that India to lead deliberations through the G20 Summit on global efforts to regulate the volatile instrument.
Among other environmentally sensitive issues, Blockchains and cryptocurrency are notorious for their high energy consumption. Bitcoin mining in China alone could consume more energy than 181 countries by 2024. However, solutions have begun to emerge from within the players which use exponentially less energy.
Udit Joshi, is account director, Frontier Technologies Practice, Adfactors PR