According to Harvard Business Review, Web3 is being regarded as the future of the internet as we know it. However, as of March 2022, when the publication conducted a poll on LinkedIn asking if users knew what the term stood for, 70% answered no. To set the records straight: The New York Times has defined it as the name given to decentralised blockchain that is delivering a new kind of internet. The term itself was coined by Gavin Wood, co-founder of Ethereum in 2014 and has since drawn attention from Big Tech companies, venture capitalists and other financial firms.
So how did Web3 really come about and what are the potential benefits and risks? Vorto’s Bobby Ward gives a download of this new term entering the FinTech space:
This blockchain-based version of the internet is inclusive of cryptocurrencies, decentralised finance, NFTs and DAOs. Web3 is innovative and pushes the boundaries of technology because it invites users to have a financial stake within it and also have greater control with regards to the web communities they belong to. Because of this, Web3 is promising users that it will dramatically transform the experience of being online in a similar way to how both smartphones and the original PC did.
In essence, we are currently living in Web2, which can be defined as a period of centralisation. In this era of the internet, we live in a world where we participate on platforms of both communication and commerce, such as Facebook, Google and Amazon. These platforms are subject to government regulation. However, in Web2, it is a monopolistic setting whereby just a few companies have all control. Our society has been shaped by these platforms. Yet, in 2021, the term Web3 really started to gain momentum as the world adjusted to the trend of accelerated digital transformation that transpired from the pandemic. In theoretical terms, Web3 could completely shatter the current monopolies of Web2 and rewrite the rules of the internet due to the fact that blockchain can rewire the internet and change how information is shared, stored and owned. The consequences of this could mean that Web3 redefines who controls information, how networks and businesses work and fundamentally, who makes money. On a radical level, Web3 would be an era of democracy for the internet.
Just like Web2, disruption and change to the internet brings new possibilities and unleashes opportunities such as new economies and job prospects. However, for this to happen, it is a very long road ahead. Success of Web3’s fruition will be dependent on talent, money and energy all being poured into its future. Hurdles are to be expected and technical, ethical, environmental and regulatory challenges are yet to be overcome. With the promise of the decentralisation of the internet, comes the looming threat of theft and privacy concerns.
It is clear that Web3 is in its infancy. Businesses and governments are in a process of attempting to understand its potential. For businesses that get their timing right in this new and rapidly changing landscape, the potential return on investment could be huge. However, it is a space that also includes risk. Organisations and business leaders need to weigh these risks up before diving right in to embrace the new era of the internet.
This unfolding tech evolution is breaking up existing monopolies and centralised power structures which I believe is a step in the right direction for humanity.