Web3: What is the future of internet? Report 2022
From innovations such as NFTs and cryptos to the proliferation of decentralised autonomous organisations and blockchain-based infrastructure and storage, rapid web3 innovations are happening across the board.
"Web 3.0 (also known as Web 3.0) is an idea for a new iteration of the World Wide Web which incorporates concepts such as decentralisation, blockchain technologies, and token-based economics. Some technologists and journalists have contrasted it with Web 2.0.
They say data and content is centralised in a small group of companies, sometimes referred to as "Big Tech". The term "Web 3.0" was coined in 2014 by Ethereum co-founder Gavin Wood, and the idea gained interest in 2021 from cryptocurrency enthusiasts, large technology companies, and venture capital firms."
We see its impact not only in the financial sector but almost every sector -- including services, retail, media, healthcare, IT, eCommerce, government or energy -- is preparing to jump on the bandwagon.
While many still tie the fate of technologies like blockchain to the highly volatile cryptocurrency market, according to experts, web3 technologies will transform conventional processes in all sectors.
Growth of Web3
According to Market Research Future, the Web 3.0 sector will be worth more than six trillion dollars by 2023, and web3 will grow at a CAGR of 44.6% from 2023 to 2030. The report noted differences between web3 and past technologies: "Web 3.0 implies data ownership and decentralised control. The first version of the internet, Web 1.0, was built solely on content produced by governments, organisations and businesses. With Web 2.0, users became creators, turning to social media, blogs and websites."
A Gartner report reaffirms that all will start tokenizing their applications, and web3 will be ever more prevalent in ways business is conducted. It further notes that technologies like metaverse, the decentralized apps industry, AI, video gaming and machine learning will further accelerate the growth of Web 3.0.
Web 3.0, also known as the third iteration of the World Wide Web, is a concept that incorporates decentralization, blockchain technologies, and token-based economics. It is expected to have a significant impact across various sectors, including finance, services, retail, media, healthcare, IT, eCommerce, government, and energy.
Web 1.0, on the other hand, was the first iteration of the World Wide Web and was characterized by static websites that were primarily used for information dissemination. Web 2.0, also known as the "participatory web," introduced dynamic websites and user-generated content, enabling users to interact and collaborate with each other online.
There are several key differences between Web 3.0 and its predecessors. One of the main differences is the emphasis on decentralization and data ownership in Web 3.0. In contrast, Web 1.0 and Web 2.0 were more centralized, with content produced and controlled by governments, organizations, and businesses. Web 3.0 also incorporates the use of blockchain technologies and token-based economics, which enables a more secure and transparent way of exchanging value online.
Another key difference is the shift from centralization to decentralization in terms of control. In Web 1.0 and Web 2.0, control was largely centralized in the hands of a few large companies. In contrast, Web 3.0 is based on decentralized technologies, such as blockchain, which distribute control among a network of participants rather than a single entity.
Overall, Web 3.0 represents a major shift in the way the internet is used and the way value is exchanged online. It has the potential to transform conventional processes across various sectors and bring about greater decentralization, security, and transparency in the digital world.
Forbes explains that with Web 2.0, users became creators, turning to social media, blogs and websites. They relied on centralised web services owned by big tech companies as advertising became the top revenue source. Even the ad tech space is witnessing changes with the advent of web3 and AI algorithms, as they bring more efficiency.
What are the top use cases for web3?
Web 3.0 or web3 is the third stage in the evolution of the internet. It works through decentralized networks to deliver faster, better and more secure user experiences. The technologies underlying the development of web3 include artificial intelligence, semantic web, machine learning and cryptography.
What are DAOs?
One of the top web3 use cases would point at Decentralized Autonomous Organizations or DAOs. DAOs are online communities under the ownership of the community itself.
The decisions here depend on the consensus of members. One individual or a central entity cannot change the rules of DAOs. DAOs also ensure autonomy, security and anonymity by using smart contracts.
DAOs are one of the best examples of on-chain governance where according to Investopedia, "rules for managing and implementing changes to cryptocurrency blockchains are encoded into the blockchain protocol." Decentralized Autonomous Organizations automate corporate governance in the virtual world by encoding specific policies in smart contracts. The principles of DAOs may easily apply across a wide range of assets and organisations.
What is DeFi?
The second use case is decentralised finance or DeFi. As the name suggests, DeFi applies tenets of decentralised applications to financial services. The policies embedded within secure distributed ledgers in such applications, referred to as protocols, determine specific functionalities, including the scope of the application.
In short, Decentralized Finance (DeFi) refers to financial applications that are built on blockchain technology and operate without the need for traditional intermediaries, such as banks. DeFi has the potential to increase financial inclusion, reduce transaction costs, and improve the efficiency of financial services.
DeFi Use Cases:
Among web3 use cases, the top highlight of DeFi is payment blockchains.
An example of a DeFi application, a decentralized exchange (DEX) allows users to buy and sell cryptocurrencies directly with each other, without the need for a central authority. This can help reduce the risk of fraud and improve the security of transactions.
Among the top use cases of DeFi are crypto lending and borrowing. Another example of a DeFi application, decentralized lending platforms allow users to lend and borrow cryptocurrencies peer-to-peer, without the need for a traditional financial institution.
Allowing crypto owners to receive loans against their crypto as collateral will help increase access to credit and reduce borrowing costs for borrowers.
While DeFi has enabled payment blockchains, the big promise here is peer-to-peer digital transactions and, as a consequence, financial inclusion of the masses.
DeFi apps eliminate intermediaries and stimulate peer-to-peer financial transactions. DeFi is also the foremost web3 use case, which bought about the increase in cryptocurrency usage.
The significance of DeFi becomes evident with the facility of low-cost, peer-to-peer, almost instantaneous, and borderless transactions.
Expectations are that the DeFi blockchain for payments in the current value chain will achieve transparency and counter abuse, waste, and fraud.
They may also prove to be cost-effective and participative.
Further innovations in cryptography, such as zero-knowledge proofs, offer stakeholders more trust in commercial digital and financial infrastructure.
Minimising data leakages common in Web 1.0 and Web 2.0 and by adding layers of privacy, web3 technologies like DeFi will not only play a crucial role in the future of digital accessibility and regulatory compliance but also transform how we store and share data.
Blockchain games are video games that use blockchain technology to facilitate in-game transactions and enable players to own and trade unique, non-fungible assets. Interoperability and standards have always been issues in gaming. Blockchain-based games offer advantages of privacy and the flexibility of transferring in-game objects to other games.
One example of a blockchain game brand is CryptoKitties.
CryptoKitties is a collectible game that allows players to breed, buy, and sell virtual cats using blockchain technology. Each cat is a unique, non-fungible asset that is stored on the Ethereum blockchain. Players can buy and sell cats using cryptocurrency, and the value of the cats can vary depending on their rarity and attributes.
CryptoKitties was launched in 2017 and quickly gained popularity, with some cats selling for tens of thousands of dollars. The success of CryptoKitties helped to drive the growth of the non-fungible token (NFT) market and demonstrate the potential of blockchain technology for in-game transactions and asset ownership.
However, the blockchain game market is still in its early stages, and it is difficult to predict the long-term impact of this technology on the gaming industry. Some experts believe that blockchain games have the potential to disrupt traditional gaming models and bring about greater player ownership and control over in-game assets. Others are more skeptical, and believe that the market may be oversaturated with too many similar games.
While we gaze at the future of gaming, another use case of decentralized technology is for augmenting reach and monetization opportunities for creators.
Web 2.0 revolutionized sharing and caused a massive uptick in user-generated content (UGC). Web 3.0 will allow game developers to build around an interoperable ecosystem of goods and services being exchanged in and out of the game. For instance, to use NFTs, crypto, real-world assets and more within the game to create immersive experiences.
Play-to-win models have been quite successful, and Blockchain games like Axie Infinity are no exception.
Since Facebook changed its name to Meta, there has been massive chatter online about metaverse. There seems to be boundless optimism around a virtual world, a three-dimensional embodiment of the internet, where users can move around freely in their digital avatars.
Did someone say Second Life?
As of 2022, Second Life has about 40,000 concurrent users. The web traffic, on average, has been exceeding 10 million.
One example of a metaverse brand is Decentraland. Decentraland is a decentralized virtual reality platform built on the Ethereum blockchain. It allows users to create, experience, and monetize content and applications in a virtual world. Decentraland is composed of a network of interconnected, user-generated virtual spaces, known as "lands," which users can buy, sell, and trade using cryptocurrency.
Another example of a metaverse brand is The Sandbox. The Sandbox is a decentralized gaming platform that allows users to create, share, and monetize their own gaming experiences. It uses NFTs to represent in-game assets, such as characters and items, which can be owned and traded by players.
There are many other brands that are working on developing the metaverse, including High Fidelity, VR Chat, and VRScout. The metaverse has the potential to revolutionize the way we interact and engage with the digital world, and it is expected to have a significant impact on a range of industries, including gaming, entertainment, education, and commerce.
Supply Chain Management
Web 3.0 technologies, such as blockchain, can be used to improve supply chain transparency and traceability. This can help reduce the risk of counterfeiting and fraud, increase efficiency, and improve the overall sustainability of supply chains.
One example of a brand that is using Web 3.0 technologies for supply chain management is Everledger. Everledger is a company that uses blockchain technology to create a digital record of the provenance and ownership of assets, such as diamonds, luxury goods, and art. By creating a secure and transparent record of ownership, Everledger aims to reduce the risk of counterfeiting and fraud in the luxury goods industry.
Another example of a brand using Web 3.0 technologies for supply chain management is Provenance. Provenance is a company that uses blockchain technology to create a traceable record of the journey of products, from the raw materials to the final product. By providing transparency and traceability in the supply chain, Provenance aims to improve the sustainability and ethical sourcing of products.
There are many other brands that are using Web 3.0 technologies for supply chain management, including IBM, Maersk, and Walmart. The adoption of Web 3.0 technologies in supply chain management is expected to increase in the coming years, and their impact is likely to be significant in improving the efficiency, transparency, and sustainability of supply chains.
Web 3.0 technologies, such as decentralized identity systems, can be used to enable secure and verifiable online identity verification. This can help reduce fraud and improve the security of online transactions.
One example of a brand using Web 3.0 technologies for identity verification is uPort. uPort is a decentralized identity system that allows users to create and control their own digital identity on the Ethereum blockchain. uPort enables users to verify their identity and share specific information with other parties in a secure and transparent manner.
Another example of a brand using Web 3.0 technologies for identity verification is Civic. Civic is a decentralized identity platform that allows users to securely store and manage their personal information, such as their name, address, and date of birth. Civic enables users to verify their identity and share specific information with other parties, such as banks, landlords, and employers, in a secure and transparent manner.
Web 3.0 technologies, such as blockchain, can be used to improve the interoperability and security of electronic health records (EHRs). This can help reduce errors and improve the efficiency of health care delivery.
One example of a brand using Web 3.0 technologies in healthcare is Gem. Gem is a company that uses blockchain technology to create a secure and interoperable platform for the management and exchange of EHRs. Gem aims to improve the efficiency and accuracy of health care delivery by enabling the seamless exchange of EHRs between different healthcare providers.
Another example of a brand using Web 3.0 technologies in healthcare is MedRec. MedRec is a decentralized platform that uses blockchain technology to create a secure and verifiable record of patient medical records. MedRec aims to improve the interoperability and security of EHRs by enabling patients to control and share their own medical records with healthcare providers.
There are many other brands that are using Web 3.0 technologies in healthcare, including Hashed Health, SimplyVital Health, and Tierion. The adoption of Web 3.0 technologies in healthcare is expected to increase in the coming years, and their impact is likely to be significant in improving the efficiency, interoperability, and security of health care delivery.
With the advent of web3 technologies, we anticipate a faster, interactive, engaging, secure and more immersive world.