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You almost can’t escape the buzz surrounding NFTs, cryptocurrencies and Web3. Some say that these technologies will revolutionize every aspect of society. Others say it is a pipe dream.
Since most entrepreneurs aren’t tech-focused, it can be challenging to understand what the future means for Web3 and your business, especially when it’s still coming into focus.
If you have no idea what Web3 is or why it is important, you are not alone. The term was coined by the co-founder of Ethereum, and it is actually quite ambiguous. But, enthusiasts on the subject say that Web3 is the future of the Internet and there are two main ways to define it.
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Web3’s Potential Futures
One possible Web3 future is a blockchain-integrated Internet. Cryptocurrencies and NFTs will be built into the platforms we use every day.
Now, blockchain is another hot topic that may cause some question marks for entrepreneurs. To keep it simple, a blockchain is a digital ledger. It arranges information in a publicly visible digital chain of “blocks”. It is famously built on cryptocurrency. However, it could potentially be used for a wide variety of applications.
The other potential future of Web3 is a bit more controversial and complex. Enthusiasts say that Web3 will lead to a fully decentralized Internet, which will be owned by users rather than corporations. Blockchain and its many applications can help provide such a future. But critics say the same has been said of the cryptocurrency, and it has so far failed to deliver.
Cryptocurrency was created and branded as a way to give individuals power over their own finances. So far, instead of revolutionizing the world of finance, it has become a high-risk speculative investment class without any consumer protections. Instead of promoting fairness, the world of cryptocurrency and NFTs is plagued by scams and unpredictability.
Since the cost of one bitcoin a year is higher than most Americans, there are certainly questions to be asked about who exactly cryptocurrencies give power and financial freedom. But keep in mind that even though we have been in the crypto sector for many years, it is still a relatively young industry, with a lot of room to grow.
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What does decentralization mean?
According to some Web3 proponents, the Internet is currently owned by a handful of companies. Think of giant corporations like Meta, Amazon and Google. They call it “e-feudalism”. Essentially, they claim that we are all “digitally diligent” on the virtual virtues of Mark Zuckerberg and other tech giants.
Web3 is well, they say, returning power to its users. Here’s a look at what a hypothetical decentralized social platform might look like: instead of going through an IPO, the platform would create cryptocurrency tokens, then they would broadcast them to initial users. People will be rewarded for going viral or using the platform with tokens, which can potentially double as governance tokens. Users can use the token to vote on important platform decisions ranging from content moderation and other broad-scale policy issues.
Essentially, instead of one company deciding how a platform works and users living by the impact of their decisions, users will collectively make the rules.
Wait, what happened to Web1 and Web2?
Some may feel like we’ve gone straight from zero to three. Fortunately, Web1 and Web2 are much easier to understand than Web3. This is partly because Web3 is still largely speculative, while the first two have already been successful.
Web1 is the first iteration of the Internet when your computer practically yelled at you every time you went online. Think of the slow, static web pages of the 1990s. The Internet of this era was mainly used to digitize and share existing media such as books, magazines and newspapers. By the late 90s, the blog was born, and for internet savvy, it was a new opportunity to interact with the masses.
Web1 also ran on the open-source protocol. This is an aspect to which the propagators of Web3 want to return.
The development of Web2 began in the early 2000s when the Internet began to become “read/write” on a wider scale. It evolved from a place where the average user logged in to take content to an accessible platform where more users could create, share and store unique information, photos and videos.
Incorporating the rise of sites such as Facebook (now Meta) and YouTube, this era eventually led to transformational technology such as e-commerce, social media, and the content creator economy.
Web3 advocates essentially seek to provide the complexity of Web2 with the community-governed open-source nature of Web1 – through blockchain technology.
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Controversy surrounding Web3
There are a lot of ideological and practical conflicts regarding Web3. Some, like Elon Musk, say it’s just a discussion right now. However, he does not rule out its future.
Critics say that encouraging users to take digital action with tokens could lead to a situation where bad faith actors seek engagement at any cost. However, the case can be made that even without the token, many social media users are already doing so. This can be a side effect of widespread Internet use.
In addition to philosophical questions, the question many people have is just how feasible a decentralized modern internet built on a blockchain really is. Ethereum, on which many potential Web3 projects are based, is incredibly inefficient.
It has a high environmental cost and is expensive to operate on a large scale. This means it is not possible for many small businesses to adopt it right now.
While many are working to build apps on top of Ethereum to make it work better, some critics question why we are pouring resources and talent into fixing the vast issues of such an inefficient foundation.
Furthermore, a key feature of the blockchain is that it stores information publicly, so that all users can see it. In some cases, this is a helpful innovation; However, in some applications, allowing all network users to view the entire transaction history of anyone would be a downside – and could even be dangerous.
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What does Web3 mean for your business?
Right now, Web3 is largely fictional. This means that no one is absolutely wrong or right about it. We don’t yet know what it will be, or if it will be anything.
Some say it will create a fair and community-governed digital future. Others, such as former Twitter CEO Jack Dorsey, Say That it would just lead to an alternative centralized authority.
Some malicious actors are using these futuristic buzzwords to harm people. For example, social accounts of the British Army were recently hacked Scam to promote NFT. according to a ftc reportThis year alone, Americans have lost over a billion dollars to crypto scammers.
As a business owner it is important that you have a foundational understanding on the potential of Web3, so that you can make smart decisions to take advantage of any technological advancements and avoid the pitfalls of getting swept up in the hype.