The future of the internet is here, and it’s called Web 3.0. As an active internet user, you’ve likely heard of cryptocurrency, NFTs and the metaverse, at least in passing. And if you fancy yourself an investor or a businessperson keeping abreast of the latest advancements in tech, you’ve probably looked more closely into these concepts.
As the next evolution in the way users interact within electronic spaces, Web 3.0 and its offerings are certainly worth paying attention to, specifically with the goal of understanding how your brand and company can leverage it.
But what exactly is Web 3.0?
Forbes does a great job at explaining and distinguishing it from the previous iterations of the internet. They explain that Web 1.0 or the “static web” was a limited-in-design web page that only permitted users to browse for information while restricting content creation to a select group. There were no interactive features in this version of the web.
Web 2.0, or the “dynamic web”, opened the level of interaction that could occur on the platform with users being allowed to create content using apps like Facebook, Instagram, and YouTube. With this innovation, users would also be able to communicate with other users and interact with the web pages.
Web 3.0 takes things a step further.
This version of the internet allows users to READ, CREATE AND OWN content. Building on the contributions of the preceding iterations of the internet, Web 3.0 essentially decentralizes control of web content from big data companies and places it in the hands of the people.
Call it the tech revolution if you will.
Now that we understand what Web 3 is, let’s take a look at some popular elements of the Web 3.0 experience and explore how they can be used for business purposes.
We begin with the foundation of Web 3.0 and turn to the experts for an explanation.
Jay Harris, tech expert and founder of the W3 podcasts, Digital Leaders, Web 3 Leaders & World Tech Forum, recently sat down with the host of The Value podcast to discuss the exciting world of Web 3.0.
During this episode, blockchain was described as the foundational code or programming that Web 3 assets such as cryptocurrency, NFTs, etc., are built on. Jay shared that the information about these assets that are being transferred is stored in blocks, i.e. segments of code that are grouped together. Each of these segments can be connected in a chain so that the current block remains connected to the previous blocks. This makes it difficult for persons to manipulate the information because all the back history of transactions is connected to the blocks.
Pretty simple right? Let’s talk about the assets.
Perhaps the most controversial of all Web 3 offerings, cryptocurrency is a method of payment used in Web 3.0. It is described by its creator/s; whose identity is somewhat of a mystery by the way; as an “electronic payment system based on cryptographic proof instead of trust.”
Yeah, I thought so.
Simply put, cryptocurrency is a digital currency that verifies and records in real-time, all preceding and future transactions using said cryptocurrency.
The transactions are verified and recorded on a blockchain, allowing all crypto holders to have real-time updates of the blockchain when new transactions occur. The blockchain itself acts as a form of accounting using software code.
The most popular example of a cryptocurrency is Bitcoin, which Jay advised was created to function like cash. Its biggest competitor, Ethereum, has additional capabilities like smart contracts (programming logic that prompts crypto transfers based on the fulfilment of certain activities or transactions by a particular date).
The attractiveness of this type of currency lies in its decentralized nature as well as its ability to be used for almost all financial transactions while potentially reducing banking fees and speeding up transactions through the removal of banks/middlemen.
Interestingly, there has been some contention on whether crypto is a valid currency given its separation from centralized financial institutions.
Recalling basic economic theory, money has some key characteristics that qualify it as currency. It should be widely accepted as a means of payment, a store of value and a unit of account to meet that qualification.
Cryptocurrency does not sufficiently meet these criteria.
In fact, while crypto is used by some to buy and sell products and services, it is not currently a widely used form of payment. Cryptocurrencies have also been subject to frequent, large fluctuations that make it difficult to hold their value. Additionally, it is not generally used as a unit of account as the masses still price commodities in terms of dollars and cents.
Notwithstanding this fact, cryptocurrencies can potentially take on the full characteristics of money in the near future as the world becomes even more digitalized. But pending such transitions, it’s best to understand how they work and how best you can capitalize on their existence for business purposes.
- You can use cryptocurrency as an accepted payment method for your business. Including an alternative payment option is a great way to diversify options for your customers while potentially attracting new, international customers who utilize this currency.
- The flip side of accepting payments in crypto is that you can use it to pay for goods and services for your own business.
- As stated before, almost all financial transactions can be conducted using crypto. That means you can invest or even take a crypto loan to finance your business. But of course, you should err on the side of caution and research if doing this, as the crypto world is governed by different rules to your traditional financial institution.
Next on the list of Web 3 concepts are NFTs.
Forbes describes non-fungible tokens (NFTs) as a type of digital asset that lives on the blockchain.
What makes NFTs special is the fact that each token is unique. This makes it especially useful in the creation of products whose worth is based on being distinguishable from others.
Think ticket sales, membership cards, identification, artwork, etc.
Jay shared an excellent example of a company that has incorporated NFTs in its business model.
Starbucks’ NFTs give customers access to secret menus, Starbucks events and a host of other activities that regular customers do not have access to.
Similarly, musicians who create NFTs for their albums can grant access to private listening parties as well as other unique activities and benefits to fans who have spent the extra money.
These activities allow consumers to build greater connections to the brands they love.
Jay describes the Metaverse as a virtual reality or augmented reality environment where people can come together in communities outside of real life. He shared that the use of the Oculus VR headset allows persons to engage in virtual reality in a 3D context.
There are several ways in which businesses can capitalize on the metaverse.
Firstly, it can be used to improve brand awareness and engagement. As a good business owner, you understand who your actual and potential customers are and should be able to determine whether the Metaverse is something they would be a part of. Answering this question can quickly tell you whether your company should investigate offering products, sponsoring events or even hosting virtual events within this space.
Even if you’re not yet interested in it for long-term use, hosting one-off events in the metaverse is an exciting way to make your brand stand out. Such once-off activities can be used to gauge potential interest in a more permanent existence for your brand within the Metaverse.
You may also want to consider creating NFTs or even a virtual store. As an example, Nike recently purchased a virtual shoe company that makes footwear for the metaverse. So, if you’re seriously considering an ongoing presence in the virtual arena, then setting up something similar should be on the table.
As with every sector, as innovation occurs, the businesses that survive are the ones that are agile enough to evolve their business operations to meet the changing market needs. Web 3 is certainly the next step in online communication of which concepts like NFTs, cryptocurrency and the Metaverse are a part. As such, it’s critical for brands aiming to maintain relevance to understand how these elements function and how best they can augment and deliver their offerings using these spaces.
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