The Future of the Internet: How Will Web3 Change Our Interactions?
August 7, 2023 - 10 min read
August 7, 2023 - 10 min read
Web3, also known as the decentralised web, is an evolving concept that will undoubtedly transform the way we interact with the internet. It builds on the foundation of Web 2.0, which brought about social media, cloud computing, and mobile applications, but takes it a step further by adding decentralisation, blockchain technology, and cryptocurrencies into the mix.
With Web2.0, we experienced a huge spike in online connectivity and information sharing. Now, Web3 promises to transform our online interactions by empowering individuals with decentralised control, fostering trust and enabling many different types of interactions. At its core, it represents a shift towards a more open, inclusive, and user-centric internet. Direct peer-to-peer exchanges are possible, eliminating the need for intermediaries and enabling point-to-point transactions. In this article, we will explore in more detail how we at Vodworks believe Web3 will revolutionise our online experiences and interactions.
One of the core principles of Web3 is decentralisation. Unlike the centralised nature of Web 2.0, where power is concentrated in the hands of a few tech giants, Web3 aims to distribute control among users. This shift empowers individuals, granting them greater control over their data, privacy, and online identities. Web3 envisions a future where users no longer rely on intermediaries like social media platforms or online marketplaces, fostering a more democratic and user-centric internet.
Web3 will bring with it improved privacy and security features. With blockchain technology, users can have better control over their personal data. Blockchain-based authentication mechanisms ensure that individuals can selectively share their data with different services, protecting their privacy. Also, cryptographic protocols employed in Web3 offer secure transactions and safeguard sensitive information from unauthorised access, fostering a safe online environment.
In Web3, data protection can be best achieved by using end-to-end encryption for data transmission and decentralised storage solutions. Tools like InterPlanetary File System (IPFS) and StorX help data breach prevention. Another secure way to store, manage, and transfer digital assets is using trusted Web3 wallets that give users control over their private keys.
In the era of Web3, individuals gain true ownership of their digital assets. Non-fungible tokens (NFTs) and smart contracts enable users to prove ownership and authenticity of digital items such as art, music, or any other digital asset formats. Digital assets stored on blockchains allow for secure transactions and facilitate new avenues for creators to monetize their work. This transformative shift in the ownership model empowers artists, musicians, and content creators, enabling them to directly engage with their audience and receive fair and continued compensation for their creations.
Web3 tokens are digital assets that are associated with the vision of creating a decentralised internet. These protocols may provide various services, such as computation, bandwidth, storage, identification, hosting, and other online services formerly provided by cloud providers. With the advent of Web3, ownership of digital assets extends beyond NFTs and smart contracts. Web3 tokens represent a new form of digital ownership, allowing individuals to have control over their data and interactions on the internet. These tokens can be used to access decentralised applications (dApps) and services within the Web3 ecosystem. By holding Web3 tokens, users can participate in governance mechanisms, vote on protocol changes, and even earn rewards for contributing to the network's development and maintenance. This shift towards user ownership and participation in the decentralised web opens up new possibilities for collaboration, innovation, and economic empowerment on a global scale.
As such, Web3 will open up new use-cases and opportunities for digital asset ownership. We highlight just a few use-case examples below:
While traditional gaming restricts digital asset usage within the game environment, Web3 brings a paradigm shift. Gamers will not only be able to own in-game assets but also trade, sell, or use them across multiple platforms and games. This interoperability introduces a new dimension to gaming economies, allowing players to truly own and capitalise on their digital possessions. The Web3 ecosystem empowers gamers to harness the value of their digital assets beyond the confines of a single virtual world.
Each collectible, be it a digital artwork or a limited edition item, can be represented as an NFT, attesting to its uniqueness and ownership history. This not only enhances the value of collectibles but also instil a sense of trust and credibility in the market. Collectors can confidently display their digital assets, knowing they possess an immutable proof of authenticity.
Web3 Location-Based Objects
Imagine businesses using augmented reality to create digital collectibles tied to real-world locations. From interactive AR-based treasure hunts in art galleries to retail stores offering exclusive virtual items at specific physical sites, the possibilities are vast. This innovative approach attracts both digital and physical foot traffic, blurring the lines between the online and offline worlds and fostering an immersive visitor experience.
Web3 Full/Fractional Digital+Physical Items
Owners of valuable items can tokenize their assets, breaking them down into tradable fractions. This allows a broader range of investors to participate in ownership, democratising the investment landscape. Digital and physical items alike can now be treated as both functional and appreciable assets, adding a layer of financial potential to the traditional concept of ownership.
Traditional methods of transferring money internationally often come with high fees and extended processing times. In contrast, Web3 leverages blockchain technology to enable seamless and secure peer-to-peer transactions. The use of blockchain eliminates the need for intermediaries, leading to reduced costs and faster transfer times. This advantage is particularly impactful for individuals in regions with limited access to banking services, providing them with a direct and affordable means of participating in global financial transactions.
The emergence of Web3 and its blockchain-based platforms presents a real challenge to traditional banking systems. With its low-cost fees, decentralised structure, and potential to bypass the control of a single country, Web3's blockchain technology offers an attractive alternative for international money transfers. This poses a significant shift in the landscape of global financial systems, potentially undermining the dominance of traditional intermediaries.
Web3 aims to change social media by prioritising user-centric platforms. Traditional social media platforms have thrived by monetising user-generated content, often at the expense of user privacy. Web3 challenges this model by introducing mechanisms that reward content creators directly, such as microtransactions or token rewards. This paradigm shift empowers users, ensuring that their content and personal information are protected, and creators and participators are fairly compensated for their contributions.
Web3 promotes interoperability among various applications and platforms, enabling smooth data and service sharing. This empowers users with data control, facilitating effortless platform transitions without exposing digital identities or personal info.
In contrast to existing setups, businesses won't require uniform systems. Instead, they can merge into a shared blockchain. Users manage their data in wallets, facilitating seamless cross-platform movement through simple integrations. This decentralisation empowers users to switch between platforms, unlocking heightened data mobility.
Web3's emphasis on interoperability becomes even more evident through real-world scenarios. Take, for instance, the exchange of airline loyalty points for hotel rewards. Airlines frequently provide customers with loyalty points for their flights, allowing them to accumulate points over time. Traditionally, converting these airline miles into hotel points involves a complex process of accounting and settlement, where hotels compensate airlines for the transferred points.
However, with the implementation of Web3 interoperability, a transformative shift occurs. Both airline and hotel companies no longer necessitate the adoption of identical systems; instead, they seamlessly integrate their operations on the blockchain. This integration empowers users to utilise a single wallet across different platforms, effortlessly engaging in token swaps between these companies. This entire process takes place within the secure wallet ecosystem, eliminating the need for extensive accounting procedures and complex marketing activities. Here lies the true power of interoperability – it removes the requirement for uniform systems.
This concept is also exemplified when looking at data portability. In traditional systems, data locked in one platform requires partnerships between platforms to share it. In Web3, decentralisation of data is achieved by centralising it under user control, allowing users to move data between platforms as long as the platforms integrate with their wallet.
Web3 introduces the concept of decentralised autonomous organisations (DAOs), where decision-making and governance are decentralised. DAOs operate through smart contracts, allowing individuals to actively participate in shaping the platforms or communities they engage with. This democratised approach to governance ensures that users have a say in the development and direction of the internet, promoting inclusivity and transparency.
As of now, key issues that impact successful transition to Web3 include:
1- User Friction
The complexity of Web3 processes can create barriers for mainstream adoption. Many users are not familiar with blockchain concepts and need context training to navigate these technologies effectively. Simplifying user interfaces and providing intuitive guides are crucial steps to mitigate this challenge.
2- Compliance and Anti-Money Laundering (AML) Concerns
The decentralised nature of Web3 platforms can raise compliance issues, especially concerning AML regulations. Striking a balance between privacy and regulatory compliance is essential to ensure the legitimacy of transactions and prevent illegal activities.
3- Scalability and Fee Predictability
The standard version of Web3 blockchain can suffer from scalability issues and unpredictable fees due to network congestion. To address this, layer 2 solutions are introduced, which build upon the main blockchain to alleviate congestion and offer more predictable fee structures, ensuring smoother and faster transactions.
4- Trust and Scam Prevention
The decentralised nature of Web3 also brings opportunities for malicious actors to exploit unsuspecting users. Scams and fraudulent schemes are prevalent in the Web3 space, leading to trust issues among users. Education, user protection mechanisms, and transparent governance can help address this concern.
5- Knowledge Barrier and Web3 Integration
Integrating Web3 technology into existing business models can be challenging due to the knowledge gap between traditional and blockchain technologies. Some businesses may not fully grasp the practical benefits of Web3 or how to best combine it with their existing operations without full transition to Web3. Bridging this gap and strategically integrating the strengths of both Web3 and Web2 can unlock synergistic possibilities for enhanced business operations.
Web3 holds tremendous promise for the future of the internet. By introducing decentralisation, blockchain-technology, and interoperability, we believe Web3 will foster more trust between internet participants; it will open up ways for participants to build relationships and engage with each other on multiple levels; and that it’ll present new ways for participants on all sides to monetize and create value.
Of course, it is important to note that the technology of Web3 is still in its early stages, and its full impact on applications and our interactions is yet to be realised. This is why our R&D team at Vodworks is actively investing in and working on applications of Web3 technology. We are exploring a multitude of ways in which we can address the adoption barriers and make Web3 more accessible and applicable to the users and businesses of today.
If you are interested to learn more about Web3 and how it can become part of your business strategy, get in touch with our team for a consultation!