Web 3.0 describes the next phase of the internet built on blockchain and decentralization. Web 3.0 is going to change the way services are monetized, how users pay for services, and most importantly, how user data is collected and stored.
Many describe Web 3.0 as the most revolutionary version of the internet yet. Businesses like IBM, Facebook (now Meta), JP Morgan are investing heavily into Web 3.0 technologies like Crypto and blockchain to gain a competitive edge.
Here is what you need to know about Web 3.0
Web 1.0 vs Web 2.0 vs Web 3.0
Each version of the web is signified by how it changed the distribution of data and liberalized digital interaction. Here is a breakdown of what each version of the web represents:
Web 1.0 – known as that static web represents the era when the internet was first created. Web 1.0 mostly consisted of static web pages and only individuals with advanced knowledge on the internet at the time were creators.
Web 1.0’s goal was to create a way for influential individuals, governments, and businesses to widely communicate with their audience.
Web 2.0, known as the creator’s web, represents the rise of platforms that allow regular individuals to create content and built a following. Web 2.0 saw the rise of platforms like CMS’, social media networks, website builders, blogs, and more.
Web 3.0 represents blockchain and decentralization. Its mission is to address the shortcomings of web 2.0 by returning power back to users by allowing better control over data, greater transparency, discouraging censorship, creating monetization models beyond advertising, and enhancing general usability between platforms.
Decentralization and blockchain allows users to keep data private and reduce dependence on proprietary platforms. Users can then use their data as an asset, either choosing to keep it private or monetizing it for tokens.
Web 3.0 and Crypto
Web 3.0 is commonly associated with crypto currency or tokens. The reason is that crypto was one of the first real world use cases for blockchain technology. Blockchain is decentralized and changes are forever recorded. This is also known as an immutable ledger. Because nobody can alter the value of a coin and all transactions are securely monitored and encrypted, it makes blockchain the perfect technology to build a digital currency.
Crypto also serves another purpose closely associated with the goals of web 3.0 which is to provide an alternative to advertising as a source of monetization for a platform, incentivizing users to use blockchain, and allow users to better monetize their data as an asset.
Is Web 3.0 Only About Crypto?
No. Web 3.0 isn’t just about crypto. Crypto helps incentivize blockchain use and is another technique for monetization other than ads, but Web 3.0’s capabilities go far beyond crypto.
Web 3.0 brings privacy to users, takes back control from powerful entities, makes platforms more transparent, eliminates censorship, and enhances overall user experience on the web.
Crypto proved to be one of the first real world use cases for blockchain which is why Web 3.0 is so focused on crypto currently. The beauty of blockchain is that it is immutable, meaning there are far more uses for blockchain thanz just keeping a ledger for currency. In fact, blockchain and decentralized applications can be used for just about any application where privacy or record keeping are important.
Use Cases for Web 3.0
Web 3.0 will further democratize the internet, changing the way users interact with businesses (and their advertisers).
Decentralization means platforms participating in Web 3.0 will no longer be data vacuums akin to Facebook or Google. Rather, users will “trade” their data for assets or keep it private.
Monetized Ad Viewing:
Instead of users trading away their right to privacy for the privilege of viewing a platform, they can instead sell either their data or their attention to the platform. For example, if a platform wants web 3.0 users to view ads, they can provide tokens for each minute viewed. That way, users can (optionally) view ads or participate in data collection in exchange for payment.
This can help advertisers, the platform, and users because users feel more in control and less likely to use an ad blocker if they know they are being compensated for their attention and data. Tokens can in turn help the platform because it builds loyalty much like grocery store gas points, and advertisers can reach a larger audience due to less users using ad blockers.
Case Study: Brave Browser
Brave browser is now providing users the option to view ads, paying them in a token produced by Brave for viewing the ads. This dramatically changes the relationship users have with the platform and makes them far more willing to view ads.
Brave can use this to their advantage by increasing ad viewing participation and potentially reaching a greater number of advertisers. In turn, they respect the rights of users that do not want to view the ads and simply let them use the platform without earning tokens.
Private Single Sign On
A great use for blockchain is private single sign on using a private key.
The way private SSO would work for example is if you want to sign on to a platform like your bank using a single click, similar to experiences offered by “sign in with Google” or “Sign in with Facebook”. Your private key, minted in the blockchain, would then certify you as the owner of the bank account then let you sign on. And this process can be used for any participating platform.
The advantage is that your credentials are now owned and stored by a third party. And there is little risk fo data breach because credentials for users are encrypted and decentralized. Hackers would need to hack specific users’ credentials rather than simply breach the platform and get a database of credentials.
This technology provides a better user experience by alleviating the need for password managers like LastPass and is far safer because your credentials are now stored by another platform.
Case Study: Meta Mask
Meta Mask is a popular crypto wallet that allows users to sign into participating platforms by using their meta mask private key.
Users simply use the Meta Mask extension which can then provide your private key to a platform that asks for it during login.
A major issue with Web 2.0 is communications platforms are controlled by governments and giant corporations that censor information when convenient.
Platforms like Facebook, WeChat, YouTube, etc all make money via advertising. And if content is deemed not friendly to advertisers, it is often censored. Government can also censor content at their discretion.
Imagine a platform that is distributed and all posts are recorded in the blockchain and thus can’t be removed. This would empower users that feel marginalized or unrightfully targeted. A censorship proof platform would help these groups spread their message and build an audience.
The downside, is that there is little recourse to defend communities against hate groups and others with malicious intentions.
NFTs and Licensing
NFTs (non-fungible tokens) are digital assets where ownership is minted in the blockchain. Only a single copy can be owned.
NFTs can help artists monetize their digital art by being able to show proof of ownership. An owner of a famous meme NFT for example could go to a business and offer their licensing rights in exchange for compensation.
Web 3.0 Changes
Web 3.0 is going to usher in dramatic change for how users interact online. And groups that previously benefited financially from Web 2.0 must find a way to adapt to accommodate Web 3.0 in their business model.
Advertisers Will be Greatly Affected by Web 3.0
Because users will now have greater control over their data which is now decentralized, advertisers will be unable to tap a single platform for an ultra-refined audience. Users can now keep their data private and advertisers will need to incentivize users more with giving up their data and potentially reward them for ad viewing.
A potentially upside to web 3.0 for advertising is there maybe other ways to advertise to users rather than paying high fees to platforms like Facebook. Perhaps there could be a market for advertising where users are rewarded for viewing advertisements and offers via a token.
New token-based social networks may also emerge where the social network is decentralized and open source, eliminating the fees of the platform when advertising directly to users so that only the best and most popular offers win out, or users are paid directly for views.
Regardless, advertisers will need to keep a watch for news regarding web 3.0, and make sure they are ready to adapt to a changing landscape moving in favor of users that demand greater privacy.
Pay to Earn Gaming Will be Huge
Blockchain gaming is growing in popularity. Axie Infinity for example reported 1.8 million daily active users in August 2021!
Blockchain provides unique advantages such as the ability to sell digital assets for tokens and built in anti-cheat for online games.
While blockchain games still aren’t as popular as games like Call of Duty, Fortnite, or Genshin Impact, they are steadily gaining interest from the gaming community because they switch the previous pay to play model to play to earn.
Two genres seeing great success using blockchain are digital card games and RPGs. Digital card games like Gods Unchained benefit because cards are traded as unique NFTs allowing players to trade them for real value much like physical cards. RPGs have RNG loot and rare items can be sold as NFTs if the player doesn’t want to use them to enhance their own account.
Prediction: NFTs Will Lead to More Stringent Digital Asset Usage Rules
In the future, NFTs will likely become assets that can be licensed. This means for example that a business that wants to use a famous meme for commerical purposes may have to pay a royalty to the NFT owner. This practice is common today with media clips and music use.
And as NFTs become a form of serious digital property, courts, like any other asset, will defend the owners right to monetize an NFT. This will result in much more stringent rules regarding how digital assets can be used.
Web 3.0 is the next big phase of the internet as we know it. Web 3.0 is going usher in changes that are going to be felt across a variety of businesses sectors, especially those that are funded via ads.
During the Web 3.0 era users will take their privacy more seriously, and expect compensation for their data and viewership. Digital assets will become one of the primary ways platforms generate activities from users. Blockchain will be embedded in all facets of our online platforms, especially sectors like banking.
Of course when industries like banking come into the conversation, so does regulation. Web 3.0 is going to need to balance privacy and freedoms with authorities wishing to regulate online activity. Web 3.0 is built on anonymity and decentralization which makes it difficult for governments to spot those it wants to take action against such as hackers, scammers, dissenters, protestors, etc. Governments also like to see control on the end of businesses like banks or insurance meaning the government would naturally prefer a centralized approach for key industries.
The greatest challenges Web 3.0 is going to face is creating decentralized applications that are more compelling than their Web 2.0 counterparts. Platforms will also need to carefully monitor how they are distributing tokens to users and make sure they attach a really word use for them so that users feel they are generating true value.