Understanding the building blocks and what they could mean for your business.
There’s a lot of mystery surrounding Web 3.0. There’s also a lot of buzz around a few of its key components: NFT, Blockchain, and Crypto Coins. Here at Carimus, we’ve been watching, reading, learning, and experimenting with these technology components and wanted to take a moment to share some of the basics of Web 3.0.
Before we get into the details, I want to orient you to the topic.
Three Key Topics to Web 3.0:
1. Web 3.0 is new and in the early stages.
Like the .com boom in the late 90s, many current players will fail and be the basis for a solid industry, and there will be a few winners. There are many attempts to adapt old models to this new technology stack without modernizing the models appropriately.
2. It’s happening whether you “get it” or not.
I’m old enough to have seen most of the major digital trends. Web 3.0 isn’t a shiny object. Many people redirect their time, talent, and capital to Web 3.0 projects at a scale that I’ve never seen. For evolutionary digital agencies like Carimus, we see this as an adapt-or-die framework.
3. Adoption will be slow.
There will be a season for every market to adopt Web 3.0. There is no need to make an instant hard pivot. However, I do recommend that you pay attention. Remember, there are still 16,000 banks globally that rely on AS/400s.
Community, Currency, and Data Storage
With the disclaimer out of the way, Web 3.0 has three significant differences: Community, Currency, and Data storage.
Web 2.0 businesses were made to create communities, monetize the data or content created by those communities, and use pay-per-use features in the traditional currency for monetization. Instagram is an excellent example of this. The Instagram community generates content with their images. Plus, Instagram charges advertisers for the opportunity to promote their products and services to their community in traditional fiat currencies.
For Web 3.0, the community could build the application AND decide product direction (DAO) or run it as a decentralized application (Dapp). The community also controls the value and ownership of the content (NFT), charges in a currency of choice (Cryptocurrency), and stores the records of the transactions on a distributed ledger (Blockchain). I’ll expand on these definitions.
Need-To-Know Definitions for Web 3.0:
- Cryptocurrency – Virtual currency secured by cryptography which makes it impossible to counterfeit or double-spend. Bitcoin is the most well-known example, and there is an excellent breakdown on the Bitcoin Org site.
- Blockchain – A distributed ledger or database shared among nodes of a computer network. Etherum is the most well-known example.
- DAO – Decentralized Autonomous Organization is a complicated topic that I’ll go in-depth about later. Essentially, this project has no clear owner and is managed by the organization’s direction by funding proposals. DAO Stack has a ton of information. Warning this can be quite a rabbit hole. Just in case you have the time, here is an in-depth DAO Stack, DAOstack.io, or DFINITY.
- Dapp – A Decentralized Application is an application running itself on distributed nodes. I recommend reading this article from Free Code Camp to learn more.
- NFTs – Non-fungible tokens are a way to represent anything as an asset. These are powered by smart contracts and give ownership to the content creator and create a clear chain of custody.
How Web 3.0 Can Work:
Digging a little deeper, we understand the tools, but what can we build? We can take some simple business applications and see some potential to reduce process overhead.
- Employment – The workforce is distributing already. There are sites like Upwork and Angie list that organize the community and facilitate the transactions while taking a portion of the proceeds for their effort. In the new framework, the community can make the rules for the platform, including payment.
- Copyright Protection – NFTs are being used to monetize work for tech-savvy artists but imagine an application where trademarks were recorded and licensed digitally. This would replace countless hours and the cost of enforcement and license. Artists could essentially remove the middleman, go directly to consumers with their art, and collect a more significant percentage of the fees.
Many of the current Web 3.0 models involve cutting out the middleman, but it feels like people are just scratching the surface of its potential. Anyone who claims to have a clear understanding of what Web 3.0 will bring is significantly overstating their knowledge.
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