How Does Web3 Impact
In a world where blockchain and crypto are in the news on an almost daily basis, you may have heard the term Web3 tossed around. Web3 is a vision that aims to redefine the internet from corporate-owned networks controlled by companies to user-controlled communities using blockchain technology.
The idea is to provide users with the tools and knowledge they need to supplant existing monopolies and resistance, allowing them to reclaim control of their personal data and online experience. As an optimist, I’m happy to say that there are some signs of life in the new Web3.
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One of the most obvious differences between the old and new internet models is decentralization. Today, businesses like Facebook, Google, and YouTube control customers’ personal data, transactions, rights to publish content, and basic access to the internet. These companies are incentivized by financial markets to put shareholders ahead of customers, resulting in less-than-optimal outcomes such as data monetization, high subscription costs, and barriers switching to competing platforms due to ever-changing terms of service.
How Does Web3 Impact Traditional Internet Business Models?
In Web3, the underlying technology behind distributed networks like Ethereum and Bitcoin, people can host sites and apps collectively on their computers. These hosted sites and apps are known as nodes and can be accessed by anyone in the network.
Using cutting edge technology like blockchain and crypto, these nodes are coordinated and run by independent parties that are incentivized to serve the network. Anyone can participate by making their computer available to host these nodes and earn tokens as they help the network operate. This model is often described as read/write/own, and it’s similar to the way you might tip a waiter or cashier in real life.
Some established companies are already embracing the potential of these technologies. For example, the cryptocurrency marketplace OpenSea offers a number of on-ramps for people to purchase and sell virtual goods and digital assets like games, movies, and art. This allows them to offer a more seamless and scalable experience than traditional websites.
These marketplaces are a good example of how companies can use blockchain-based networks to restructure their business models and build new revenue streams that are more customer-friendly. By offering customer incentives in the form of tokens, established businesses can create more value for their customers and protect them from competitive alternatives with lower take rates.
As the burgeoning blockchain-based networks and decentralized applications that power the new Internet continue to evolve, it will be interesting to see how they impact traditional internet business models. As these trends develop, it’s important to keep abreast of them so that your organization can stay ahead of the curve. Otherwise, you risk falling behind and losing share to competitors with more streamlined experiences and better user-focused business models. To learn more about how your business can leverage these emerging trends, check out our ebook on integrating AI, blockchain technology, and machine learning into apps and websites.