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Web3 is the potential new iteration of the internet, innovating from Web1 and Web2 and integrating concepts such as decentralisation, blockchains and cryptocurrencies. As Web3 becomes more and more prevalent, business owners need to know what it all means and what it means for their business.
Web1 (or Web 1.0) was the first iteration of the internet, a read-only version that lasted from around 1989 to 2005. As you can imagine, the functionality and complexity of Web1 was very limited and was mainly used by companies rather than individuals as only a select number of people knew how to operate the internet, compounded by the fact that internet access was very scarce.
This is drastically different from what we know today as the newer generations grow up immersed into the internet, being able to easily navigate and use the internet. There are even these people nowadays called website designers who can freely create their own content on the web but I don’t know any personally 😉
Web2 (or Web 2.0) is the second iteration of the internet as is where we are at right now, a read-write version of the internet. This was a huge shift and improvement from Web1, leading to a much more widespread and easy-to-use version of the internet with user to user interaction through social media.
This new iteration has allowed anyone, with the necessary knowledge, to create their own content on the internet, share it to peers and have comments from those users whereas this was simply not possible back in the old Web1 days. The accessibility of the internet also improved as access to the internet became less expensive and more common. As a result, as you’ve probably seen, content creators can start up their own business through a simple blog or a social media account and can then move onto creating an ecommerce website to sell products to their fans.
P.S. if your followers are screaming out to buy some of your products online, let’s have a chat about your website.
You might have seen posts on social media talking about Web3 and thought what are they going on about? Well, Web3 is a potential new iteration of the internet which has been gaining more and more prevalence and is already being implemented by major companies such as PayPal, Microsoft and Amazon.
Web 3 (or Web 3.0) is the next chapter of the internet which will involve cryptocurrency, blockchains and decentralisation, all explained below! This new chapter has the main aim to give back the power and ownership of the internet to the users rather than huge technology companies through decentralisation.
Cryptocurrency is a digital currency which is used as a medium for exchange without the need for a central middle man, removing the need of a bank or government, known as decentralisation. These currencies are becoming more widely used and are accepted by some the world’s leading companies such as Wikipedia, Microsoft & PayPal.
These cryptocurrency exchanges work on blockchains which act as a secure database for all transactions so that a third-party company or authority does not have to be used. You’ve definitely heard of Bitcoin and possibly Ethereum but according to Investing.com, there are almost 11,000 cryptocurrencies being circulated.
Blockchains are used with cryptocurrency which maintain and secure a decentralised record of all transactions. By using blockchains, there is no need for the middle man, meaning that transactions can be made between peers without a central body.
In short, each transaction is stored as a block of data and that block is then connected to other blocks before and after it, creating a blockchain.
We have touched on this concept a little already but decentralisation is the process in which transactions or activities are made away from a central company or authority.
There are many benefits of decentralisation including:
You might have seen that some of the Web3 technologies discussed above are already being used by some of the world’s leading companies, in the UK and worldwide.
According to a number of sources, over 15,000 businesses accept Bitcoin so that customers can make exchanges with the cryptocurrency medium. Moreover, customers are becoming increasingly more comfortable with using cryptocurrency for exchanges with over 200,000 bitcoin transactions being made every day.
Here are some examples of Web3 technology being used in more detail by the world’s leading brands.
Last year, PayPal announced that they were supporting the usage of cryptocurrency between PayPal and other wallets. Through PayPal, you can buy, sell and hold cryptocurrencies, being able to can choose from Bitcoin, Ethereum, Litecoin and Bitcoin Cash; PayPal also has a range of educational articles to help learn more about crypto.
Microsoft has been increasing their involvement and investment in Web3 technology, recently posting a new job role for a Director of Business Development – Cryptocurrencies.
Through Microsoft Azure, a range of Web3 technology services are provided such as blockchain development, confidential ledgers and database ledgers.
Amazon is matching Microsoft with their ‘Amazon Managed Blockchain‘ services, making it very accessible to create and manage blockchain networks. This product is used by some major companies including Accenture, AT&T Business and even Nestlé – as long as Nesquik stays the same, that works for me.
We are never too far away from websites and one of the leading domain registrars and web hosting provider, Namecheap, accepts Bitcoin as a medium of payment for their web-related products and services. This means that you could purchase your website’s domain and hosting without any need of a bank or central body.
Women N FTness is the 1st NFT project dedicated to providing fitness, nutrition and mental health programs for women. As well as receiving your own NFT, you can benefit from the Web3 and NFT courses that are provided to improve your knowledge in this expanding field. I had the pleasure of being a part of the project launch by designing and developing the website.
Believe it or not, you can book a hotel or other accommodation with bitcoin on Expedia via the crypto-friendly booking platform Travala. Having been announced in 2020, the number of accommodations that are able to be purchased with crypto, this now has increased to over 2,000,000, initially at 700,000 in 2020.
As you’ve seen, Web3 technologies are being more widely used by both companies and consumers with over 6% of people in the UK owning cryptocurrency. Although that may seem quite insignificant, in 2021, more than 52% of UK crypto owners used crypto for spending, an increase of 10% from 2020. Wherever you look, you’ll see that the usage of crypto and other Web3 technologies is increasing, meaning that your business will have to adapt to the changing times.
The main way that your business will be affected by Web3 is through the usage of cryptocurrency as a medium of payment. The demand by customers to be able to purchase products and services with cryptocurrency is increasing day by day and eventually, it is likely that your customers will want to pay via crypto. If you have an ecommerce website, you may have to look into how to integrate crypto payments through your site, just how alternative payment methods such as Klarna and Clearpay are being more widely used. According to Zippia, as of 2020, 28% of American small businesses accept cryptocurrency as payment.
As we have looked at, Web3 promotes decentralisation, meaning that the requirement for a central bank or authority for exchanges is not needed. This will help to reduce the number of stages in the supply chain so that businesses can more easily maintain and track transactions between suppliers and customers.
Without the central body, users take full ownership over their data rather than that data being controlled by a central entity. The users can then choose what data they would like to share with businesses, if any.
As all transactions are stored on blockchains, the security of data and transactions is greatly improved, meaning less worry of hackers or customer data leaks, something that could be so detrimental to a business’ reputation and future health.
The blocks of data on the blockchain cannot be changed or manipulated so business owners and customers will be better protected from data breaches or theft by eliminating single points of failure.
Related to this, as all transactions are stored on blockchains, each user within the network has shared access to the same data and that data is not being shared with other companies. This leads to greater transparency between business owners and customers, without also having to worry about bias, downtime or corruption when having to deal with multiple companies throughout the transaction process.
| Advantages | Disadvantages |
|---|---|
| Decentralisation removes the need for a central body | Decentralisation may make it more difficult to regulate |
| Decentralisation removes the costs of hiring a central body | There are significant costs involved in Web3 technology set up |
| Web3 uses advanced technology and AI | This advanced tech will be hard to grasp for beginners and may lead to a barrier to entry for consumers |
| Web3 uses advanced technology and AI | This advanced tech may not work on older devices which will need to be upgraded |
| Web3 will lead to an improved experience on the web | Existing websites will need an upgrade which will come with a cost |
| Improved security for transactions on blockchain | Anyone can gain access to the public data |
Hopefully this article has given you an insight into Web3, the aspects involved and what it means for business owners. Web3 is becoming more widely used by companies and consumers so before you’ll know it, one of your customers may ask you if they can pay for your products and services with crypto.
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