Recent geopolitical events have polarized the world. Partisanship and ideological division have further balkanized the Internet, whose guardians have trampled on the right of millions of people to access financial services. Nations are slowly waking up to the reality of having neutral protocols and national stacks.
Hailed as the next generation of the Internet, Web3 will be sanctions resistant and free of data silos. Gavin Wood, co-founder of Ethereum and creator of Polkadot and Kusama, coined the term Web3 in 2004. Five years later, the Bitcoin (BTC) white paper was published in 2009, further cementing the decentralization imperative. Is the decentralization narrative here to stay? Let’s find out why Web3 is gaining ground today.
Web3: the role of decentralization in the economy of innovation
Web3 can offer global digital lanes to help innovation and independence. The clamor for control of the big technology companies has fueled the debates around the Web3. The dominance of big technology companies over the Internet and their control over personal data has fueled the rallying cry for its decentralization. A well-known Silicon Valley venture capital firm, a16z, published its policy paper “Building a Better Internet: 10 Principles for World Leaders Shaping the Future of Web3.” In it it is stated that data ownership and monetization will lead to new business models in the age of Web3defending that:
“The world deserves a technology that can unlock opportunities for the millions of people who are on the fringes of the innovation economy and empower people to take control of their digital lives.”
The fundamental premise of the internet was focused on connecting people. The Internet has evolved in the last 30 years, and our interaction with it has also changed. Despite the changes, the era of online communities can be roughly classified into three time periods.
“Privacy is necessary for an open society in the electronic age,” says Eric Hughes, an American mathematician and founder of the cypherpunk movement, highlighting the importance of privacy and how it is more pronounced in a decentralized version of the internet. The current state of the Internet, Web2, reeks of a Big Tech monopoly; Facebook, Amazon, Apple and Google are today the owners and rulers of the Internet.
Advocates of Web3 have urged that the future of the Internet be built on the first principles of decentralization, self-sovereignty, data ownership, and resistance to censorship. The core of Web3 is the philosophy of a decentralized Internet infrastructure designed to ensure individual privacy..
Web3 has not yet reached its full potential. Right now, the idea of individuals exercising complete ownership of their data and privacy seems quite dystopian because adoption is negligible and limited to crypto-savvy individuals. Friction of entry into the Web3 space needs to be addressed.
Web Adoption3
The lofty ideals of ownership in a truly decentralized economy can only be realized if we create enabling tools and complementary infrastructures compatible with Web2 and Web3. Web3 adoption is still in its infancy, although some Web2 companies have started to gradually migrate to Web3 and are embracing decentralization. User-friendly infrastructure and services need to be created to ensure seamless user onboarding in the Web3 era. There’s still much to do.
The idea of portable digital identities and ownership on the Internet goes through easy-to-use Web3 wallets for everyone, including the non-cryptocurrency-native audience. Credential management coupled with digital asset custody is the missing link for Web3 adoption. A composite wallet that allows users to assert their identity in the physical and digital realm, store digital asset credentials such as NFT tokens, secure payments, staking and much more is the need of the hour. The inbound (fiat-to-cryptocurrency) and outbound (crypto-to-fiat) services of current players are far from satisfactory, which needs to be addressed from a user experience point of view to enable mass adoption.
Web3 and the economics of ownership
Web3 will bring about a paradigm shift in the way people in online communities use technology. The creation and distribution of value will no longer be at the mercy of centralized actors, and decentralized groups will enable new forms of ownership and co-creation.
Gaming, a $200 billion industry in 2021, is the way forward to bring users into the Web3 ecosystem. Emerging gaming markets such as India have more than 450 million players. Emerging markets have lower income per capita, creating huge opportunities for gamers to earn revenue through blockchain-based play-to-earn games.
Web3 games based on financialization are expected to continue to grow in the long run. Web3 is at the center of the discourse, focused on the economics of creators and ownership. JPMorgan’s recent report, “Opportunities in the Metaverse,” highlights the Importance of user experience with a single wallet in Web3 and meta-commerce. The report states that a unique wallet should include the following:
- Payment methods for traditional finance Web2, digital currencies and digital assets.
- Web3 cryptocurrencies, NFTs and digital assets.
- Verifiable digital identity credentials, anti-money laundering and Know Your Customer compliance keys, and reputation points.
- Multiple aliases to preserve privacy and enable digital freedom.
- Related: DAOs are the foundation of Web3, the maker economy, and the future of work
Tools and services based on privacy preservation and self-sovereignty are essential to realize the full potential of Web3 and the trillion-dollar opportunities in the metaverse.. An improved user experience is crucial for mass adoption.
This article has been written by sharat chandra and shiv aggarwal.
This article does not contain investment advice or recommendations. All investments and trading involve risk, and readers should do their own research when making a decision.
The views, thoughts, and opinions expressed here are those of the authors alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
sharat chandra is a speaker, educator, and evangelist for blockchain and emerging technologies. He leads the research and strategy for EarthId, an award-winning decentralized identity management platform.
shiv aggarwal is the founder and CEO of EarthId, an award-winning decentralized identity management platform. Today, Shiv drives EarthId to enable frictionless adoption of Web3-based ecosystems. He is a thought leader in the blockchain and digital identity space, and has delivered several lectures at international congresses. Shiv also leads the Government Blockchain Association in EMEA.
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