To talk about WEB3, I think it’s important we understand WEB2 and WEB1 first.
WEB1 – users consumed information on static websites but rarely interacted with them.
WEB2 – users interacted with systems as well as with each other, creating and enabling social networks and E-commerce. The internet became a platform for users to create, consume and share.
WEB3 is the next big step in the evolution of the world wide web we know and love today.
While WEB3 doesn’t have a formal definition yet, it can be known as a decentralized, fairer internet, not controlled by corporations.
It’s a work-in-progress, where individual users will be said to be sovereign. In simple terms, WEB3 promises that YOU own, control and profit off of your content, using blockchain technology and artificial intelligence.
Blockchain Technology is a digital ledger of all transactional records and every record in the ledger is authenticated by the digital signature of the owner of the transaction.
Previously, when we thought of blockchain, we thought of Bitcoin, a digital currency. We could buy it, sell it, and predict whether it would go up or down. Blockchain Technology has come a-ways since then. These days, you can buy and sell digital art (NFTs), video game items, and more.
With the transparency and efficiency Blockchain Technology provides, records will be immutable, duplication of records and third-party validation will be eliminated and the current centralized nature of processes will be toppled.
REAL WORLD APPLICATION OF BLOCKCHAINS – NFTs
‘Non-fungible’ means ‘unique’, ‘cannot be replaced.
I’m sure you’ve heard of the artwork of funny-looking apes being sold for millions of dollars on the internet. Seemed confusing, right? To better understand why NFTs can be so valuable, let’s consider an example.
Sam buys an NFT in the form of digital art. Maybe it’s an artwork of Pepe the Frog, drawn (and owned) by artist Ann. Sam pays 10 million dollars to be granted ownership of Ann’s Pepe the Frog. Ann still retains copyright and reproduction rights. But that’s alright.
Along comes Chase. The first thing Chase says is, “But I can just screenshot Pepe on my computer and now I own him too!” We all know a Chase. Chase is wrong. While Chase can screenshot or simply right-click and save the same image, he won’t OWN the art. He will simply have a copy. The original owner will still be Sam.
Think of it as owning an original Van Gogh, or hanging up a copy from the Dollar Store. You can’t flex about the copy.
When it comes to digital art, why is a copy any different from the original (apart from the ownership)?
Because NFTs have a feature where every time the artwork is sold or changes hands, the artist gets a cut of the profits and gains recognition if their NFT gains popularity. NFTs also benefit you as a buyer or a collector, in case you buy it, gain ownership, and sell it for a profit when its value rises. And, you know, the bragging rights.
It’s no secret that all the social media we use, all the websites we surf on, all of it, to some extent, is regulated or controlled by the government, or large corporations such as Google, Amazon, Facebook, etc.
We surrender our personal details to use services offered by these corporations. Whether it’s on social media or e-commerce or even participating in online forums, our private data is collected and sold to third parties to serve us targeted advertisements.
Now envision an internet where users are not required to place their trust in big tech, and give up their personal information to use their services. This is where WEB3 comes in.
Currently, data is stored on servers. When it comes to WEB3, data would instead be stored on the network. A public record of how the data is being used, where it is stored, and how it is modified will be maintained on the blockchain. A blockchain-centric internet would mean that access to the internet would be truly decentralized. Artificial Intelligence would be used to discourage bots and spam. Your private data can be viewed only by those members to whom you have granted access. All validated transactions will be recorded permanently.
DECENTRALIZED AUTONOMOUS ORGANIZATION
This gives rise to a WEB3 concept known as The Decentralized Autonomous Organization (DAO). The DAO is an organization designed to be automated and does not have a typical management structure.
Let’s say there’s a company, with a founder and a board of directors who created the set of rules and principles employees should follow when they sign the employee contract. When you joined the company, you agreed to follow those rules. A DAO is similar, except in a DAO, nobody has to manually check whether you are following those rules.
Your employee contract would instead be a “Smart Contract” – digital contracts that execute themselves automatically.
Let’s say that by the terms of your employment contract, you are required to complete 50 hours a week, at the end of which, you are paid $1000. So, you check in using a timesheet, which is then manually checked by HR, who will then send it over for approval to Payroll, who will pay you once the due process has been followed.
A smart contract will instead automatically release your $1000 at the end of every week. This transaction is then recorded on the blockchain (ensuring full transparency). Thus, nobody can modify or tamper with it, and the contract will have to be upheld for sure because all activity surrounding it is public.
Because there is no traditional management hierarchy, everybody who is a member of the DAO must work together to keep it functional and make decisions together regarding changes and improvements. In short, everyone acts as a shareholder. Every decision is made through a vote. The more tokens you have, the more voting power you have.
Through blockchain and WEB3 technology, DAOs will help businesses make the change from being all about centralized power to being all about community.
WEB3 AND MARKETING
It seems like there’s always a marketing revolution. We really do mean it when we say businesses and marketers need to stay on top of trends.
The coming of WEB3 will lead to an absolute boom in content creation. Be it digital art, games, or music, WEB3 will ensure that content creators will be fairly compensated for their efforts.
Marketers thrive on insights and analytics. Data being on the blockchain will help marketers access valuable information, thus leading to a better understanding of their target market and consumer behaviors. Marketers can also re-establish trust with their consumers and reconnect with their audience by giving them control over their data. People will no longer be “targets”. Instead, marketers will have to work harder to provide actual value to their consumers by creating the best possible experience for them.
Selling your brand’s content as NFTs, rewarding people for consuming your content using cryptocurrency, holding virtual marketing events on platforms like Decentraland – when it comes to WEB3 and marketing, the possibilities are endless.
The WEB3 era will usher in decentralized structures that are highly user-centric and completely transparent.
Platforms such as dApps and Polkadot will enable users to operate within and amongst blockchains and even create custom blockchains! WEB3 will lead to business transactions and partnerships being beneficial for everyone involved.