How to tackle the Web 3.0 craze and not die in the process
Our thoughts on this trend, its possible impact, and how to prepare your business for it
At this point, everyone who is regularly on the internet has heard about web 3.0, NFT,s and the metaverse hype. Many believe this is our way into more immersive, democratic, and customized virtual experiences. While critics cast doubts on its promises and adoption possibilities, we want to explore how these tools will work in real-life scenarios, and take a step back to think deeper about the possible repercussions of what web 3.0 will actually mean for your life, and business (if you have one).
But first, what makes web 3.0 so appealing?
Many believe that unlike web 2.0, where the power relies on a few big players (FAANG), web 3.0 returns power to the users through the use of technologies that focus on the decentralization of structures.
Web 3.0, as it stands today, is an umbrella term for technologies such as NFTs, metaverse, cryptocurrencies, blockchains, and overall decentralized infrastructure. Its ideal version would bring transparency and democratize institutions such as banking, education, healthcare, among others.
An example of what this technology might look like in action is the project to transform Seoul into a “blockchain city”: In 2019, the city mayor Park Won-Soon revealed an $85 billion plan to connect government offices, enterprises, and city services with an “s-coin”. This would create a direct connection between the citizens and their government.
The Seoul Citizens Card will simplify government procedures and transactions, with the blockchain new system Seoul’s city hall will keep track of healthcare benefits as well as an overview of their personal history. This type of infrastructure facilitates a more horizontal voting system where the community actively participates in the decision-making process.
How close are we really to reaching web 3.0?
While terms like NFTs, cryptos, and metaverse seem to be everywhere, the truth is that we are not 100% there yet. A lot of work remains to be done to reach the core objective of a decentralized web. As of today, the majority of the NFT market is owned by less than 10% of its users, while Bitcoins are owned by less than 2% of its users.
An important point to consider is that, while the technology is in constant evolution, many companies are not prepared for implementing the changes immediately. From access to new hardware to training and education tools for both companies and customers, there are a lot of challenges companies need to face before jumping into the Web 3.0 world.
To understand more about where we are at, we need to understand the natural course of trends. Take a look at the Gartner Cycle for Emerging Technologies of 2021:
A lot of the technologies we’ve talked about are still in the innovation trigger phase, which means that the expectation and excitement are at their highest while the feasibility and productivity of these technologies are not consolidated, thus creating inflated expectations without real tangible outcomes.
How can you prepare your business for web 3.0?
Just because Web 3.0 is still not fully here, doesn’t mean you shouldn’t start preparing for it. For businesses to thrive in an ever-changing technological ecosystem they need to understand what the implications are.
For this, we recommend doing a PESTLE assessment, to help you understand the possible impact in a variety of scenarios for your business. PESTLE is an acronym that stands for the Political, Economical, Social, Technological, Legal and Environmental axes that are needed for full analysis of a trend.
Let’s talk politics
Businesses depend largely on their political context. Remember the example of Seoul’s transformation into a blockchain city? Today, many countries and cities are pushing for “smart cities” to encourage civilian participation, democracy, and more effective citizen services. Ask yourself this question:
What infrastructure is available in my country or city?
It’s very important to think about the local political implications for your business and how policies and regulations can put limitations on your growth.
For example, 5G technology has been used for a few years now but to this day, there’s still no global coverage due to the ongoing discussions among governments. Japan has blocked Huawei’s 5G due to fears surrounding security issues, Africa as a whole has been also slow on the implementation due to political (as well as other contextual) issues regarding technology.
Money, money money
Macroeconomic and microeconomic analyses are fundamental. In the grand scheme of economic development, start by asking yourself these questions:
- What are the demographic characteristics of my audience? What is their socioeconomic status?
- What are the most important web 3.0 implementations that my business can afford right now?
- Is the ROI worth the time and money?
If my business is not fully ready to implement web 3.0, where do I need to invest, to get me there?
These of the activities you can start implementing in your business to start approaching these technologies:
- Simple augmented reality content on presentations cards and business decks.
- Start learning about creating experiences in VR using software like Unreal Engine and Unity. For example, virtual tours and showrooms for your products.
- Enable pay with cryptocurrencies.
- If your business is creative or art-related, start dabbling in NFTs.
- You can also start training on AI tools like chatbots, text generators, etc.
Social responsibility is not just a millennial trend
2022 is an era in which customers actively support brands that show a promise to be more responsible for their impact on their communities. Businesses that champion diversity, representation, and accessibility will start taking advantage of others that don’t.
An example of this is the project CryptoPanties by the Fashion brand Rave Review, who are attempting to create a women-led space in the male-dominated crypto world. This NFT collection is also a call to bring sustainable techniques into these technologies, as they represent the upcycling aesthetic the brand is recognized for.
Are your new platforms and technologies accessible to everyone?
The technology factor
As we said before, a lot of the web 3.0 trends are not readily available when it comes to accessible technologies for most SMEs. However, this doesn’t mean that in order to participate in the web 3.0 space you need to create new fully digital experiences that might be too expensive or even counterproductive, especially for brick and mortar businesses.
Looking at alternatives of gradual integration can help you find interesting ways of bringing your business into this new space, with the technology that you have available or that is more easily accessible to you.
A good example of the use of these technologies in brick-and-mortar businesses is the Flying Fish club. This dining club uses NFTs as membership tokens. Members can use them to access exclusive experiences, activities, special menus and even share their membership with their friends and family.
What type of services can you start migrating to a digital environment? Are you and your team trained to take on these changes?
A new game means a new set of rules
Rapidly changing technology means new ways of doing business, daily operations, and redefining what was previously considered the norms and rules to follow, in most industries.
Some governments are not prepared for these changes or are not willing to give up power by introducing new regulations on different technologies. Several countries have placed limitations on the way many technologies can be used (with the latest example being the ban on Facebook from Russia). Decentralization, anonymity, and data protection are big promises of web 3.0 but they might come with a big price tag when trying to put them into action.
Another interesting case to analyze in this regard is the DAO, which stands for Decentralized Autonomous Organizations. The idea behind them is to create organizations that don’t rely on traditional power structures, but that are instead built upon code inside a blockchain, this can reduce bureaucracy and improve the democratic process. Critics say that translating complex human interactions into code can leave room for major flaws and what’s more worrisome, relieve human actors of any liability.
This worst-case scenario has already happened inside web 3.0 space, specifically in the case of The DAO. Back in 2016, The DAO was created as a venture capital fund on the Ethereum blockchain. It managed to raise more than $139 million in Ethereum (ETH) making it the most successful crowdfunding effort to that date.
Problems began when third parties — taking advantage of the open-source nature of The DAO’s code — tried to find vulnerabilities. Needless to say, they succeeded. The DAO’s leadership failed to address these issues and decided to launch anyway, probably due to their confidence in their “non-leader” status behind the decentralized premise of the organization.
Weeks later, a hacker was able to take over 30% of The DAO’s available ETH, which equated at the time to about 5% of the entire ETH economy.
These types of cases show us the need to be aware of the risks that non-regulated spaces can have for us. This ‘digital wild west’ can bring copyrighting, data protection, fraud, and issues among others. It’s important to make sure that local regulations can help protect your business and your clients.
How are you protecting your users in this new virtual environment?
It’s not easy being green
Truth is, operating a blockchain and using anything that depends on it, will consume a ton of energy.
It’s hard to give concrete numbers on how much energy the mining and transaction of digital currencies require. Because of the computing power needed to mine and sync transactions done through a blockchain, some say it would take Bitcoin close to 6 hrs to complete the same amount of transactions that Visa does in under a minute. According to the New York Times, Bitcoin uses more energy than many entire countries! Putting things into a more digestible scale, to mine one bitcoin today, you would need the same electricity that a normal household uses in 9 years.
Understandably, governments and environmentalists are wary about the very real impacts that the adoption of digital currencies will have on the planet. Some countries like China, Sweden, and Iceland have started to implement new regulations trying to limit the mining activity in their countries and others are exploring the option to switch to renewable energy. However, because of the huge amounts of energy required from key activities on the blockchain, it will be hard to find a real solution to this problem.
Businesses looking to implement web 3.0 technologies into their business strategy, must take into account the impact and energy costs that it will require.
Is there a way you can minimize your digital footprint when entering the web 3.0 space?
So, what now?
While a lot of these questions might make web 3.0 a daunting challenge, it is important to take all factors into consideration. Being ready and open to change and innovative ideas, comes with doing the right research, planning carefully and finding the right strategies for your business.
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- “RAVE REVIEW IS DIVERSIFYING THE METAVERSE WITH UPCYCLED DIGITAL CRYPTOPANTIES”, Autre March 2022 https://autre.love/interviewsmain/2022/3/3/rave-review-is-diversifying-the-metaverse-with-upcycled-digital-cryptopanties
- “The line goes up — The problem with NFTs”, Folding Ideas January 2022 https://www.youtube.com/watch?v=YQ_xWvX1n9g&t=1038s
- “Exclusive: Austrian Programmer And Ex Crypto CEO Likely Stole $11 Billion Of Ether”, Laura Shin, Forbes, February 2022 https://www.forbes.com/sites/laurashin/2022/02/22/exclusive-austrian-programmer-and-ex-crypto-ceo-likely-stole-11-billion-of-ether/?sh=5fd6c42f7f58
- “Seoul Official Plans to Build $100 Million Blockchain Smart City”, Asia Blockchain Review, November 2018 https://www.asiablockchainreview.com/seoul-official-plans-to-build-100-million-blockchain-smart-city/
- Bitcoin uses more electricity than many countries. How is that possible?, New York Times https://www.nytimes.com/interactive/2021/09/03/climate/bitcoin-carbon-footprint-electricity.html
- “Cambridge Analytica and Facebook: The Scandal and the Fallout So Far”, Nicholas Confessore, The New York Times, April 2018 https://www.nytimes.com/2018/04/04/us/politics/cambridge-analytica-scandal-fallout.html