Shaping the Future of Digital Currency
One potential version of the internet in the future is Web 3.0, built on public blockchains, a distributed ledger system best known for enabling bitcoin transactions. Web 3.0’s appeal lies in its decentralization; Vitaliy Dubinin believes users no longer access the internet via the services of intermediary corporations like Google, Apple, or Facebook; rather, they access the internet directly through the domains and servers of other individuals.
Web 3.0 eliminates the need for both “permission” (central authorities not deciding who can and cannot use their services) and “trust” (intermediaries not being required for virtual transactions between two or more parties). Web 3.0 technically preserves user privacy better because these agencies and intermediaries perform much of the data collection.
Decentralized finance, or DeFi for short, is a rapidly developing area of Web 3.0. To do this, real-world monetary transactions must be carried out on the blockchain, but without the involvement of intermediaries such as banks or governments. Meanwhile, numerous organizations and VCs are investing heavily in Web 3.0, and it’s hard to imagine that this investment won’t lead to a consolidation of power.
Why is everyone talking about Web 3.0? What is Web 3.0? What is Web 3.0 in crypto? Where is it going from here? And why does all this even matter, you ask?Vitaliy Dubinin explains all that and more in this post.
What Does Web 3.0 in Crypto Mean?
There is a lot of talk about cryptocurrency in the context of the third generation of the internet. This is because cryptocurrency is vital to many Web 3.0 technologies. Instead, it offers cash compensation (in the form of tokens) to anyone who helps with the management, creation, or enhancement of any projects. Web 3.0 tokens, digital assets with a connection to the mission of creating a decentralized Internet, are now gaining popularity. Hosting, computation, bandwidth, storage, identity, and other internet services previously given by cloud providers may be made available via these protocols.
Example: theLivepeer protocol, built on the Ethereum blockchain, provides a marketplace for providers of video hosting and distribution services. Similarly, Helium incentivizes individuals and small businesses to supply and verify wireless coverage and transmit device data throughout the network by employing blockchain technology and tokens.
The protocol provides numerous technical and otherwise options for making a living. In the same way that customers would pay a cloud service provider like Amazon Web Services, this protocol often has a cost. Reduced reliance on inefficient middlemen is a common benefit of decentralization.
Web 3.0 will also have digital currencies and other blockchain-based features. To compete in the Web 3.0 era, Reddit is working on a system that will use cryptocurrency tokens to give its users greater control over specific aspects of the communities in which they participate. VitaliyDuninin is confident that “community points,” earned by contributing to a specific subreddit, would be used by users. The amount of credit a person receives is based on how many other users voted for or against their post. (Think of it as Reddit’s reputation system, but stored in a decentralized ledger.)
You can use these points to cast votes, providing people who have contributed extensively more say in community-wide matters. Due to being stored on the blockchain and following you wherever you go, these points are more secure than ever before and cannot be taken away. Decentralized autonomous organizations (DAOs) are a type of Web 3.0 organization that use tokens to distribute resources more equitably and encourage participation in governance.
What Can You Do to Prepare Your Company for the Web 3.0 Revolution?
Despite how far in the future it sounds, early applications of the spatial web, or Web 3.0, already exist. Business executives need to know what the future computer era entails, how it will affect businesses, and how it will create new value as it advances.
Additionally, by looking at current and useful Web 3.0 business models, individuals need to be ready to understand how some of the more established and experimental Web 3.0 business models may increase in value in the upcoming years. The sections that follow list a few of the methods.
Release of a Native Asset
The network cannot function or benefit from its security without these native assets. When the native asset’s price rises in tandem with the cost for malicious actors to launch an attack due to an incentive for honest miners to donate hashing power, the increased demand for the currency drives up its price and value. Therefore, these indigenous resources have been evaluated, and they’re worth determining.
Establishing a Network While Maintaining the Native Asset
Some of the first bitcoin network companies were founded to make their networks more appealing and profitable. A business strategy that can be summed up as “grow their local asset treasury; develop the ecosystem” arose. Blockstream, one of the largest Bitcoin Core maintainers, places a high value on its BTC holdings. ConsenSys has grown to a staff of 1,000 people and is enhancing the value of the Ethereum (ETH) it controls by constructing crucial elements of the Ethereum (ETH) ecosystem.
As token sales have become more popular, a new generation of blockchain ventures has developed business models based on payment tokens within networks, frequently building two-sided marketplaces and necessitating a native token for all transactions. The assumptions state that as the network’s economy expands, there will be greater demand for the restricted native payment token, raising the token’s value.
Using a token to build communities, businesses, and initiatives may only sometimes be able to distribute profits to token holders immediately. For instance, one of the features of the MakerDAO (MKR) and Binance (BNB) tokens that attracted a lot of interest was the concept of token burns and buybacks. As money enters the project (via MakerDAO stability fees and Binance trading fees), native tokens are repurchased from the open market and burned, causing a reduction in quantity and a gain in price.
The establishment of the financial framework for these native assets, including exchanges, custodians, and derivatives providers, was the focus of the subsequent generation of business models. They were all developed with the same objective: to offer customers services so they could speculate on these dangerous assets. Organizations like Coinbase cannot secure a monopolistic position by offering “exclusive access” since the underlying networks are open and permissionless. However, over time, such companies’ branding and liquidity offer defendable moats.
What Benefits Does Web 3.0 Have Over its Forerunners?
User data won’t be under control in Web 3.0 because intermediaries are no longer necessary. This reduces the possibility of corporate or governmental censorship and the potency of denial-of-service (DoS) assaults.
As more products are connected to the internet, larger databases provide algorithms with more data to analyze. This will enable them to provide users with information that is more precisely matched to their needs.
Before Web 3.0, locating the most accurate result on search engines was challenging. However, Vitaliy Dubinin believes they have become better at identifying semantically relevant results based on search context and data over time. Web browsing has become more practical, making it easier for everyone to find the precise information they need.
A successful user experience on websites and web applications depends on customer service. However, many prosperous web companies cannot scale their customer care operations because of the high costs. Using intelligent chatbots that can converse with multiple customers at once, which is feasible by Web 3.0, users may interact with support staff more effectively.