What every entrepreneur needs to know about Web3

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You almost can’t escape the surrounding buzz NFT, cryptocurrency and Web3. Some say these technologies will revolutionize all aspects of society. Others say it is a chimera.

Since the majority of entrepreneurs are not technology-focused, it can be difficult to understand Web3 and what the means for your business, especially when it is still in the making.

If you have no idea what Web3 is or why it’s important, you’re not alone. The term was coined by Ethereum co-founder, and it’s actually quite vague. But, enthusiasts of the subject say that Web3 is the future of and there are two main ways to define it.

Related: Why Web 3.0 will radically change the current state of the attention economy

The future potentials of Web3

A potential future of Web3 is a Blockchain-integrated Internet. Cryptocurrencies and NFTs will be integrated into the platforms we use daily.

Now, blockchain is another hot topic that can lead to question marks for entrepreneurs. Simply put, a blockchain is a digital ledger. It organizes information into a publicly visible digital chain of “blocks”. This is what cryptocurrency is based on. However, it could potentially be used for a wide variety of applications.

The second potential future of Web3 is a bit more controversial and complex. Enthusiasts say Web3 will lead to a decentralized The Internet belongs to users rather than companies. Blockchain and its many applications could help provide such a future. But critics say the same has been said about the cryptocurrency itself, and it has so far fallen short.

Cryptocurrency was created and branded as a way to give individuals power over their own finances. So far, rather than revolutionizing the world of finance, it has become a class of high-risk speculative investment with no consumer protection. Rather than promoting fairness, the world of cryptocurrency and NFTs is plagued with scams and unpredictability.

As a single bitcoin costs more than most Americans earn in a year, there are certainly questions to be asked about who exactly cryptocurrency gives power and financial freedom. But keep in mind that even though we’ve been in the crypto business for several years, it’s still a relatively young industry with plenty of room to grow.

Related: 3 Reasons The World Never Goes Back To Crypto

What does decentralization mean?

According to some Web3 proponents, the Internet is currently owned by a small handful of companies. Think of large corporations like , and . They call it “e-feudalism”. Essentially they claim that we are all “digitally working” on the virtual properties of and other .

Web3 is the solution, they say, returning the power to its users. Here’s a look at how a hypothetical decentralized could look like: rather than undergo an IPO, the platform would create cryptocurrency tokens and then release them to early adopters. People would be rewarded for going viral or for using the platform with tokens, which could potentially also serve as governance tokens. Users can use tokens to vote on important platform decisions, content moderation, and other large-scale policy issues.

Essentially, instead of a company deciding how a platform works and users living with the impact of their decisions, users will collectively set the rules.

Wait, what happened to Web1 and Web2?

To some it may seem like we went straight from zero to three. Fortunately, Web1 and Web2 are much easier to understand than Web3. This is partly because Web3 is still largely speculative, while the first two have already materialized.

Web1 is the first iteration of the Internet when your computer practically yelled at you every time you went online. Think of the slow, static web pages of the 1990s. The Internet back then was primarily used to digitize and share existing media, like books, magazines, and newspapers. In the late 90s the blog was born, and for internet savvy people it was a new opportunity to interact with the masses.

Web1 also ran on an open source protocol. This is something that Web3 evangelists want to come back to.

The evolution of Web2 began in the early 2000s when the Internet began to become read/write on a larger scale. It had grown from a place where the average user logged in to browse content to an accessible platform where more users could create, share and store unique information, photos and videos.

Encompassing the rise of sites like (now Meta) and this era finally gave birth to transformations Technology such as e-commerce, social media and the content creator economy.

Web3 proponents essentially want to deliver the complexity of Web2 with the community-governed open-source nature of Web1 – via blockchain technology.

Related: Making Sense of Noise in Web3

Web3 controversies

There are a lot of ideological and practical fights around Web3. Some, like , say it’s just a buzzword right now. However, he does not rule out his future.

Critics say that incentivizing users to take digital action with tokens could create a situation where bad faith actors seek engagement at all costs. However, it could be argued that even without tokens, many social media users are already doing so. This may just be a side effect of heavy internet usage.

Apart from philosophical questions, many have questions about the feasibility of a decentralized modern internet built on blockchain. Ethereum, on which many potential Web3 projects are based, is incredibly inefficient.

It has a high environmental cost and is expensive to operate on a large scale. This means that for many small businesses, adopting it just isn’t possible right now.

While many are working to build applications on top of Ethereum to make it work better, some critics wonder why we are devoting resources and talent to solving the vast problems of such an ineffective foundation.

Additionally, a key feature of blockchain is that it stores information publicly, so all users can see it. In some cases, this is a useful innovation; however, in some applications, allowing everyone on the network to see anyone’s complete transaction history would be a disadvantage – and it could even be dangerous.

Related: From Web 2.0 to Web 3.0: how these entrepreneurs made the leap

What does Web3 mean for your business?

At present, Web3 is largely hypothetical. This means no one is exactly right or wrong about it. We don’t know yet what it will be, or if it will be anything.

Some say it will create an equitable, community-governed digital future. Others, like the old CEO Jack Dorsey, say that it will simply lead to an alternate centralized authority.

Some malicious actors use these futuristic buzzwords to harm people. For example, the British Army’s social accounts were recently pirate to promote fraudulent NFTs. According to a FTC ReportAmericans have lost over $1 billion to crypto scammers this year alone.

As a business owner, it is essential that you have a basic understanding of the potential of Web3, so that you can make smart decisions to take advantage of all technological advances and avoid the pitfalls of being swept away by the hype. media.

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