We are sure you’ve recently seen terms like the Metaverse, Cryptocurrencies & NFTs everywhere. Maybe you’ve even heard of the recent crypto disintegration related to Web3. These are all aspects of Web3—the third generation of the evolution in web technologies. The hype is real for Web3, but what is it, and how does it impact us today?
Web3 is the evolution of current web technologies that we call Web2. To understand Web3 we need to know about its predecessor i.e., Web2.
What is Web2? Simply put, Web2 is the current state of the internet. It provides users the ability to create content, is user-friendly, promotes a participatory culture, and offers compatibility with other products, services, and devices. These are huge changes to the internet since its initial iteration, where users mostly viewed content passively.
Web2 is based on centralized technology platforms, meaning large companies primarily hold the power and control in managing, releasing, and creating new services and information online.
Web3 works around the idea of centralized power by “Big Tech” on the internet, allowing users full autonomy and ownership over their data and distributing and disaggregating control of data and services from Big Tech. This decentralization of data is one of the primary goals of Web3.
The current form of Web3 is implemented using Blockchain protocols, which allows users to have safer and more personal interactions on the web. Blockchain is a shared database that stores information on several different nodes across the network rather than in one central database. This allows for different copies of that data to be stored in those nodes that can cross-reference each other, eliminating the possibility of losing that data by storing it in a central source - whether that be corruption, malicious data purges, or any other external factors.
Information on the blockchain is stored in blocks, that when filled, are given a unique timestamp and connected to the last block on the chain. All blocks are immutable and irreversible - meaning they cannot be changed after being added to the blockchain. This allows for a level of transparency and integrity that we have yet to see with current Web2 technologies.
Blockchain also allows user assets to be decentralized, giving users full ownership over their data, and identity, and reducing the threat of large data breaches. Users can also act as Web3 “shareholders” by owning protocol tokens and cryptocurrencies. Technologies such as Blockchain, AI, Machine learning, 5G, and Virtual / Augmented Reality are all pushing the growth and interest in Web3’s future capabilities.
Web3 removes “gatekeepers” like big tech companies and governments that can leverage control of online technologies, spaces, and data. With the rise of interest in Web3, we see several new technologies emerging from this unique digital space.
For further learning about the basics of Blockchain see this visualization by Goldman Sachs.
Compared with Web2, the scope of products available for Web3 is currently quite limited. We see the adoption of the technology by artists and creatives, adapting their artwork into NFTs (Non-Fungible Tokens). For those that are unfamiliar, NFTs are digital token on the Blockchain that proves user ownership of a specific piece of art. Artists can set the price for the artwork (specific amount or cryptocurrency) and every time it is sold, they will receive a percentage of the sale.
Although you could easily download an image of the artwork, that’s not the point of owning an NFT - the ownership is what’s important - making these tokens similar to any other kind of collectible or asset. The concept of NFTs is quite polarizing: creators are on board with the idea because it provides them autonomy over their artwork and sales. However, there has been some pushback due to environmental and energy concerns, as NFTs and some cryptocurrency platforms have high levels of energy usage and carbon emission.
We also see interest in online shopping incorporating Blockchain technologies, as it would bring more secure transactions, new services, and new methods of buying and selling. With Mark Zuckerberg’s push for Metaverse, we see digital twins becoming more prevalent. Metaverse introduced luxury designers Balenciaga and Prada into their avatar store - allowing users to purchase digital versions of their branded clothing for their in-game avatars.
Bitmama, a Nigerian-American company, is taking innovative steps to use Web3 technology to solve real-world problems. After the devaluation of Nigeria’s currency (CBN) in 2020, cryptocurrency use increased by over 1,200%. More recently, local bank cards were limiting customers to spending $20 a month for international purchases.
To help remedy these economic and payment issues, the Bitmama team created Changera. Changera allows users from anywhere on the planet to pay bills or send money to their families locally or abroad through their platform. They also allow for virtual cards that enable Nigerians to circumvent these local spending limits.
In 2019, the team here at Perpetual made it to the NYC BigApps finals for our BlockChain app, PowerChain. The goal was “to find lasting blockchain solutions to some of the City's most pressing challenges” in different sectors—ours being energy. PowerChain incentivizes citizens to track their personal energy usage through a survey and receive rewards in the form of PWRNYC tokens on the Ethereum Blockchain. This could be scaled to measure citywide power usage and measure the personal effects of energy usage, something NYC has a huge problem accurately quantifying. You can learn more about our experience with PowerChain and NYC BigApps here.
Gamifying personal energy use via PowerChain could solve two key problems—citizen engagement and the ability to accurately measure environmentally friendly zones' impact over time. Storing this data on the BlockChain would allow for a transparent and immutable record of our environmental impact in NYC. This program could also be expanded via local or state government programs to provide additional benefits to token holders or individuals with high scores. Perpetual placed in the Top 3 in the energy sector with PowerChain.
Starbucks has recently unveiled its plans for Starbucks Odyssey. Odyssey is an extension of their rewards member & partner programs leveraging web3 blockchain technology. Members will have the ability to earn and purchase digital collectibles that will “unlock new benefits and immersive coffee experiences.” Adding a unique digital environment and community for rewards members to access makes Starbucks one of the first industry-leading companies to utilize web3 technologies to scale.
As we can see, the practicality and intrigue of Web3 are gaining more attention from large companies. Companies are leveraging these technologies to create unique online communities and solve large-scale issues. We can only assume the market for digital products will only grow in the coming years as Web3 catches on to the mainstream.
Several other Web3 apps are available such as:
It’s hard to say at this stage. While Web3 innovations are hyped and exciting, new technologies are appearing all the time, making it difficult to know what will last the test of time. Web3 however is seeing outsized hype. We have some insights on mainstream core technology adoption of Metaverse, Web3, and Crypto from Gartner.
As we see the fragmented adoption of some Web3 technologies over the past few years, we see cryptocurrencies gaining attention from companies in the financial sector. From this, we can infer that they will likely garner mainstream adoption in the next few years.
While it’s difficult to predict the future of Web3, it seems like we are moving in the direction of a more decentralized internet. We can expect users to only gain more interest in the protection and freedom that Web3 offers. Some other Blockchain technologies that are already receiving some attention and can expect to see more wide use cases are Blockchain Wallets, Smart Contracts, and Tokenization.
Please read the Gartner article for a more detailed breakdown.
With 2021 setting the record for the largest extent of Web3 growth, we can believe that Web3 developers’ needs will continue to grow as adoption and interest in Web3 grows. DApps, or Decentralized Apps, are an integral part of a Web3 Developer’s toolkit. DApps can perform the same functions and use many of the same languages as Web2 Apps would—but include Blockchain and Web3 functionality.
DApps differ from regular Apps in that they are decentralized, use smart contracts, are censorship-resistant, and provide immutable and transparent systems of accounting and transactions. DApps have a unique economy through the use of Blockchain, cryptocurrencies, and tokens.
Developers have access to a good selection of tools to create rich DApps. There are solutions and protocols which enable communication across many different chains (Ethereum, Hyperledger Fabric, etc.) and APIs such as Alchemy to obtain pre-determined chain data such as tokens held or specific balance on an account. There is a wide variety of available platforms providing authentication, account sync, email delivery, or use of web sockets on your front end such as Moralis, Alchemy, Questbook, and Ceramic Network. Developers can create smart contracts using Solidity, the most popular language for writing smart contracts.
The Perpetual team created a Web3 proof-of-concept that allows showcasing of typical tools and components that can be used to create a Web3 App.
The app allows users to log in via their MetaMask wallet and see the breakdown of their portfolio. More specifically, we see a breakdown of the user's digital wallet, detailing any transactions, and any cryptocurrency or NFT balances on the Ethereum Blockchain. Essentially, a dashboard for your digital wallet. Please take a look here if you’re interested.
Note: you must have and allow a connection to your MetMask wallet for the Demo.
If you are a business who wants help building a Web3 application, we can help you build your vision.
