Web3: Meeting the Next Billion Users - The Road Ahead

Recent geopolitical events have polarized the world. Partisanship and ideological battles have further divided the internet, and its gatekeepers have trampled millions on access to financial services. Nations are slowly waking up to the reality of having neutral agreements and national stacks.

Hailed as the next generation of the Internet, Web3 will be sanction-resistant and have no data silos. Gavin Wood, co-founder of Ethereum and creator of Polkadot and Kusama, coined the term Web3 in 2004. Five years later, the Bitcoin (BTC) white paper was released in 2009, further cementing the need for decentralization. Will decentralized narratives continue? Let's take a look at why Web3 is getting where it is today.

Web3: The role of decentralization in the innovation economy

Web3 can provide a global digital track to help innovation and independence. Calls to topple Big Tech have fueled the discussion around Web3. Big tech's dominance of the internet and its control over personal data has fueled calls for its decentralization. A16z, a well-known venture capital firm in Silicon Valley, published its policy document "How to Build a Better Internet: 10 Principles for World Leaders to Shape the Future of Web3". It states that data ownership and monetization will lead to newer business models in the Web3 era, arguing that:

"The world deserves technology that provides opportunity to the millions of people on the margins of the innovation economy and empowers people to take control of their digital lives."

The basic premise of the Internet is to connect people. The Internet has evolved over the past 30 years, and so has our interaction with it. Nevertheless, the era of online communities can be roughly divided into three periods: Web1, Web2, and Web3.

"Privacy is necessary for an open society in the electronic age," said Eric Hughes, an American mathematician and founder of the cypherpunk movement. He highlighted the importance of privacy and how it is even more important in a decentralized internet. The current Internet, Web2, reeks of a tech monopoly; Facebook, Amazon, Apple, and Google now own and rule the Internet.

Proponents of Web3 call for the future of the internet to be built on the overriding principles of decentralization, self-sovereignty, data ownership and resistance to censorship. The core idea of Web3 is a decentralized Internet infrastructure designed to ensure personal privacy.

Web3 has not yet reached its full potential. At this point, the idea of individuals exercising full ownership of their own data and privacy seems rather dystopian, as adoption is trivial and limited to crypto-savvy individuals. In the Web3 space, there is a need to address entry-level friction.

Web3 adoption

In a truly decentralized economy, the lofty ideal of ownership can only be realized if tools and complementary infrastructures are created that are compatible with Web2 and Web3. Adoption of Web3 is still in its infancy, although some Web2 companies have gradually begun to migrate to Web3 and begin to embrace decentralization. We need to build easy-to-use supporting services and infrastructure to ensure that users can seamlessly enter the Web3 era. To achieve all this, we still have a long way to go.

The idea of portable digital identity and ownership on the Internet depends on easy-to-use Web3 wallets for everyone, including non-native crypto users. Certificate management and digital asset custody are the missing links limiting Web3 adoption. A composite wallet allows users to identify themselves in physical and digital realms, store credentialed digital assets (such as NFTs), secure payments, pledge, etc., which are currently required. The current fiat-to-crypto and crypto-to-fiat services for users are far from satisfactory, and this needs to be addressed from a user experience perspective to achieve mass adoption.

Web3 and the Ownership Economy

Web3 will bring about a paradigm shift in the way people in online communities use technology. The creation and distribution of value will no longer be at the mercy of centralized decision makers, and decentralized groups will enable new forms of ownership and co-creation.

Gaming is already a $200 billion industry in 2021, and this is the way forward for getting users into the Web3 ecosystem. Emerging gaming markets such as India have more than 450 million players. The low per capita income in emerging markets creates huge opportunities for players to earn income through blockchain games.

Financialization-first Web3 games are poised to grow further in the long-term. Web3 is at the heart of the discourse, focusing on creators and the ownership economy. A recent JP Morgan report, Opportunities in the Metaverse, highlights the importance of single-wallet user experience in Web3 and Metacommerce. According to the report, a wallet should include the following:

• Web2 traditional financial payment rails, digital currencies and digital assets.

• Web3 cryptocurrencies, NFTs and digital assets.

• Digital identity verifiable certificates, KYC and AML compliance keys, and reputation points.

• Multiple aliases for privacy and digital freedom.

Tools and services based on privacy protection and self-sovereignty are indispensable to fully realize the potential of Web3 and seize the trillion dollar opportunity in the metaverse. An enhanced user experience is critical to the mainstream adoption of Web3.

Cointelegraph Chinese is a blockchain news information platform, and the information provided only represents the author's personal opinion, has nothing to do with the position of the Cointelegraph Chinese platform, and does not constitute any investment and financial advice. Readers are requested to establish correct currency concepts and investment concepts, and earnestly raise risk awareness.