How Do You Really Define Web3?

essidsolutions

Contrary to prevailing views, Web3 is more than just blockchain, NFTs, cryptocurrencies and metaverses. Dr. Christian Kaul of Impossible Cloud discusses why dispelling these misconceptions is vital before Web3 technology can take off and show its real game-changing potential.

The next evolution in digital infrastructure is imminent, but the vantage point of many incredibly insightful people is obscured. I’m talking, of course, about Web3.

I’ve recently spoken with dozens of leading technology analysts and journalists. While many were quite familiar with Web3, they still view it as inextricably tied to blockchain and cryptocurrency – but I believe this is not true.

Similar misperceptions about Web3 are widespread and extend far beyond the scope of a few experts. In fact, 58%Opens a new window of Americans in a recent survey view it as a fleeting trend or a niche development that will benefit only a few.

Yet, despite overarching concerns and misperceptions, Web3 is projected to soar to $81.9BOpens a new window in commerce by 2032 and is ready to transform how we capitalize on the cloud and countless other technologies.

Neither is Web3  the same as crypto and blockchain nor is it dependent on either. Clarifying this confusion is vital for this new technology to take off and show its real promise.

So, that brings us to our question: How do you really define “Web3?”

Defining Web3: It’s About Decentralization

Web3, short for Web 3.0, refers to the next generation of the internet as a fully decentralized environment where users maintain control of their own data and interactions. It is the next phase after Web 2.0Opens a new window , which has been characterized largely by user participation and cloud computing under a centralized data storage architecture.

A handful of the largest Web2 companies, like Amazon, Alphabet and Microsoft, essentially control the market for cloud storage services. In what some deem an oligopoly, these three companies capture 65%Opens a new window of the world’s cloud market, with the dependency in some markets reaching nearly 80%.Opens a new window

Under Web3, applications and platforms are not controlled by a single entity but are free to leverage multiple previously and potentially underutilized infrastructure nodes in a network. Web3 technology enables this decentralized network to be used sensibly, something that wasn’t possible at scale a few years ago.

By decentralizing the web, essentially an IT infrastructure network connected by key cloud-enabling technologies, Web3 can tackle the problems posed by excessive centralization by offering greater flexibility, efficiency and control among many users.

This means freedom for IT infrastructure providers to compete on pricing – which could help create a hypercompetitive marketplace and a sharp decline in end-user prices. Freedom from the privacy risks and business challenges posed by dependence on an oligopoly of a few vendors. Freedom for the operators of Web3 enables technologies to launch and maintain solutions with low capital expenditures, further decreasing barriers to innovation.

Unpacking the Imperative Transition to Web3

Prominent consumer use cases like NFTs and metaverses only represent just the tip of the iceberg of Web3’s burgeoning potential.

In a Web3 model, the storage location and ownership of data are decentralized. This means it’s possible to store data more efficiently and closer to the edge and potentially still offer analytics or computing services on top. These services could be delivered at decreased latency, most likely for lower prices, and without the burden of owning or managing hardware or relying on a single provider’s proprietary infrastructure in giant data centers far away – a fundamental shift from Web2.

With Web3, companies can gain the benefits of Web2 innovations like cloud computing without the vendor lock-in that plagues the Web2 landscape. And the time is ripe for this change.

In the current Web2 model, dominant legacy providers have built their businesses to benefit from the centralization of resources. These companies can dictate pricing propelled forward from what some call “data inflation” – the ballooning of data under just a small handful of roofs, increasing the market, pricing and power of the few.

Thanks to data inflation and centralization, overly complex pricing schemes have become so commonplace that today’s users often don’t question them. For instance, the pricing pageOpens a new window for AWS simple storage, which is used by millions, reveals no less than five different tabs with dozens of options on each and a pricing calculator to “help” you understand the mess. Egress fees and API calls are common hidden costs that impact enterprises more and more each year. There really is no need for this complexity.

The fact is, too much centralization generates a below-the-radar profit engine for U.S.-based tech giants, which likely contributes to the fact that as much as 81% of IT teams have been directed to manage cloud spending, while at least 50%Opens a new window see complex cloud pricing as a top challenge to controlling cloud costs.

If given a chance, a decentralized internet could be a way to lower costs, improve performance, unlock innovation and put underutilized computing assets to work.

Separating Web3 from Crypto and Making It Work

When Gavin Wood, co-founder of one of the largest cryptocurrencies, Ethereum, and others popularized the term Web3, cryptocurrencies were beginning to emerge as one application demonstrating the potential of a decentralized version of the web. Now, many other use cases have arisen, and while blockchain and cryptocurrencies can indeed be useful, decentralization does not require these technologies.

So, back to my earlier point: Decoupling Web3 and its benefits of decentralization from uniform association with crypto is vital – because most people and organizations still use cash or fiat currency to conduct transactions. This decoupling can easily be accomplished by enabling organizations to transact using fiat currency over Web3 infrastructure.

Many established corporations may be reluctant to be first-movers of a technology framework yet to be widely adopted. For many Web3 solutions to be viable, they must be tailored for the business world, just like any other solution.

For instance, 83%Opens a new window of CIOs must achieve more with less. Therefore, from what I’ve found in dealing with other businesses, many require solutions that are easy to integrate with other products and which provide immediate benefits without forcing companies to rip and replace existing technology stacks overnight.

Additionally, 7 in 10 organizations say compliance has a ‘moderate’ to ‘extreme’ impact on their IT department’s operations, while cybersecurity has become a $2 trillionOpens a new window market.

With no central point of failure, decentralized infrastructure can be a key tool in the fight against cyber threats — but to be viable in many cases, these solutions must be highly compliant with enterprise-grade standards and privacy regulations that are often tied to specific regions or industries, like GDPR in Europe.

Not surprisingly, another observation I’ve gleaned from discussions with enterprise and SMB executives is that they like simplicity. According to a recent survey, 77%Opens a new window of workers wish they had more access to low-code tools. Therefore, it stands to measure that tools that empower business users or provide flexibility and ease of use have a greater chance of widespread use.

See More: How to Build Tech and Career Skills for Web3 and Blockchain 

The Business World Is Ready for Web3

While Web3 continues to grow, there is an increasing appetite for innovative solutions that are cost-effective, simple to use and practical. Supporting this, 89%Opens a new window of workers across industries believe adopting emerging technologies is beneficial, while 94% of tech executives plan to invest more in IT or emerging technologies.

For those of us not tied to the Web2 universe, this presents a massive opportunity to unleash the ability of Web3 by embracing its potential to improve business operations worldwide.

How are you embracing the potential of Web3? Share with us on  FacebookOpens a new window , TwitterOpens a new window , and LinkedInOpens a new window . We’d love to hear from you!

Image Source: Shutterstock

MORE ON WEB3