Get ready! A novel and historic game-changer appears to be bursting onto the scene. It involves the internet’s next significant iteration known as Web3. Given the pervasiveness of the internet in business operations and in, well, life in general for most of us, it may be wise to pay attention to what Web3 is and what it may portend for our employers, customers, and our careers.
Depending on who one talks to Web3 is either a blossoming of monetary liberation ushering in new economies and with them original products, services, and currencies or it is a high risk Wild West of over-speculation, thievery, and privacy loss. Those who see its utopian potential, claim the web will be more democratized (Oh-oh. Haven’t we heard that one before?) with critics warning against an increasingly unaccountable centralization of wealth, information, and therefore power.
The original internet of the 1990s and very early 2000s was essentially a vast digital clearinghouse of fixed and stable documents that became available to a much wider audience than ever before. This was followed by Web 2.0, which allowed user to user interactivity, hence the development of social media, crowdsourcing, content creators left and right, and for better and worse, the web we know today.
What makes Web3 so different is that it rests on blockchain technology. If it is known at all, blockchain is the architecture which makes cryptocurrency possible. In short, blockchain is a distributed database comprised of digital data arranged in chunks or blocks that are linked immutably to previously created blocks across multiple servers leaving a sequential record of unedited transactions. These chains of data blocks are distributed across a global computer network not controlled by any corporations, but only by individual users or their techie proxies, known as miners, rendering the blockchain decentralized, secure, and trusted. Or so we are being told.
What is paradigm shifting about this model is that data transactions supersede governments, corporate business, or any legal centralizing organization. Crypto has given us an opportunity to imagine and experience non-governmental currencies. The time is now here to speculate about how this standard can be applied to other products and services.
One area growing in popularity involves the generation of communities of users who share the value of a commodity of some sort. Blockchain enables the use of non-fungible tokens or NFTs, which are digital units of ownership. These NFTs can be used to purchase, exchange, or trade in art, media, gaming premiums, or any set of items, physical or not, which are deemed valuable by the members of an esoteric community.
With all communication and transactions encrypted real-world identities are hidden. One is known only by their code. Allegedly, one does not have to know or trust others in the community to conduct transactions with them. The rules of the game are so hard-wired into the technology, security is assured.
Entrepreneurs are already starting to have a field day with this paradigm. Yuga Labs launched the Bored Ape Yacht Club in 2021. It is an NFT collection utilizing an open source blockchain. The commodity of value, believe or not, is a set of algorithmic generated ape cartoon profiles, which when owned, can be used for creating art or media projects. Sales this year have totaled $1B. You don’t get it? Either do I.
Established companies are starting to see that something is going on here. Microsoft and others are accepting cryptocurrencies as payment. Nike and others are encouraging collector communities using their brands. The concept of alternative virtual worlds with their own economies and players is catching on. Careers will be formed here that old schoolers like me cannot at all imagine.
How much of Web3 is hype vs. hope has yet to be seen. It seems that some kind of Brave New World is always just around the corner now that the future is here to stay.