Web 3.0 is the future of the internet, where users own their data. It is fully decentralized and public, existing solely on the blockchain. Leveraging Web 3.0 has several benefits and is an excellent tool for startups looking to enhance operations. Position yourself for the future with these valuable tips.
Web 3.0 is known as the third generation of the internet. It’s also called the future of the web. This is a decentralized evolution of the internet that exists on blockchain technology. Thus, the concept of Web 3.0 is still emerging and has yet to be implemented.
Either way, the new technology could prove to be helpful, especially for startups. However, understanding what it is and how it works is crucial. What are the pros and cons? How should startups leverage web 3.0 technology? Here is what you need to know.
Table of Contents
#3. Artificial Intelligence and Machine Learning
How Should Startups Leverage Web 3.0?
#2. Allow for Interoperability
#3. Harness Blockchain Benefits
#4. Build a Community Around Your Cause
#5. Allow for International Dealings
#2. Open Accessibility and No Restrictions
#3. Not Ready to Implement Yet
Positioning Your Startup for Web 3.0
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What is Web 3.0?
Web 3.0 is the newest internet iteration that leverages machine learning, artificial intelligence (AI), and blockchain technology. It is fully decentralized, so users have complete control and ownership over their data. There are also these four defining features of Web 3.0:
- Open
- Trustless
- Permissionless
- Accessible
#1. Open
Web 3.0 is developed with open-source software created by a community of developers. Something unique to Web 3.0 is that the development happens publicly. This means anyone can see what’s happening on the backend, making it more transparent than its predecessors.
#2. Trustless
Web 3.0 allows users to interact publicly and privately without risk. There are no larger entities asking users to “trust” them with their data or agree to any specific terms. This is a new exclusive feature that allows users to be in control of their online data at all times.
#3. Permissionless
No massive company or corporation controls how users interact. This means users can engage whenever and however they want without permission. This is also part of the decentralized nature and why it attracts many people.
#4. Accessible
IoT is the name for network-enabled devices, excluding traditional computers and smartphones. This includes Wi-Fi connections, Bluetooth connections, intelligent appliances, smart speakers, and wearable technology like Apple Watches.
This tech is widely accessible to anyone, anytime, and from anywhere. It can also expand the availability of the internet beyond just smartphones and computers as part of the Internet of Things (IoT) technology movement.
Evolution of The Internet
The internet had to evolve to get to the conversation of Web 3.0. To fully understand the evolution of the internet and how we’ve progressed to Web 3.0, it’s essential to understand its predecessors: Web 1.0 and Web 2.0.
Web 1.0
Web 1.0 is also called the read-only web, meaning people could only interact with the web by reading what was published on web pages. It began in 1989 and lasted until about 2005, and its primary use was finding information. Web 1.0 sites were static, so users could not communicate online. That was until the internet evolved into Web 2.0.
Web 2.0
Web 2.0 began emerging in 1999 and became popularized in 2004. Web 2.0 involves shifting from static web pages in Web 1.0 to more interactive, user-created content. This includes social media platforms and other online services. Web 2.0 was also mainstream when mobile internet access came onto the scene.
Around 2012, the term “Web 3.0” began gathering attention. The internet and much of its services were controlled by tech giants like Facebook, Apple, and Google. Data security is a significant concern for users with so many massive corporations. Thus, the trend led to the need for decentralized web platforms.
How Does Web 3.0 Work?
Web 3.0 is built on the blockchain with decentralized apps or DApps, essentially blockchain-based applications powered by smart contracts. Several layers and properties of Web 3.0 come together to make it what it is. Some of those primary layers and properties include:
- Semantic web
- 3D graphics
- Artificial intelligence and machine learning
- Edge computing
- Decentralization
- Blockchain
#1. Semantic Web
The semantic web and Web 3.0 are often used interchangeably. The concept of the semantic web is about making internet data machine-readable. It’s meant to aid in teaching the computer what the data means. AI then comes in to develop real-world uses for the data.
The semantic web concept helps Web 3.0 facilitate more data communication across the internet. This allows the user experience to improve and generate more connections and opportunities to take advantage of accessible data.
#2. 3D Graphics
Web 3.0 will be a more realistic, three-dimensional cyberspace than the simple 2D nature of Web 2.0. It will use 3D design across the board, from e-commerce to online gaming.
#3. Artificial Intelligence and Machine Learning
AI and machine learning are two of the main facets of this new tech. These algorithms are precious when looking to improve user experience online. They are especially vital in today’s landscape, where the internet is open to input from the public.
For example, say you’re shopping for something on Amazon. You might read the customer reviews to see if the product is right for you or holds true to its description. Sometimes, companies will pay for bot reviews to positively rate their product to drive more sales. However, these reviews aren’t genuine and can be misleading.
AI and machine learning have advanced to the point where they can decipher between genuine and fraudulent reviews. This can help prevent customer manipulation.
#4. Edge Computing
Edge computing is the concept of processing, analyzing, and storing data closer to its original source. This provides faster, almost real-time responses. The expansion of data centers and computing resources in Web 3.0 is distributed among phones, laptops, appliances, and even cars. That allows more production and consumption of data.
#5. Decentralization
One of the main attractions of Web 3.0 is the fact that it’s decentralized. This means users are the sole owners of their data. They don’t have to worry about tech giants like Google, Apple, and Facebook tracking their activity and sending targeted ads.
#6. Blockchain
The blockchain is the foundation of Web 3.0, as it’s where the new network is hosted and maintains its backend structure. Blockchain’s smart contracts define the operations and describe how applications run. This helps them keep their decentralized nature.
How Should Startups Leverage Web 3.0?
Web 3.0 is still emerging, and it’s certainly not free of challenges. However, it’s a terrific tool for startups to leverage. The reason is that 3.0 platforms can modernize online operations and position companies for future economies.
Suppose startups begin leveraging Web 3.0 to build and improve their operations. They may be better positioned for long-term success, especially as the internet and the digital world continue evolving. Here are five ways startups can enhance themselves with web 3.0:
- Keep data secure
- Allow for interoperability
- Blockchain benefits
- Build a community around your cause
- Allow for international dealings
#1. Keep Data Secure
Data security is a significant issue for individuals, startups, and businesses. You want to ensure that your organization and its members are safe from potential hacks and cyberattacks. This new update makes that possible.
Users own their data, and the blockchain allows for a well-protected online experience that significantly lowers the risk of security issues surrounding data. Operating on Web 3.0 is the most efficient way for startups to ensure data security and reduce risk while conducting business online.
#2. Allow for Interoperability
Web 3.0 functionality spans multiple devices and platforms, allowing access anywhere from practically any device. This can be valuable for startups because it means that clients and members of the organization will be able to access information at any time. They can connect and exchange information constantly, resulting in higher performance and productivity.
#3. Harness Blockchain Benefits
When startups leverage Web 3.0 and exist on the blockchain, it can enhance operations. The blockchain is a public space with virtually no barrier to entry. It allows your organization to reach more diverse people than if it just existed locally in a brick-and-mortar space.
Because it’s based on the blockchain, it also uses smart contracts. These smart contracts operate like real ones and outline your organization’s terms and operations. The blockchain is a public space so that everyone can see these smart contracts. This allows your startup to have a significant amount of transparency. Anyone can see what your startup is doing and how, whether they’re a part of your organization.
Transparency is beneficial because it can set you apart from larger, more traditional businesses that are typically more private and reserved with their operations and dealings. When people can see everything about your organization, they can vet it for themselves and determine whether or not they want to be involved.
#4. Build a Community Around Your Cause
When startups operate on Web 3.0, they typically develop a token system, a cryptocurrency specific to the organization. People can buy tokens, giving them voting rights in the organization.
This is a large part of the decentralized aspect of Web 3.0. There isn’t one powerful executive making all the decisions. Instead, power is divided among token-holding members.
Now, power can be unbalanced. In most cases, the more tokens you own, the more weight your decisions carry. Even still, this method of operating is still more decentralized and equal to most traditional businesses.
By running on Web 3.0 and developing a specific cryptocurrency, you build a community around your startup. The people who buy in are interested, believe in your cause, and create a community around it.
Because all of this happens online, it’s likely happening much quicker than in a more traditional, in-person setting. This will quickly expand and advance your startup and allow you to reach goals much faster.
#5. Allow for International Dealings
Your startup could reach far beyond your geographic area because the blockchain is public, and Web 3.0 is accessible. By leveraging it, you could gain angel investors and members worldwide. This typically isn’t possible in traditional operations. By not utilizing Web 3.0, your startup could be missing out on both exposure and new members who could help elevate your cause.
Pros of Web 3.0 for Startups
Web 3.0 is still a new concept that hasn’t fully taken over yet. There are certainly pros and cons to keep in mind. There are several benefits to getting on board for the future of the internet and pursuing Web 3.0. Some of which include:
- Data privacy and control
- Open accessibility and no restrictions
- Transparency
- Enhanced data processing
#1. Data Privacy and Control
In Web 3.0, you own and oversee all your data. There is also data encryption that protects your privacy and any sensitive information. This prevents tech giants from tapping into your personal information or data history.
#2. Open Accessibility and No Restrictions
Web 3.0 is accessible from anywhere at any time. It has the power to expand data collection and interaction on the internet. It’s also a worldwide platform, bringing in users from across the globe.
Because Web 3.0 and the blockchain are so openly accessible, users can’t be restricted on the network based on gender, income, location, or other factors. This means they can transfer wealth and assets anywhere with no interference.
#3. Transparency
Everything that happens on the blockchain is public, meaning everyone can see it. This yields transparency that isn’t typical in any other traditional business environment.
Transparency helps build trust and can attract new members and angel investors to your startup.
#4. Enhanced Data Processing
Advanced AI and machine learning make Web 3.0 a more enhanced data processing platform. It can sift through more data more efficiently, which improves productivity and overall satisfaction.
Cons of Web 3.0 for Startups
The novelty of Web 3.0 comes with a few disadvantages that are important to consider before launching a startup on the platform. Some of which include:
- It’s complicated
- Needs advanced tech
- Not ready to implement yet
- Difficult to regulate
#1. Complicated
The concept of Web 3.0 is very complex. There are many moving parts and buzzwords to learn. It can be challenging for many people to understand, especially those unfamiliar with the technology. Because of this, there will likely be several people who refrain from adopting it. This means there could be groups of people your startup is missing out on if you’re Web 3.0 exclusive.
#2. Need Advanced Tech
To access Web 3.0, you’re going to need more advanced technology. Outdated phones and computers will most likely not be able to tap into Web 3.0. This means that those without efficient tech won’t be able to access the platform or your startup.
#3. Not Ready to Implement Yet
While Web 3.0 is referred to as the future of the internet, it’s not entirely ready to be implemented on a large scale yet. There is work to be done in technology advancements and laws around privacy and data usage before it can fully launch.
#4. Difficult to Regulate
While decentralization is one of the hallmarks of Web 3.0, it could also make the platform challenging to regulate. Without someone or some organization overseeing operations, more cybercrimes or misinformation could be circulating the web.
Positioning Your Startup for Web 3.0
Complete adoption of Web 3.0 is still some years away, but it’s a valuable platform for startups to consider joining. There are several benefits to leveraging it. Meanwhile, it’s good to prepare yourself and your startup ideas before it officially launches. Three simple steps to take in preparation include:
- Educate yourself on the fundamentals of Web 3.0 and how you could position your startup
- Study the pioneers of Web 3.0 and learn from their mistakes
- Start small when learning about Web 3.0 and build up your skills and knowledge gradually over time
Conclusion
Web 3.0 is known as the third generation of the internet, or the future of the web. It’s a decentralized evolution of the internet that exists on blockchain technology.
The concept of Web 3.0 is still emerging and has yet to be implemented. Still, the new technology could prove to be helpful, especially for startups looking to position themselves for the future. There are several benefits of Web 3.0 for startups and the steps to take to prepare your idea for the next phase of the internet.
About the Author
Jonathan Hung is one of the most active angel investors in Southern California; his mission is to drive value creation within each portfolio company. In support of this mission, he serves as Co-Managing Partner at – Unicorn Venture Partners.
He and his team target investments in US companies with global market potential, focusing on long-term growth expansion to East Asian markets.
As a Managing Member for his family office fund, J Heart Ventures, Jonathan developed his investing prowess, making investments in start-up companies such as Gyft, ChowNow, Miso Robotics, Clover Health, and Bitmain, to name a few startups he funded.
Jonathan has various degrees from the University of Southern California, London School of Economics, Massachusetts Institute of Technology, and The Wharton School at the University of Pennsylvania.