With the advent of Web3 business models based on crypto, nonfungible tokens (NFTs), and blockchain technology, Web3 has gained significant traction in mainstream businesses. While the technology is gaining popularity, the question is whether it’s genuinely improving the mainstream industry or getting in the way.
According to a Coinbase survey published in June 2023, over half of the top 100 Fortune 500 organizations in the United States have launched Web3 projects since the beginning of 2020. Over 60% of these projects have been in the pre-launch stage or have already launched.
Pat White, co-founder and CEO of digital asset platform Bitwave, told Cointelegraph that there has been progress in successfully combining Web3 with the mainstream industries. According to him, Web3 has the potential to drive innovation across so many industries — and already, the technology has found footing in industries outside of the crypto economy. Pat goes on to say that proper use of the technology is bound to eliminate intermediaries, lower costs, boost data quality, increase supply chain transparency, enhance cybersecurity, and develop new methods to communicate with clients. Some of the industries that are already using the technology include:
Web3 promises a future in which cross-border payments are simplified and speedier. This leads to a more accessible and collaborative work environment that fosters growth and creativity. An excellent application of this technology in finance is that it’s used to send, receive, and trade cryptocurrencies from websites such as Core.
With blockchain that allows fast money transfer, customers can complete transactions within seconds compared to days that a traditional bank wire transfer takes. And the good news is that the transaction costs are low, meaning that the customers keep most of their money. Web3 and blockchain is also deemed to change how lending works.
Instead of giving money to the bank so that it can lend it out and give you interest, users can load their money into the blockchain and lend it to the qualified person once certain milestones have been met, such as uploading collateral.
Web3 paves the path for patient-centered, accessible, and efficient healthcare. It contributes to the continuing development of new healthcare services and solutions. A classic example is where Web3 uses a permanent ledger to store, organize, and structure patient data.
This information is transparent, and you can observe and access it or make changes as long as you have the private log key. Since it is decentralized, sensitive information saved in the blockchain cannot be tampered with. Because data is dispersed across several nodes, hackers find it difficult to alter or remove it. As a result, you won’t have to worry about data leaks.
Web3 proposes a peer-to-peer network, implying that artists can communicate directly with their fans in the future. They also will own all of their work and be appropriately compensated.
The technology allows tokenization, enabling artists to tokenize their songs or albums and sell shares to fans and investors. As you can tell, this increases the income streams for the artists.
Web3 introduces the concept of smart contracts. These contracts are binding, making it possible for property transactions to be handled without intermediaries such as lawyers or escrow services.
Both buyers and sellers can program the contract to execute automatically when certain criteria are met. For example, they can program the smart contract to release payments to the seller whenever the buyer has the digital keys to the property. The existence of such a system makes the buying and selling process fast, not to mention lowering the possibility of conflicts.
Web3 presents innovative purchasing and selling tactics aimed at reducing the environmental impact of the apparel business. Both businesses and consumers are increasingly concerned with sustainability, using digital representations of their wardrobes to monitor clothing usage, encourage increased clothing usage, sell or share goods they no longer wear, and manage garments through selling or renting. This practice already exists but is projected to develop dramatically as display technology advances and real clothing and its digital siblings become more widely adopted.
Web3 technology offers a more personalized, honest, and direct connection between customers and brands. The technology also brings about token-based reward systems, community-driven marketing campaigns, and decentralized platforms that drive innovative marketing methods. Brands use digital tokens to incentivize customer interaction, which boosts loyalty.
Still, a lot of work needs to be done.
Bradley Allgood, CEO of Fluent Finance, a Fintech company, told Cointelegraph that he believes Web3 technology has a lot of potential in many mainstream industries.
While this is the case, early Web3 adopters face many obstacles, which are anticipated to grow more prevalent as Web3-enabled products become more widely available and accessible.
Currently, the following challenges exist: Evolving regulations: Authorities in different jurisdictions are establishing policies to control concerns such as consumer and investor protection, the legitimacy and enforceability of blockchain-based contracts, and anti-money laundering requirements.
These regulations come in the way, and Web3 needs to find ways to address them. User experience: As much as it’s still in its infancy, the Web3 system has relatively weak user experience standards compared to Web2 products. Many consumers and businesses are also still struggling to find proper use of Web3 products such as NFTs.
This means that the developers need to put more work into the various products and fine-tune them so that the consumers and businesses have confidence in them and the entire system. Consumer protection: Following the collapse of several Web3 projects, consumer and investor safety is becoming a priority, and regulators are moving fast to ensure that consumers are protected and safe. The wariness has made many people skeptical about the various products.
Necessity or hindrance?
From the above argument, you can see that Web3 is a necessity. As much as significant advances have been made in the industry, Web3 has yet to fix all the issues that plagued Web2. In reality, the developers have to work harder to address the challenges and fine-tune it to become the solution this new generation of the internet requires.