What Web3 Will Look Like? (+ 5 Crucial Things to Know)
The internet has gone through two ‘stages’.
The first stage is known as Web1, which started around 1991 and ended sometime around 2004.
Then, Web2 took over, and it’s still the way most people use the internet to this very day.
But soon – very, very soon – all of that will change.
You see, whether you know it or not, you are currently in the midst of a monumental digital-transition.
You are about to enter a new era of the internet.
This is an era that will be defined by enhanced privacy and security, and new concepts of digital ownership through things such as blockchain, digital wallets, and community tokens.
Welcome to the world of Web3.
And it’s going to change everything.
Here’s exactly what you need to know…
Web1, Web2, and Web3
To fully understand Web3, you need to have a solid understanding of Web1 and Web2, so you can understand the relationship (and transitions) between the three stages.
In a nutshell, the transition from Web1 to Web3 will look something like this…
Let’s break it all down one by one.
What is Web1? (You’ve got mail!)
Web1 is the internet as we first came to know it. Think screeching dial-up noises, slow-as-molasses loading speeds, buying
junk used goods off Craigslist, and websites that generally looked like this.
But the single most identifying trait of Web1 is the fact that there were not many content producers – nearly everyone who used the internet was a content consumer.
People got news on major publications including MSN, AOL, and Yahoo. They searched for answers on Ask Jeeves and Google. They bought things on eBay and Craigslist.
But everyone basically looked at the internet as a digital location to consume content. That was about it.
Then, things started to get a little weird…
What is Web2? (The Social Network)
So if Web1 is defined by internet users mostly consuming content, Web2 is defined by internet users being able to consume content AND publish content of their own.
And by 2008, the internet had completely transformed.
Now? Content is omnipresent. It’s literally everywhere.
Between Twitter, Facebook, Instagram, Tik Tok, YouTube, email and WordPress, there are literally billions of pieces of content being published every single day.
This sounds like a good thing, yes?
You know the story. Facebook started to monetize. Ads started creepily following us around the web. Then we found out our personal information was being sold to the highest bidder. Cambridge Analytica happened. Yada yada.
So while Web1 may have felt like a golden era of new possibilities, Web2 betrayed our trust a bit.
But if you take the good and the bad parts of Web2, you can see how we have gotten to this new (see; improved) frontier of Web3.
What is Web3? (New kid on the block-chain)
It should be noted that Web3 is only in its infancy. Like Web2 in 2001, Web3 is still in the early adoption stages – we are all still trying to figure out what the heck it even is.
Speaking of which, let’s define what Web3 is…
- Technical definition of Web3 – Web3 will be an open, permissionless and trustless network that enables a future where distributed users and machines are able to interact with data, value and other counterparties via a substrate of peer-to-peer networks without the need for third parties.
- My attempt at a simpler definition – Web3 will be a decentralized, more secure internet, where we own our data. Tokens will be used as a form of incentive, payment, and validation, and everything will center around your digital wallet where your tokens, digital assets, and digital identity will remain safely in your hands.
Let’s break Web3 down bit by bit so you can get a better understanding of why it is so revolutionary, and how it will change the way that we look at community, ownership, and identity in the digital world.
Here are the 5 things to know to be able to understand what Web3 is.
#1 – Web3; Powered by blockchain
Blockchain was most famously used as the technology behind Bitcoin.
Then one day, a skinny Russian-Canadian named Vitalek Buterin (pictured above) started a crowdfunding campaign for his new blockchain technology called Ethereum.
Once the sale ended he had raised a total of 17.3 million USD and laid the path for an entirely new digital world.
What’s so special about Ethereum?
Simply put, the founders of Ethereum created a code that allows it to run any decentralized application – not just digital currency (like Bitcoin). Through Ethereum’s smart contracts, anything digital can be safely run, tracked, and stored, on the Ethereum blockchain network.
Because of Ethereum (and other Ethereum-inspired technology such as Solana, Terra, and Cardano) we now have the foundation for Web3.
The most important thing to know about anything that is run on blockchain is that it is completely decentralized. This means that the owner of the data is the only person that has access to data. No banks, no governments, no 3rd party platforms – just you as the owner of your blockchain-stored information.
When you compare this with the current state of the internet (Web2), you will see a stark contrast to the online infrastructure and servers owned by powerful Fortune 500 companies.
#2 – Blockchain means better security
In Web2 you don’t have any control over your data. Your cookies, browsing history, profile, interests, and personal information can be tracked and saved – oftentimes without you even knowing it’s happening.
Because of programming, an internet built on blockchain is an internet where your data is much safer.
It’s important to note that this development will be crucial for businesses around the world. If consumers have control over their data, it means they can’t be tracked, which means that we need to change the way we look at online marketing as a whole.
Marketer Ryan Stewart says of performance media marketing…
And writer Frank Calvino adds his thoughts about SEO…
Strong words from both sources, but it’s crucial to think about. Web3 is going to decentralize the internet (therefore making SEO/Google less powerful) and it will give people their own data back (therefore making Facebook/performance media less powerful).
So what does this mean for marketing?
That we need to focus our attention to first party data. This means building and cultivating hyper-engaged communities on channels like Discord and Telegram. This is something that the NFT community knows best and is something we have been helping clients with at First Page. If you are interested in building your own hyper-engaged community, be sure to reach out to us for a free consultation.
#3 – Blockchain means less middlemen
Blockchain technology is also allowing us to surpass the ‘middleman’ in ways we were never able to before.
This started with banks – Bitcoin’s decentralized nature means you frankly don’t need a bank. Skipping the bank means skipping monthly fees, overdraft penalties, slow bank transfers, etc.
But we are seeing the removal of the middleman elevated in new ways as well – mainly through NFTs.
Just in the way that Bitcoin is giving us the ability to skip the middleman of banks, NFTs are giving artists and creators the ability to skip middlemen such as brokers and platforms.
For Web3, this removal of the middleman will continue in ways we haven’t even considered yet.
Personally, I’m interested in seeing how up and coming artists and start-up corporations will raise capital through NFTs. This is going to be a very exciting space, keep an eye out for it.
#4 – The token economy is the REAL game changer
So now that we have established the benefits of blockchain, it’s time to piece it all together to get a clearer picture of how Web3 will actually function.
And to get that clear picture of what that looks like, you need to understand what the token economy is.
‘Token’ is a loose term that refers to the ownership of any asset that is stored on the blockchain network. In essence, a token can give ownership, identity, governance, and access rights.
Some tokens are fungible (like Bitcoin), others tokens are non-fungible (like NFTs).
Here’s a hypothetical example of what this could look in Web3…
Let’s say Instagram built a web3 application, and started a token of its own – we’ll call the token ‘$IG’. This token would be automatically awarded to any users who take the actions that Instagram deems important. For each ‘like’ you give a post, you get 1 $IG token. For each post you publish, you get 10 $IG tokens.
Therefore you are being rewarded for the behavior that the company wants you to take (in this case, engagement).
Then, let’s say that for every 1,000 $IG tokens that you collect, you get a Twitter-like blue check that ‘verifies’ you. And after 10,000 tokens, you get $100 USD in free advertising credits. After 50,000 tokens, you sent free swag.
Now let’s take it a step further…
In this hypothetical situation, the $IG token would be a fungible token that is stored on the Ethereum blockchain, which means that it can be traded on the open market. This means you would be able to transfer your coin to platforms like Coinbase or Gemini and therefore exchange it to Bitcoin, Ethereum, fiat, or anything else.
You see how this is getting interesting? Although tokens are in their infancy, they will be used by companies and creators to incentivize the behaviors they want people to take.
It’s like Gold or Karma on Reddit, but with real-life applications, and actual financial incentive.
For example, the Brave Browser is already doing something similar.
Brave offers BATs (Brave Attention Tokens) as a reward for anyone who views an ad. Brave is getting what they want (ad revenue) while rewarding you for your participation (in tokens).
Currently BATs aren’t worth much, but adoption is too low right now. As Web3 continues to expand, so will the value of digital tokens like these.
#5 – Your digital wallet will be the center of your digital-life (aka, read-write-own)
We just talked about tokens, and how in essence they will give you ownership of what you do online. Whether it’s writing a blog post, posting a photo on IG, or publishing a meme – the decentralized web and the blockchain behind it will give you ownership over all of these digital-actions.
But where does all of this ownership go? Where are all of these assets stored?
This is the final piece of this puzzle – your digital wallet.
Here’s 3 reasons why your digital wallet is going to be so important in Web3…
👉🏼 Connection to Web3
Simply put, without a wallet, you won’t be able to connect to any Web3 applications!
You know this if you have ever bought an NFT from OpenSea. No wallet = no access.
Currently some of the most popular wallets are Meta Mask, Phantom, TrustWallet, and Coinbase Wallet, but more will certainly launch in the coming months/years.
This one is fairly obvious. If you buy and earn tokens, then you need somewhere to store them, right?
Your digital wallet(s) will be the centralized location that you store all of your digital assets and tokens – think NFTs, tokens, and crypto holdings.
But eventually it will be so much more than that as your digital wallet can store your medical records, housing title, and receipts of ownership for other physical goods.
The most interesting thing to consider with your digital wallet is what it will mean for your digital-identity.
For example, it will likely get to a point where part of your digital wallet can be made public and easily shared. This means that you can showcase the things that you digitally own, and therefore paint a picture of who you are as a person.
This is why NFTs are so big right now – they give people a way to express themselves. It’s status. It’s perception.
We as humans do this all the time in the real world – it’s the reason we buy Dior purses and Omega watches – it says something about who we are and our status in the world we live in.
And we are already doing this in the digital world with followers on Tik Tok, photos on IG, and blue check marks on Twitter. Our digital reputation will become just as important as your real reputation, and as Web3 continues to take over, your wallet will be an increasingly important part of your identity.
It should be noted that Web3 is not going to be the perfect utopia that many people think it will be.
Bitcoin is still slower than Visa/Mastercard. Gas fees for Ethereum can be outrageous. And the environmental factors are starting to get out of control. Even prominent tech voices aren’t sold on the future of Web3.
But amidst the things that need to be worked on, there is an exciting future in Web3 that most experts think is inevitable.
And if the explosion of crypto and NFTs has shown us anything, it’s that this is just the tip of the iceberg.
If you are interested in getting your business ready for Web3 – whether that be by growing your following, strengthening your community, or starting your own NFT project – please reach out to First Page today. We’ll give your business a bespoke blueprint and show you how we can take you to the top of your niche.
Disclaimer – this article is meant to educate and entertain, but it is not financial advice. Please always be sure to do your own research.