Even though the Internet remains the driving force behind digital transformation, its scope of application has significantly expanded. Since the inception of the Internet twenty years ago, centralized power and widespread monitoring have steadily increased. As a result, institutions intended to benefit everyone continue to help large corporations, governments, and the media primarily. The Web 2.0 ecosystem we currently inhabit fails in this regard.
Users’ data and actions are regarded as commodities in the contemporary online economy. Even if we cannot hold them accountable for their role in our daily lives, large organizations’ control over our personal information is cause for concern. Tim Berners-Lee, an Internet pioneer, said, “If we want to ensure that the Web serves humanity, we must be concerned with what people are building on top of it.”
This sentiment itself drives the Web 3.0 paradigm shift. This movement is not limited to blockchain; while that may be where it begins, the initiative is much larger. Web 3.0 emphasizes decentralizing systems to protect personal information and assets. However, what does this mean in practice, and what are the potential repercussions? This article will discuss how the advent of Web 3.0 alters traditional business models and the evolution of the Internet.
The Development of Internet Infrastructure
In the early days of the World Wide Web, users could only read and search for content using “read-only” technology. Web 1.0 was designed as an online extension of storefront advertising. With the advent of “read-write” functionality, Web 2.0 users have significantly more flexibility in content creation and Internet interaction. This framework has helped shape global business strategies by allowing social media, blogs, and online reviews to grow at an unprecedented rate.
As mentioned previously, this period of rapid expansion has not been effect-free. Consumer protections continue to take a back seat to corporate interests as web surveillance fuels profitable data collection. The continued prevalence of data breaches is a glaring indication of this system’s flaws. To address these issues, web 3.0 projects aim to give users more control over their online experiences. Before delving into the specifics of how this will occur, it is essential to understand the Web 3.0 features that will make this possible.
Web 3.0 Defining Characteristics
Web 3.0 defies precise definitions, but its components can be usefully dissected.
Web Linguistics
The semantic web improves the functionality of the existing Internet by creating, disseminating, and linking content based on a shared understanding of words. Instead of keywords and numbers, search and analysis use context.
Semantic metadata enables Web 3.0 to be more interconnected than ever before. Utilizing all available information can significantly improve the user experience.
Artificial Intelligence
Web 3.0 can simulate human information processing capabilities. Consequently, through continuous learning, platforms can better meet user needs.
3D Capabilities
Numerous Web 3.0 sites already employ 3D layouts. Games, e-commerce, and mapping applications are merely a few of the potential applications.
Ubiquitous
In a decentralized Web 3.0 environment, all content is accessible to multiple applications, and all devices have web access and access to related services.
Web 3.0 and Existing Business Models
We have barely scratched the surface of what Web 3.0 applications are capable of, but it is already evident that they have the potential to cause significant disruptions. Numerous individuals are curious about how decentralized projects that disrupt established industries can increase overall profits. Due to the proliferation of decentralized peer-to-peer platforms, certain industries have begun exploring new funding opportunities.
Revenue Split
The revenue share model is predicated on the notion that profits can be used to incentivize the creation of efficiencies or innovations that benefit all parties.
Fee Percentage
You would receive a cut of all transactions on your platform using this method. Numerous marketplaces and exchanges continue to employ this design. Because they have the most to gain from a successful sale, sellers typically cover the costs.
Profit Sharing
In this model, users contribute to a pot that receives revenue from an external source. In the real world, a restaurant where the cashier divides the tips equally among the staff would serve as an example. With Web 3.0, a $1 tip at a coffee shop could be distributed to all parties in the supply chain for that cup of coffee with minimal additional overhead.
ICO’s
A project’s tokens can be sold simultaneously or gradually during an ICO. There are numerous initial coin offering (ICO) models, and businesses can use various tokens to raise capital.
Examples of Constant Finance
Continuous Funding Models are business models that sell ERC-20 tokens in installments as opposed to all at once.
Curved Bonding
Curved bonding is a method of continuous funding that provides incentives for initial capital expenditures. In contrast to traditional ERC-20 token sales and ICOs, in which each token is sold for the same price, such models predefine purchase prices using an algorithmic curve (regardless of the time of purchase). Those who act quickly can acquire more tokens for the same price as those who delay. Curved Bonding ultimately encourages early adopters to invest in a token.
Persistent Organizations
Establishing a Decentralized Autonomous Trust is a distinguishing feature of a sustainable organization (DAT). This trust is an immutable, blockchain-based smart contract that employs curve bonding to generate, destroy, and distribute FAIR securities, also known as security tokens. Businesses add significant value by rerouting a portion or all of their cash flows into a trust.
Side Channels
A “sidechain” is a secondary blockchain that can be connected to the main blockchain in two ways. The model permits the transfer of assets to a second chain and then back to the primary chain. However, miners must also exist for sidechains. Merged mining provides an incentive for these miners by enabling them to mine two distinct cryptocurrencies with the same algorithm simultaneously.
State Channels
A state channel is a line of communication between two parties wishing to conduct business. Only the result must be recorded as a single transaction on the main chain in this instance. The off-chain is where the remaining transactions occur.
The Future Direction of Internet Architecture
Blockchain technology will remain a vital component of the Internet’s infrastructure as long as Web 3.0 continues to evolve. Although the Internet continues to have far-reaching positive effects, many people continue to value user autonomy. Since centralized institutions and governments have so much access to private data, many individuals are beginning to question the status quo.
Those who enter this new web space will be in a prime position to profit from its rising popularity. Using Web3 marketplace development tools, businesses can implement potentially lucrative new strategies. The new web enables companies of all kinds to abandon subpar revenue models in favor of more promising alternatives. It is important to remember that even Web 3.0 has a long way to go before it reaches its full potential, despite the progress being made in many areas.
