What will Web3 look like for businesses?

Web3, the metaverse and NFTs are all still so new that it’s easy to see them as buzzwords. People like to talk about them, but what do they mean? And how can businesses use them to benefit customers?

The internet’s evolution can be broken down into three eras: Web1, which was READ (where people started forming communities and sharing information freely); Web2, which was WRITE (where large tech corporations like Google and Microsoft started to create centralised services and profit from the value of the content); and now Web3, which is based on the principle of OWN. Web3 will see a greater diversity of people and organisations owning and generating value from what they create or trade online.

Right now, Web3 is in its early, experimental stages. Technology is still being developed and refined. Regulators are coming to grips with how to manage the different elements of Web3. But now is the time for businesses to start considering what Web3 will have to offer them and how they can use it to enhance their customers’ experience. We’re seeing a significant number of large organisations coming to us for advice on how to approach Web3, and particularly the most talked about part of Web3, the metaverse.

What is the metaverse?

The metaverse uses a combination of the virtual reality we’re already familiar with -- like Second Life and other Massively Multiplayer Online (MMO) games, augmented reality, and physical space and products to create an experience that spans the online and offline world.

While the metaverse is creating a lot of discussion right now, we’re still quite a long way from a fully realised version of it. The technological requirements to implement and support the metaverse aren’t close to being met yet.

Eventually, we’ll get to a point where customers will expect organisations to routinely offer services via the metaverse, but this isn’t likely to be for some years.

What will Web3 look like for businesses?

1. Tracking ownership across the metaverse through NFTs

The big challenge for Web3 technologies is how you take a digital item you own and use it across different platforms, and even in real life.

For example, you might buy a branded skin in Fortnite and also get the offline version of the tracksuit or trainers. But you might want to take those items into another world or game. You could do that by using an NFT, a token that proves your ownership of the item.

We are already seeing a slew of new technologies springing up to enable this kind of transfer of ownership, and this will be a huge growth area in the next few years. It will mean brands can sell items via the metaverse effectively.

2. Increased flexibility to establish organisations and collaborations

Web3 will also see the rise of Decentralised Autonomous Organisations (DAOs) – basically, people coming together to collaborate without establishing a leader or company. Blockchain allows individuals to establish these connections via direct agreements with each other. One example of this in action was ConstitutionDAO, where people joined forces to try and buy an original copy of the U.S. Constitution.

We could see brands use DAOs to gather people into exclusive groups who would gain access to invitation-only events (which they gain access to through the DAO and, perhaps, owning a specific kind of NFT). They could also be used by special interest or campaign groups to organise in less traditional (and more agile) ways.

DAOs could be a good way for Fortune 500 companies to explore Web3.

3. The rise of decentralised platforms

Blockchain technology is decentralising the ownership of assets and breaking physical boundaries. It doesn’t matter who you are or where you’re from, you can join DAOs and buy NFTs.

As Web3 develops, we’ll see more businesses move away from the apps of Web2 and towards the protocol-governed world of Web3. It’s a world where business ideas can be realised instantly. We could see things like customer suggestions being instantly implemented, creating an improved experience for everyone.

Why do Web3 and the metaverse matter?

Much of the value in Web2 has been captured by the big five tech companies - Google, Amazon, Facebook, Apple and Microsoft. Web3 will give businesses (and individuals) the opportunity to generate value from their work online by, for example, creating and managing new communities (DAOs) that increase customer loyalty and foster a sense of community.