By Matt Bertram, head of strategy at EWR Digital & co-host of “The Unknown Secrets of Internet Marketing Podcast.”
The internet is evolving, and we are in the middle of it. Web3 is poised to revolutionize how we use the web. In the early days, only a handful of companies had the power to control how we interacted with the internet, but with the rise of Web3 technologies, that is starting to change.
These Web3 companies use blockchain and other decentralized technologies to create a more democratic and fair internet. This would significantly change how users and companies operate online.
Distributing The Internet’s Power
In the 1990s, when people went on the internet, they could only read what websites had already published. Websites were not very interactive and were just a collection of links and homepages. Web 1.0 was the “read-only” internet.
When the 2000s rolled in, the internet evolved to allow people to enter information and edit files. Web 2.0 introduced blogging platforms, online forums and online marketplaces. Social media platforms were later invented and quickly rose to popularity. This second iteration of the internet is called the “read-write” internet and is viewed as a participatory web.
The Problem With Big Tech Companies
As Web 2.0 grew, significant challenges became apparent. Big tech companies like Alphabet (Google), Meta (Facebook), Amazon, Microsoft and Apple started to control massive chunks of the internet’s bandwidth. Previously decentralized, the internet became an increasingly centralized place where a select few harness people’s data for their own gain.
The data collected by these huge sites have become very attractive to brands (and other entities) seeking to connect with their audience. The internet uncannily knows everything about us, from the products we buy, the shows we watch, the articles we read and a thousand other things. This deep knowledge forms part of our profiles on the web.
As a result, we are constantly targeted with ads for products we didn’t think we wanted. Our selections of what we watch or read are limited to those that align with our personal favorites. As it dawns that personal data is a valuable commodity, the question of who owns it becomes a highly debatable topic.
Presenting Web3 As The Solution
Web3 promises to give the control back to the user. Called the “read-write-own” internet, Web3 harnesses the power of blockchain technology to create a decentralized internet where users can own their data and be compensated for it. Instead of data being stored in a centralized server owned by a big tech company, it is stored across multiple servers owned by no one in particular. It shifts the power from the biases of a few to the control of many.
The concept has been around since 2014 but has only gained traction with the popularity of blockchain, cryptocurrencies and NFT (non-fungible token) markets. The success of cryptocurrencies has shown how decentralization creates a trustless and permissionless structure that is critical to an internet owned by the people.
Venture capitalists, recognizing the potential of Web3, have begun investing in Web3 companies. As the pressure to curb the powers of big tech companies grows, it won’t be long before the internet becomes highly decentralized and Web3 fully emerges.
Creating A Better Internet Using Web3 Technologies
This internet’s decentralization has a lot of implications. Websites would be hosted on dapps (decentralized applications) and honor an anonymous single-sign-on that doesn’t reveal personal information. All transactions would be recorded in the blockchain, which is accessible by the public, albeit anonymously.
This creates an open-source platform where democratic governance can be established through DAOs (decentralized autonomous organizations). Users would be able to determine how a particular platform is developed based on their investment in the site. Smart contracts will create seamless transactions that won’t require intermediaries.
Activities done on the blockchain—such as creating a popular social media post—can also be “minted” (generated) as NFTs, tokens that prove the ownership of a digital asset. This allows the creator to be rewarded instead of the platform where it was generated. One popular application of these today is through play-to-earn games, where players fully own in-game items and can even trade them in marketplaces outside of the game.
Delivering Better Products Through Web3 Marketing
With increased personal privacy created by Web3 technologies, marketers will have difficulty accessing third-party data needed to understand their customers and run targeting campaigns. For users, this would mean the banishment of unwanted ads. Marketers must find new ways to get customers to give them their personal data. By giving control to the rightful data owners, people can dictate what personal data they share with companies and how and demand compensation as needed.
As a result, marketing will focus more on community and relationship building. Better products and service quality will take over baseless promotions. Companies will be forced to live up to their brand promise to gain customers’ trust. Web3 marketing will be more transparent and honest, putting the customer first.
As NFTs continue to gain acceptance, brands will use them more often as limited-edition items or rewards for loyal customers. Top brands like Nike, Coca-Cola, Gucci and others have created NFTs to delight their audiences, and I expect more to follow suit.
The Future Of Web3
Web3 is still in its infancy. As philanthropic as the premise for why we need Web3 is, there are still a lot of questions to be answered. Many remain skeptical, some going as far as to call Web3 a fad and a scam.
While we have not seen a comprehensive Web3 infrastructure, Web3 companies have continued to flourish as public knowledge and acceptance of Web3 technologies grow. This is despite there being questions about scalability and sustainability surrounding the concept.
One thing is for sure, though. The only way to surmount the existing challenges surrounding Web 2.0 will be to embrace Web3, even if widespread adoption takes several years. But with the rise of Web3 companies and the continuous improvements in Web3 technologies, there’s no doubt that widespread acceptance will come sooner rather than later.