What is Web3?
Web3 is a developing version of the internet that will move to a decentralised world wide web. It will use blockchain technology to move data control from the hands of large corporations and internet server providers into the hands of people.
One of the biggest proposed benefits of Web3 will be better data security, due to the way that blockchains are structured. For example, timestamps and interlinked data records will mean no data file can ever be lost. While privacy keys will protect data from hacking and interference from third parties.
We also expect to see a move to a ‘token’ based approach to commerce. Non-fungible tokens (NFTs) could give purchasing power back to individuals who won’t be tied into long contracts with big companies. Rather, consumers will be able to pick and choose how and where they purchase everyday commodities, from mobile airtime to household energy, in a more flexible way than they do today.
So, all looks promising for consumers, but what will Web3 mean for businesses?
Data ownership is changing
You may have heard of blockchains in relation to online currency like Bitcoin. This is its most well-known application, but the concept of a blockchain actually refers to the collection and storage of data in a new format compared with this traditional data storage approach.
In a blockchain, data is stored in an interplanetary file system (IPFS), which is a peer to peer network. It isn’t owned by a single person or company. A data owner needs to give permission for someone to access their information. In this way, the data is protected and the user maintains ownership over their data.
Now, let’s say a large company wanted to access that data. They could contact the data owner and request permission via a public-private key. The company could access the data via an API, so they’d retrieve the data and use it as they wish (with agreement from the blockchain owner), but they wouldn’t need to host it on their servers.
This means that with Web3, companies won’t need to track user behaviour on their websites using tracking cookies. Instead, they’ll be able to request that data from within the blockchain and use it, without having to store it. This could improve efficiency for companies and is sure to save money on hosting and data harvesting. We’d expect the quality of data to improve immensely too, as it will be sourced directly from the data owners, rather than collected anonymously online. So this could provide incredible opportunities for personalisation and targeting of consumers.
The rise of a decentralised internet
What if consumers didn’t have to rely on those big players to get the services they need? The rise of a decentralised internet is giving power back to the people, certainly as far as user data is concerned.
Web3 uses the IPFS (peer-to-peer file sharing network), a decentralised digital identity protocol called IDX, and blockchain technology to keep data in the hands of each owner.
An article in The Guardian explains: “While the first applications of blockchain technology were for digital currency transactions, that same technology is now finding application in the development of the DWeb including recording the movement of data, registering unique usernames and even data storage.
One thing that is likely to change [in a decentralised internet] is that you will pay for more stuff directly – think micropayments based on cryptocurrency – because the business model of advertising to us based on our data won’t work well in the DWeb. Want to listen to songs someone has recorded and put on a decentralised website? Drop a coin in the cryptocurrency box in exchange for a decryption key and you can listen.”
This same principle will apply to almost every other eCommerce service consumers use. Using non-fungible tokens (NFTs) as currency, users will be able to pick and choose what services they need without being tied to contracts with large companies or needing to give their data away in order to access digital services.
Although this may concern big businesses that currently rely on subscription models and contracts to secure their financial futures, there will undoubtedly be new opportunities to package up products and services to attract consumers to choose certain brands.
Why is this relevant to Digital Detox?
As a human-led digital agency, we are always at the forefront of emerging technology and market developments that could benefit people. At this stage, much of the Web3 discussion with clients is speculative, but we are learning as much as possible to ensure we’re prepared on how the internet is likely to change and what this could mean for our clients.
We’re also excited about what Web3 could mean for online security, not to mention a decentralised approach to user data. If the predictions about Web3 are correct, we think it could align with our principles of:
People: Our entire approach is always based on putting people first, whether that’s the end-users who use our clients’ services or the people and communities who can benefit from their products.
If Web3 gives more autonomy to individuals, and they no longer have to share their data in order to unlock corporate services online, then we’re all for that. At the same time, we will explore opportunities to use Web3 to unlock value and opportunities for our clients to ensure they don’t lose out in the new, decentralised era.
We see opportunities for companies to provide a more targeted and personalised experience to end-users and perhaps even new opportunities for eCommerce. As always, we’ll be looking for ways to help clients operate more efficiently and with a minimal negative impact on the planet.
Technology: At DD, we’ve always been early adopters of new technology. We’ve guided clients through countless digital transformation projects, using Cloud computing to offer more efficient and streamlined processes. More recently, we’ve explored headless CMS, artificial intelligence and machine learning to unlock value for our clients.
With this in mind, we’re excited to continue understanding how Web3 will work from a technology perspective and how we can utilise its potential to drive world-class digital experiences for our clients and theirs.
Planet: Sustainability will be at the core of our utilisation of Web3 technology. We’re already aware of some sustainability challenges in Web3, such as the significant processing power needed to create blockchains and the digital carbon footprint of increasing volumes of people going online to carry out their everyday activities.
As we explore how Web3 can benefit our clients, we’ll factor in sustainability at every step of the process. It’s a proactive consideration for us, not an afterthought.
Risks and opportunities for clients
A question we anticipate from clients as we start to apply Web3 technology to our approach in the future is: “What about risk?”.
Naturally, we’ll retain our standard approach of conducting discovery sessions and delivering proof of concepts before any actual development takes place. We know that this approach de-risks every project we undertake because the value is proved before any development is done.
So from our perspective, the risk factor will not increase. We’ll keep delivering innovative ideas and executions to our clients. Web3 technology will be just another innovative tool in our kit, which we’ll only use when appropriate.
We know that humans will drive the application of Web3 moving forward - the robots aren't taking over!
Next steps for DD and Web3
As Web3 continues to evolve, we’ll continue doing research to understand opportunities, share knowledge with players in the Web3 space and discuss opportunities with clients.
If you’d like to share your insight or ideas about Web3, or you’d like to know more, do get in touch!