Web 3.0 and the dawn of the metaverse
Suppose you had the chance to buy a piece of the Internet in 1995, when only 16 million people were using it, and own a slice of what would become the world’s communications network. Would you pass up on that deal today?
The Internet is about to enter its third phase, and the earlier people understand this, especially creators and businesses trying to make money, the more successful you’re likely to be.
Web 3.0 will give you digital property rights in a secure marketplace. So instead of renting websites and social media pages from big tech companies, you can own assets on blockchain networks like Ethereum or Solana.
Just like companies rushed to get online decades ago, future businesses will issue NFTs to customers. Some may sell goods and services in a virtual reality metaverse. As an entrepreneur, you might be wondering how a decentralized Internet will affect your livelihood.
Let’s dive into Web 3.0 and discover why it matters.
Web 3.0, simply explained
Before explaining Web 3.0, we need to understand how the Internet has evolved since the 1990s.
- Web 1.0: read
- Web 2.0: read / write / share
- Web 3.0: read / write / own
Web 1.0 (1991 to 2004) was when people went on the Internet to read information and look at pictures, such as Wikipedia. You went online by dialing in with a landline telephone, and there was no way of sharing content apart from email.
Blogs, journals, and chat forums were the village halls of the early Internet.
The seeds of web empires began to bloom during this era, including Yahoo, Amazon, Google, Facebook, and LinkedIn.
You might remember Web 1.0 as the read-only Internet.
Web 2.0 (2004 – present) is when the Internet became social. With the advent of the iPhone in 2007, we moved from going online a few hours a day to an “always-on” state – the Internet was now in everyone’s pocket.
Unlike in the 1990s, where you passively read websites on a personal computer, you could now share content, talk to friends, and interact with strangers on smartphone apps.
But that’s where many of today’s problems began as Meta (formerly Facebook), Google, and Twitter have become unaccountable monopolies selling your data, disregarding your Internet privacy, and controlling your ability to make money online.
Web 3.0 looks to give power back to users.
In the Internet’s third phase, you won’t have to rent space from Big Tech companies anymore. Instead, you can own digital property on blockchain software like Ethereum and Solana and receive compensation for the value you create on them.
Let’s say you’re a musician or a tech podcaster. You can create a private record label and distribute content directly to listeners instead of giving a cut of your sales to Spotify or SoundCloud.
Creators and businesses are building decentralized apps (dApps) on peer-to-peer blockchain networks, selling items to their followers, including exclusive access to virtual goods like NFTs.
What are dApps?
dApps are like regular apps but run on blockchain software instead of platforms like the App Store or Google Play. Because they’re decentralized, dApps provide:
- Greater security against cyber attacks, as there’s no central place to ‘hack.’
- They can’t be shut down or censored, as no single institution owns them.
- Offer ownership and income opportunities through crypto tokens.
- Allow users to retain control of their data.
dApps are disrupting the small business landscape, allowing you to build and own online stores, media, and content services.
Ethereum and Solana have dApps for every category, including finance, gaming, NFT marketplaces, and more.
If you use dApps, you’ll pay a transaction (or gas) fee for every interaction you make. These fees compensate the miners for the energy required to verify transactions and provide extra security by making it too expensive for hackers to spam the network.
What DeFi means for small businesses
Similarly, decentralized finance (DeFi) apps are helping creators and businesses transform their financing. With DeFi, you can earn interest, borrow, land, exchange assets, and more – but it doesn’t require approval from a bank.
DeFi is a peer-to-peer financial system that’s open to everyone, regardless of your background, salary, or credit rating. It can help billions of unbanked citizens build their first business by providing fast and hassle-free funding.
So instead of applying for a bank loan, you can make and receive DeFi transactions on Ethereum, Solana, and Cardano.
How do blockchain networks work?
Let’s say you run a business selling vintage soccer shirts on Instagram. If their servers failed for any reason, you would lose your primary revenue channel.
But imagine if Instagram was decentralized on a blockchain network? Everybody would have a piece of it, so to take it down, you would have to take down everybody’s phone, which is nearly impossible.
So who would manage Instagram if there were no central power running it? Well, imagine if Instagram issued a governing cryptocurrency. Anyone holding these tokens would have a say in any changes made to the platform.
The theory is that if you have a monetary stake in something, you have less incentive to ruin it. Now apply that principle to everything: Google, Uber, YouTube, and imagine what’s possible.
That’s what you call a decentralized autonomous organization (DAO).
DAOs made simple
DAOs are a group of individuals pursuing a shared goal on the Internet, using a blockchain network to make decisions. They are like online corporate boards with a shared bank account, disrupting everything from political activism to global art markets.
You could create a DAO for businesses that want to pool their money together to run a coworking space. By holding governing tokens in a DAO, you have voting rights on how it’s run, enforceable by a self-executing smart contract.
DAOs represent governance in a decentralized web, while NFTs are digital assets. So, how do they work together?
When you upload an NFT onto a blockchain network, a DAO will provide the governing structure, ensuring the verifiability of your asset.
What are NFTs exactly?
NFTs (non-fungible tokens) are digital collectibles with many use cases, including artwork, music, baseball cards, and movie stills. You cannot replace them with something else. So when you buy or receive one, you’ll receive a certificate of authentication that proves you’re the owner.
A smart contract (a self-executing legal agreement) is similar to the deeds you receive when buying a house. But instead of a mortgage, an NFT stands for ownership on the Internet.
NFTs, therefore, have economic value, just like paintings, vinyl records, and books are worth something.
Why owning an NFT means something
Let’s say you were to ‘NFT-ize’ every frame of Pulp Fiction. If the iconic shot of Vincent (John Travolta) and Jules (Samuel L. Jackson) pointing their guns together became available as an NFT, it would potentially sell for millions of dollars.
How is that different from all the bootleg posters and JPEGs that already exist?
Well, the image isn’t what’s valuable here. It’s the sense of ownership that matters. If you owned this hypothetical NFT, its matrix code, which is validated by a blockchain smart contract, would deem it to be exclusively yours.
You can apply the ownership test to art, music, videos, photography, tweets, and even soccer goal montages.
So if you’re lucky enough ever to own a Pulp Fiction NFT, you may also enjoy exclusive benefits from the sale. While anyone holding fake versions are free to enjoy the image, but nothing more.
The NFT hype machine is growing alongside the metaverse, a virtual reality experience, which may become the Internet’s successor.
The metaverse is a version of the Internet that you’re inside. You’ll enter this new frontier by wearing a mixed-reality headset, creating a virtual twin of yourself, where you’ll socialize with avatar representations of people.
Meta (formerly Facebook) is looking to colonize this new Internet territory before anyone else, given its $ 1T market potential. But there will be multiple metaverses you can explore, not just Meta’s version.
Take Decentraland, an immersive platform like The Sims selling land plots as NFTs on the Ethereum blockchain – so it’s real ownership. Here you can play, explore, and interact with other gamers in a wonderland simulation using its native token, MANA, which allows you to buy digital plots of land.
Why are companies buying digital plots of land?
Corporations are building virtual malls, movie theaters, schools, and museums on Decentraland and The Sandbox because they think that’s where you’ll hang out in the future.
Samsung recently launched its flagship 837X store in Decentraland, enabling digital adventures by replicating its real-world premises in New York City.
Like physical land, you can own and rent out digital properties in Decentraland, monetizing billboards and storefronts to advertisers.
Companies are transitioning away from Web 2.0 towards ambient computing, which will rely on immersive wearable technology. Our smartphones will eventually become tools of the past, with mixed-reality headsets operating as a gateway to the future.
Just think about it.
Netflix or Disney + will end up becoming a place you can literally go. That’s quite a journey from the read-only days of Web 1.0.
Wrapping up Web 3.0
As the metaverse starts to take shape, there’s a feeling that IoT technology is inching closer to a transformative moment in the Internet’s history.
Decentralizing technology is blazing through the economy, and businesses that don’t understand digital ownership will fall behind. History is full of defunct companies that failed to adapt to change.
If you told a florist in 1995, they would sell flowers on a website. They would probably dismiss you as crazy. Well, it’s only a matter of time before small business traders issue NFTs and set up shop in the metaverse.
Web 3.0 is the future of the Internet, and it’s coming faster than you think.
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