Web3: Something to prepare for, or just a marketing buzzword?

Switchboard Dec 7

Web3 buzzword
Table of Contents

    According to research from Apptopia, approximately 43% of all mobile apps that define themselves using Web3 as a keyword are finance apps. Around 9% are social apps, another 9% Are tools and utilities, and almost 6% are business apps.

    But what is Web3? Some folks have described it as just a marketing buzzword, while others suggest it’s the inevitable coming of a new iteration of the internet. So, will Web3 change anything, or will it remain just an idea?

    What is Web3?

    In short, Web3 refers to web technology that involves decentralization, blockchain, and token-based economies – as opposed to how the web currently works (Web2), where content and data are centralized within “big tech” companies.

    The idea first gained traction in reference to cryptocurrency such as Bitcoin – a decentralized financial system that uses blockchain technology. A “blockchain” is similar to a database, which is hosted by a network of computers instead of a single server.

    However, there’s a common misconception that Web3 will allow for an entirely decentralized database.

    Blockchain technology is not the same as a database, as although it stores some data, this is mainly just transaction metadata. If you need to store or transport any other type of data, you will also need a database in a data warehouse.

    READ MORE: Top data warehouses of 2022

    While blockchain may enable you to achieve full “trustless decentralization”, you still need data storage for “off-chain” data, i.e. any non-transactional data that is too large to be stored in the blockchain efficiently, or needs to be processed further.

    What’s the difference between Web3 and the “metaverse”?

    Web3 describes decentralized data, whereas the metaverse (also known as the immersive web), refers to a version of the online world that incorporates advanced technologies to blur the line between a user’s physical and digital environment.

    The potential benefits of Web3 for data-driven companies

    Web3 offers the potential for digital businesses to truly control their data in an efficient and effective way. The main benefit of going into Web3 is data privacy. Using blockchain technology means no other third party can access your data, which in turn means the “transaction” is solely between your business and the consumer. Therefore, the data is fully compliant with laws such as CCPA (California Consumer Protection Act) and GDPR (General Data Protection Act).

    How would Web3 impact publishers?

    From a publisher standpoint, Web3 offers the potential for maximizing direct sales with advertisers – as opposed to an intermediary advising on inventory and pricing – thus reducing costs.

    Another potential advantage of Web3 is replacing content paywalls with loyalty systems or cash tokens. For example, Time Inc has recently started testing Web3 functionality by offering tokenized (NFT) content to subscribers – creating approximately seven figures in incremental revenue. This example shows how using NFTs to monetize publishing assets as packages or subscriptions is a natural application of Web3 for publishers.

    In short, with Web3 your data is 100% verified because there’s a record of the data being recorded on the blockchain. However, unless the data itself is being stored on the chain (i.e. using a blockchain-based data warehouse such as Filecoin), you need an off-chain data warehouse to store and manage your data.

    If you need help unifying your first or second-party data, we can help. Contact us to learn how.

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