What is Web3?
Do you remember the first time you posted on Facebook? The first time you tweeted? How about the first time you posted on LinkedIn? On Instagram? Think back – for the first ten years of the Internet, none of this was possible. The Internet was primarily a medium to read or gather information and the ability to create web pages was restricted to the privileged few.
Then came Web2. We called it the ‘read-write web.’ It democratized content creation where anyone could publish content. This User Generated Content (UGC) today takes the form of blogs, tweets, posts, reviews, comments and likes. The biggest social media and ecommerce platforms of today are all built on the back of UGC.
An important shift was that unlike static, read-only versions of Web1 websites, individuals could add content to the web. What initially started as Likes & upvotes became microblogging. Today, over 2 billion social media profiles exist.
We are now in the middle of the Web3 revolution. Perhaps the best way to think about Web3 is as the ‘read-write-own’ web. The heart of Web3 is how it is challenging the way we think about ownership.
In the physical world, we own the clothes we wear, the phone we use, the car we drive. But what do we own in the digital world? Do you own your blog post? Your tweet? Your Instagram feed? At first, these questions seem weird. What does owning your blog or your tweet mean? How can you own a blog post? Can you sell it?
What Web3 enables is a new principle for interacting with the web — one where only you have access to your accounts and data and choose what to share and what to keep private.
What’s Web3 got to do with Blockchain & Cryptocurrency?
How do you establish ownership of an asset on the web? Fortunately, we can borrow a simple idea from the physical world: the ownership registry. For valuable assets like houses and cars, we register their ownership in a database (registry) maintained by the government. Any transaction involving the transfer of ownership of these assets is recorded in the registry with the new owner getting a document, such as a sale deed or a registration card as proof of ownership.
Web3 borrows the same ideas and implements them digitally. The underlying database or registry in which ownership of any asset can be registered is the blockchain. Instead of being maintained by the government, this database is maintained by a network of computers around the world and secured using cryptography. Any transaction involving the transfer of ownership of assets is recorded on the blockchain with the new owner getting a NFT as proof of ownership.
Think of NFT as the digital equivalent of a deed which proves that you own an asset.
Why do we need Blockchain technology as the key-enabler of Web3?
At the heart of the issue is the need for a trusted ownership registry of assets. Instead of relying on any particular company or organization to maintain this registry, Blockchain enables a network of computers around the world to jointly maintain the ownership registry of assets. Once this registry is in place, ownership of any asset can be recorded, updated & tracked globally digitally.
Digital Asset Ownership needs a Decentralized Internet.
Blockchain is the commerce backbone of Web3.
The True Meaning of Web3
What is the importance of being able to establish ownership on the web?
The ability of NFTs to record the ownership of any asset that can be verified digitally at global scale means the ability to trade these assets at global scale and to be used as collateral for lending at global scale. NFTs enabling globally verifiable ownership of assets is one of the key value propositions of Web3.
Consider UGC (User Generated Content) - one of the defining characteristics of Web2. The business model of some of the biggest social media platforms today are based on User Generated Content. Twitter, Instagram, YouTube, TikTok–all of them rely on content created by hundreds of thousands of users around the world. What if these users owned the content they created…. as an NFT?
In Web2, the individual user is the product.
In Web3, the individual user will be the owner.
How will Web3 impact the distribution of revenue generated by Web2 platforms that rely on UGC? What new business models will emerge? Who will gain and who will lose?
We are seeing the early signs of things to come. One interesting development in Web3 has been the emergence of Digital Communities formed by fans of content creators, artists or a brand. Unlike followers on social media, membership in these digital communities comes at a cost: users have to pay for the NFTs issued by the creator. Not surprising therefore, these communities consist of the most loyal fans and supporters of the creator. Thus, creators, artists and brands can offer their most loyal fans and customers exclusive content or experiences.
What will be the benefits of Web3?
Right now, developments in Web3 are focused on digital assets such as videos, movies, music and digital art. This will revolutionize the way in which creators, artists and media companies are getting paid for the content they create. Not surprisingly, social media platforms and OTT platforms are rapidly adopting Web3.
Another emerging trend is NFTs representing physical assets. Real estate, cars, luxury watches are being represented as digital assets which can then be verified, bought, sold and collateralised digitally. In less than a decade, expect every physical and digital asset to be represented as an NFT that can be bought and sold in real time across the world. Just like capital can flow seamlessly across international boundaries today, Web3 will allow any asset to be traded in real time across the world.
The global nature of the digital economy that Web3 is creating will break down international boundaries for commerce creating new efficiencies, unlocking capital tied up in assets and creating new winners and losers.
Time will tell but there is no doubt that Web3 will change the digital economy by enabling ownership of digital content.
How to access Web 3?
For the most part, the user experience of accessing the web3 will be no different from accessing a website or a mobile app. The primary difference is likely to be the need for a digital wallet (a.k.a. Crypto wallet).
Why do users need to have a wallet? Well, one key requirement for establishing ownership is establishing the identity of users. For recording that an asset belongs to you, there needs to be a way to identify you globally. Today, users' identity is owned by Web2 platforms like Google, Facebook and Twitter.
Given that we are dealing with asset ownership, the Web3 stance is that you should own your own identity online and reveal parts of that identity only when you decide to. And the digital identity that you develop on a social network could be portable to other networks.
The digital wallet is part your digital identity on Web3 and part your way to access the assets you own.
Wallets like Metamask, Torus & Trust wallet are offering multiple ways of making such wallets secure and easy-to-use. On ngageN, we support all these wallets to ensure a seamless user experience in Web3.
The importance of Web3 for Enterprises
In December last year, MG Motor launched their NFTs on ngageN - an NFT platform designed specifically for brands to drive engagement with their fans. As part of the launch, MG Motor created digital collectibles inspired by the brand’s legacy. Fans and supporters of the brand had the opportunity to own a part of the brand e.g. a limited edition digital artwork inspired by the MG EX181 car that broke the land speed record back in 1957 bagging the title of the world's fastest car. The forty people who bought the NFTs of this digital collectible are the only ones who would be able to display it on their “digital walls”.
In many ways, the “digital wall” is what makes NFT valuables. A person’s digital wall is a web page or space where the content displayed is cryptographically verified to belong to the person. Social media platforms like Twitter and mobile apps are now moving towards creating digital walls for their users. Digital Walls allow users to display the NFTs they own, thus giving them a way to express themselves. In the coming years, NFTs are how we will display the brands we love, the causes we support, the movies we love and the products we own. In virtual environments like video games and emerging metaverse environments, the digital wall morphs into virtual spaces like digital homes, digital cars and so much more. Herein lies one of the key value propositions of NFTs - they are digital collectibles that the NFT owners and only the NFT owner can display in their personal digital spaces.
Consider another example - Spartan Poker, an online gaming company is rewarding the top players of their poker championship with NFT rewards on ngageN. These NFTs are digital trophies that winners can display on their digital walls on social media websites & apps. Expect this to expand to cover video games and metaverse environments later this year.
As MG & Spartan were launching their NFT collection, Nike announced the acquisition of RTFKT Studios - a digital design studio specializing in the creation of digital sneakers. Nike has announced that it will start selling digital sneakers which people can buy for their digital avatars. This is a natural extension of the idea of branded digital assets.
In the last decade, a brand's social media played a critical role in establishing its identity. Today, NFTs are playing the same role. Brands are creating NFTs which communicate their identity, establish their legacy and prove their social commitments.
ngageN have extended the potential of NFTs for brands to go one step further. Besides offering fans & loyal customers to own brand digital collectibles, Brands get access to a private digital space where they can interact with the NFT holders of their brand. Think of it as a private member-only club of the brand for the most loyal supporters of the brand. Consider a fashion brand asking its NFT holders to vote on the choice of colours on an upcoming collection. Such close engagement between the brand and its loyal fans & customers creates deep emotional ownership and unprecedented loyalty.
For brand enthusiasts, the opportunity to influence their brand & co-create is powerful enough to join the club by buying a brand NFTs. This, therefore, becomes a new source of value for the NFTs.
When we put the two value propositions together, the impact that NFTS can create for brands is phenomenal. Not only do fans get the ability to show off their love for their favorite brands with digital collectibles as NFTs on their digital walls but they also get to shape the brand’s products.
Moving forward, ngageN is extending the value proposition of brands even further by integrating the creator economy into Brand Communities with NFTs.