Web 3.0 and the changing business models
Web 3.0 is an upcoming technology ecosystem which is evolving fast and has the potential to change business models significantly. As the third generation of the world wide web (WWW), it facilitates the metaverse and cryptocurrency while laying emphasis on ownership of data.
The traditional first-generation web was all about static and, in limited instances, dynamic content for only browsing purposes. It was classified as a read-only internet.
With the advent of technology and standards that started enabling user inputs through the internet and the subsequent proliferation of social media, the second-generation web evolved, which is classified as read–write internet. We are now witnessing the third evolution of the internet, i.e., Web 3.0, which can be classified as read–write–own internet.
Unlike the traditional first-generation web, Web 3.0 is not based on one technology, such as Hypertext Transfer Protocol (HTTP)/ Hypertext Markup Language (HTML). Similarly, it is not a one-platform, social media-centred ecosystem like the second-generation web either.
Web 3.0, which is also known as Web3, is rather a convergence of multiple technologies to create a heterogenous ecosystem, with considerable reliance on decentralised data and systems.
Web3 uses various technologies to introduce new functionalities. For example, blockchain is used to introduce new models of ownership, incentive and community. The metaverse introduces new methods of immersive experiences and interactions.
Edge computing helps to augment the processing power beyond the cloud. Finally, 5G and low-latency internet help to intensify human–machine interfaces to a whole new level.
With the convergence of such powerful technologies, Web 3.0 is bound to disrupt many businesses and help create several new and innovative businesses. Even if a business remains the same, the respective business model is expected to change due to Web 3.0.
That's why it is important for business leaders to understand the increasing opportunities and threats due to Web 3.0. To this end, there are three factors that business leaders must consider -- ownership, alignment of incentives and communities.
With the arrival of technologies like blockchain, ownership of data has been decentralised and democratised to a considerable extent. Moreover, it has made ownership of digital assets possible, just like any physical assets.
These digital assets can be earned through certain economic activities, stored like cash in the individual's digital wallets, and used for spending in certain economic activities – such as buying goods and services.
The ownership of digital assets by individuals has triggered new thinking on the evolving relationships between brands and their customers. Therefore, both local and global brands must alter their customer-incentive models, such as loyalty programmes, with the perspective of Web 3.0.
In the past, social media has proved how powerful communities can be in shaping the brand purpose and its alignment to a cause. Now with Web 3.0, these communities are going to become stronger with immersive technologies such as the metaverse.
Moreover, community roles will possibly be intertwined with the incentivisation models of brands.
As Web 3.0 is maturing fast, it is crucial that business leaders get familiar with it and reconfigure their existing business models as well as brand–customer relationships in line with this technology.
The writer is a partner with PwC. The views expressed here are his own.