Permissionless, decentralized, safe, and unrestricted - that’s the promise of Web3, the next evolution of the internet. The emerging tech ecosystem proposes to unleash a new financial model that will revolutionize physical and digital business models amidst existing and emerging obstacles.
During a recent live stream, Gigster’s Director of Blockchain, Cory Hymel, picked the brain of the Blockchain and Digital Assets Leader at Deloitte Consulting, Rakinder Sembhi, about the potential impact of Web3 on revenue models.
The following are the highlights of their conversation.
Technologists from the mainstream tech community and firms that use Web2 technologies to address their everyday business problems don’t like the hype surrounding Web3. By believing that the blockchain space is overestimated, they miss the point that the mission of crypto isn’t to serve as an investment vehicle but to redefine finance by creating a decentralized environment.
The emerging Web3 wave has spread its tentacles beyond blockchain’s first use case, cryptocurrencies, and opens avenues for paying or rewarding customers and fans for collaborating on new products and services. However, some are still resistant about Web3’s potential to strengthen brand and customer relationships.
While the new internet proposes to fundamentally alter the online experience in the next few years, explaining Web3 to most firms is similar to explaining social media in 1999 – no one could imagine what social media could become. On the looming impact of Web3 on revenue models, Rakinder made the following observations:
Most existing firms have adopted a wait-and-see attitude towards Web3, which is still in its infancy, as they try to wrap their heads around it. Decentralized ownership of assets via blockchain technology may be at the center of the technology, but there remains a fair dose of speculation. Web3 is more than a conglomeration of different technologies, including crypto, NFTs, and the metaverse; the technology must go through the labor pangs as it tries to vindicate itself.
A few existing businesses are still figuring out how they will fit into the technological space that promises to empower consumers and strengthen the brands operating within its ecosystem. The greater majority still can’t understand why they should initiate changes and take their online business to another level while what they have is still working. Web3’s promise to establish a verifiable and traceable way to allow individuals to reap reward from their time, personal data, and input is excellent, but it may take a little more time for most users to appreciate.
The world is on the threshold of a technological leap that promises to create a new permissionless blockchain-backed financial system outside the world’s political systems. The jump from a centralized Web2 into an intelligent, user-centric Web3 infrastructure that will run on tokens and digital wallets will be easy, sudden, and pronounced for those already in the crypto space and already enjoying the Web3-powered environment.
The transition will happen stealthily for the rest as blockchain and cryptocurrencies gradually permeate and supplant the Web2 architecture they won’t even notice. There might not be a prescribed moment when the complete transition will happen. Instead, the change will occur when the dictates of the “future internet” will impact platforms that thrive on Web2 so much that they’ll accept Web3’s user-centric philosophy of decentralization.
While the potential of cryptocurrencies and central bank digital currencies (CBDCs) is still underappreciated, decentralized finance (DeFi) has shown how it’s possible to eliminate the red tape associated with money and finance. Web3 payment systems now enable users to exchange money quickly, efficiently, and anonymously without a centralized intermediary, eliminating the need for existing financial infrastructure. The removal of Web2’s centralization means that banks, accounting firms, insurance companies, payment providers, and governments adopting a prove-it-before-you-move attitude must prepare for a Web3 era that makes the customer sovereign.
The dawn of Web3 payments will introduce new revenue models. Financial intermediaries that offer top-down oversight and fail to adopt will become endangered species. From paying for goods and services to sending and receiving money, there’s no exception to Web3’s potential. Watch our live stream for more insights on how Web3 will impact existing revenue models.