What is web3 and is it relevant for your brand?

Ok, so before we dive straight into web3, let’s take it back a step and explain what web1 and web2 are…

Web1 is basically the internet. It was the original concept of information, data and content living in the virtual cloud space and being accessible from anywhere in the world via a computer or device with internet access. If we think back to the launch of the internet, it was a totally new phenomenon. 

Then, several years later came web2. This era is to thank for the introduction of social media to our daily lives. Web2 was the concept of content and information on the internet which is published and populated by anyone and everyone. 

Now, web3 is being labelled as the next progressive leap forward in the age of the internet. But how does it differ from what’s gone before? What’s new about it, and what does it mean for your brand?

Well, the concept of web3 is still in its infancy, so it isn’t fully or explicitly defined just yet. But what we know is that it’s centred around the idea of decentralising the web.

If we think of the time we spend online – whether that’s on social media, reading the news, or streaming content – we can’t escape the fact that we’re totally beholden to large corporations who own the internet. In 2021 there were 2.9 billion monthly active users on Facebook, 2 billion WhatsApp users, 222 million Netflix subscribers, and nearly 4 billion global users of Google products or services. The internet provides worlds of information, entertainment and opinions, but just a handful of businesses control our access while storing and profiting from our data. 

Web3 is all about decentralising this state of affairs. It’s the masses taking back ownership of the internet. 

There are a number of other buzzwords closely linked to web3 which you’ll have heard in recent years, and a really important one is blockchain . 

Blockchain is a way of storing data online. When most people use the web, their data and activity is stored by and becomes owned by the large corporation whose service or content we’re accessing. Blockchain technology enables the encryption and security of data and information.

Then we layer on distributed computing . This is where data is stored in multiple locations and can only be accessed (thanks to the encryption) by the owner of that data. If something untoward happens and any set of the data doesn’t match the others, it becomes invalid and inaccessible. In short, you own your data, you’re the only one who can access it, it’s stored in multiple locations and if someone else tries to access it, that version gets locked down. Even if  stored on the server of a large corporation, it’s encrypted and can only be accessed by you.

Still following? Good. 

The next buzzword we can’t avoid when discussing web3 is the metaverse . Now, you may have recently heard of the metaverse specifically in relation to Facebook and their rebrand to Meta. Well, it’s been around a little while longer than since Facebook began talking about it. 

The metaverse refers very much to the visual onscreen side of web3. It’s less about data and backend storage, and more about the interface and how we interact and communicate with others online. Making use of technologies such as virtual reality (VR) and augmented reality (AR), the metaverse adds a new layer of experience and immersiveness to the internet which we haven’t really had before.

The typical web user interacts with a screen on a physical device in front of them. What the metaverse does is tie together the visual sense, movement, and sound. We’re not quite at this stage where taste and smell are involved, but who knows? Maybe one day.  

So, we’ve covered how web3 can impact data and its security, and change the way we experience and interact with the digital world. Next we should talk about ownership, finances, and the world of digital wealth. And that can only mean bitcoin .

Love it or hate it, some people have made themselves very wealthy in the physical world from bitcoin. In its simplest terms, bitcoin is a digital currency. It’s been around since 2009, so it has become quite commonplace now, but it began with the idea that people shouldn’t put all of their financial value – money, essentially – in large banks that only make the banks richer. People should instead invest it digitally by purchasing virtual currency, then trading it, investing it, and most importantly, fully controlling it themselves.

Now, cryptocurrency is no different from other currencies in that its value can go up and down. As previously mentioned, many people have greatly increased their wealth through bitcoin, but others have significantly decreased their wealth too, so proceed with caution. 

The next hot topic relating to web3 and digital wealth is NFTs . Now this is one key area where to date we’ve seen a select few brands experimenting and dabbling. A non-fungible token, or NFT, is a piece of data that is stored in blockchain (remember blockchain), which means it is fully encrypted, securely stored and only accessible by the owner.

Typically, these NFTs present themselves in the metaverse as static or moving images, or art. A user can spend their bitcoin on a piece of code that is bespoke, unique and a true legitimate one-off, and that data may translate to an image, or a piece of digital art. If you own an NFT, you are the only person in the physical and digital world that owns that exact sequence of code. It can’t be copied or cloned because it’s stored in the blockchain. 

Hopefully you’re still with us…

Two really important discussion points relating to web3, which we can’t ignore as lovely and fascinating as it all is, are ethics and regulation. Although these terms might sound like they completely go against the core ideology of web3, it’s still important to consider them. If the data and information can’t be accessed, is owned by individuals and not governed by anyone, how can it be safe? Unfortunately, we don’t have the answer to that question, but it’s a key point we’ll leave with you. 

So, what does all this mean for you?

If you’re now wondering whether web3 is relevant for your brand, the answer is yes, possibly.

We’ve seen a few examples recently of brands, such as Coca Colaand Adidas for Prada, getting involved in NFTs. Not only did this generate a decent amount of PR coverage, engaging with a very innovative audience, but they also helped the brands affirm their position as being relevant. However, before deciding whether NFT activity is right for your brand, consider these three points:

1 – How digital has your brand been previously? If your brand is lagging behind digitally in other areas, then leaping so far forward with an NFT might not be the best thing to do. 

2 – Does it align with your personas? Are you looking to engage with a digitally-savvy audience? 

3 – Is it worth it? If your brand doesn’t necessarily already have a bit of a cult-like fanbase and following, consider whether an NFT from your brand is going to be of interest enough for people to get involved. 

The other key area where brands can adopt the web3 way of thinking is in the metaverse. Think of your digital spaces as more than just storefronts and window displays, and digitally take your audiences through the front door of your store to immerse them in your brand. We’ve seen elements of this a lot in the property sector and luxury space with virtual tours and fashion shows, but it doesn’t have to just be this way. The possibilities are huge. 

In summary, elements of web3 are probably too on the fringe and as much a subculture at the minute for them to be relevant for most, but there are areas which are already being taken seriously and adopted by innovative brands.

Hopefully this article has helped you understand just what web3 is as you consider your options for the future. If there’s anything covered here that you’d like to discuss or explore further for your brand, don’t hesitate to get in touch with the Next Chapter team. 

Some examples of web3 applications:

Bitcoin– we’ve already mentioned this one. It’s the original, but not the only, cryptocurrency. 

Diaspora– is a not for profit decentralised social media network. 

Steemit– another blockchain-based social media platform. 

OpenSea– is a marketplace for buying and selling NFTs. 

Everledger– a blockchain-based supply chain and authenticity platform.