By Ihor Shalimov JavaScript Team Leader at MobiDev

Everyone is talking about Web 3.0, discussing the possibilities that the new generation of web will bring to business. However, despite all the talk, the concept of Web 3.0 still looks more like hype than a real opportunity for business development. Or not? Let’s figure it out.

How Web 3.0 is Changing the Rules

Web 3.0, or Web3, is the internet’s third and latest generation. Built on decentralized ledger technology (DLT), it aims at providing a data-driven and trustworthy UI that serves every user. Blockchain, Semantic Web, and metaverse are all expected to play significant roles in Web3, creating a whole new and improved human-machine interaction experience. Its advantages are already used by medical, educational, entertainment and financial companies.

So, what is the revolutionary nature of Web 3.0 and how can a business benefit from it?

• Elimination of third-party service providers. Thanks to blockchain and smart contracts, businesses have more opportunities to interact with customers directly, bypassing institutions such as banks, which reduces costs. Since smart contracts are executed by validators on the blockchain, they eliminate trust issues and offer more transparency.

In addition, Web3 technology makes it more cost-effective for companies to provide users with loyalty rewards. For example, instead of spending money on issuing and storing bonus cards, you can reward customers with crypto or NFTs without being tied to payment systems. Plus, this process can be automated using smart contracts.

• Better visibility. Distributed systems solve trust issues, because all data is stored on the blockchain and can be verified. Such types of blockchains as public, private and permissioned allow you to configure different levels of access to information depending on the specifics of the business. For example, in the Monero network, only transaction participants can track and access data.
• Improved data security. In Web2, all information is stored in centralized systems, which has repeatedly caused security and reputation issues for companies (remember the recent scandal with Meta).

Web3 aims at allowing users to choose what information they want to share and with whom. In addition to the obvious benefits for users themselves, businesses also take advantage of storing data in a decentralized, community-controlled network. You will not have to take additional measures to protect user data and will not need expensive servers and data centers.

Since all of the above may sound more like concepts than real use cases, let’s take a look at the actual market players who are bringing Web3 and blockchain ideas to life.

Who is Out There on the Market?

If a few years ago crypto was the privilege of a few circles of enthusiasts, today this asset is being actively promoted among the masses. There were so many cryptocurrency commercials at this year’s Super Bowl, including Coinbase, Bitbuy, and eToro. Despite the fact that a 30-second spot in the advertising line cost about 7 million dollars. Isn’t this a sign that crypto and blockchain are getting closer to the majority?

Entertainment

Probably, if you have heard of crypto, you have heard of play-to-earn (P2E) games. Unlike regular computer games, P2E rewards players for their time and effort. At the forefront of this industry is The Sandbox, which allows the player to buy a piece of land and build their own creations. Other examples are a trading card game Gods Unchained and of course, Decentraland where you can buy and sell real-estate as NFTs in the Metaverse.

If you think that this all sounds frivolous, consider the fact that, according to MetaMetric Solutions, people spent $501 million on virtual real estate in 2021, and this number is expected to increase. For example, the most expensive of these purchases in 2022 was an NFT house that was sold for $175,000 on the Roofstock NFT marketplace.

Crypto Casinos

Such sites as crypto casinos that accept virtual currency deposits are gaining great popularity as well. For example, Stake offers a variety of sports/games, accepts 130+ cryptocurrencies and provides excellent customer support demonstrating that crypto casinos can be a serious business model.

Smart contracts are a crucial part of such businesses since they provide transparency and ensure that the result of the game can be verified. However, when developing such projects, it is important to remember that the execution of smart contracts is paid, and the price depends on the chosen network and execution time (for example, Ethereum is a popular but more expensive network).

Education

Since learning began to transform from in-person teaching-learning to an online teaching-learning format, it became obvious that modern Web technologies are not effective enough, immersive enough and personalized for these purposes. In this context, the metaverse looks like an excellent solution, providing students with the effect of real-time presence and offering a number of rewards for learning.

Also, students can store their academic information and awards in a digital wallet on the blockchain. This is exactly how the idea is implemented by Proof of Learn, a Web3 education platform that offers students the chance to learn to earn. Their premier project Metacrafters allows users to learn how to code on the blockchain by immersing them in an exciting game.

Financial Services

The transition to Web 3.0 contributes to the growth of digital assets and the digital economy, so this model needs updated financial systems. This is where fintech companies come into play.

We can’t deny that cryptocurrency as a payment method is becoming more significant. Traditional money transfer services make money by charging for transfers, deposits, and withdrawals and on the exchange rates when converting money. With crypto assets, you can do exactly the same operations but with lower fees, which is especially beneficial for international money transfers.

Crypto payments are gaining more and more popularity as businesses, including giants such as PayPal, Visa, and Amazon, add cryptocurrency to their payment options. The advanced  financial software development process includes the integration of cryptocurrencies to meet the needs of the market. At the same time, crypto is actively integrating with traditional financial systems.

For example, Crypto.com released a Visa debit card that allows users to spend their crypto and earn interest back in crypto rewards. Binance also launched a crypto-based Visa debit card that allows real-time conversion of crypto to EUR during a transaction.

Known Blockchain Challenges that Bring New Opportunities

Let’s be realistic, all these use cases look exciting, but the blockchain underlying Web3 has certain challenges that you should be prepared for during implementation.

• Scalability – When scaling, the vast majority of blockchains slow down transaction speed, which creates issues with developing large-scale apps. However, there are more and more additional solutions addressing this problem (such as on-chain scaling solutions and layer 2 solutions).
• Speed – Blockchain is not ideal for everyday transactions because of possible speed problems. There are no guarantees of a transaction until it is confirmed on the blockchain, which can take quite a while depending on the network. But a properly selected technology stack and application architecture will allow you to get a good result.
• Volatility –The volatility of cryptocurrencies is the price investors pay for their lack of a central bank and limited supply. To stabilize crypto, various solutions are used (stablecoins, for example).
• Trust issues. Blockchain and crypto can actually be complicated for the average non-techie. Therefore, the #1 task of every Web3 project is to reduce the distance between crypto and the real world and create a UX that will help users get started easily.
• Restoring issues. There are many stories about how people lost all their money when they lost their private keys. Restoring a wallet is an almost impossible task if you haven’t saved your 12-word backup phrase. This stops many people from investing in crypto. However, as a business you can reduce this fear and offer new solutions.
  For example, a multi-signature wallet requires multiple signatures to complete a transaction. So the loss of the keys by one person will not lead to a complete loss of access to assets by the company.

However, one should not forget that challenges are not only obstacles but also new business opportunities. If you find a way to solve one or more of the listed problems, then you have every chance to enjoy quick success.

For example, ENS Domains found a way to simplify interaction with crypto platforms for users of the Ethereum network, giving them the opportunity to choose a wallet name that they can use to transfer and get funds instead of using a long wallet number.

What is the Verdict?

Although blockchain technology presents a few challenges, it offers some benefits businesses cannot achieve in other ways, such as peer-to-peer transactions, transparency, etc. Implementation of blockchain is the number one step to moving your business towards Web3.

Business success can only be achieved by those individuals who are brave and daring enough to try what others are afraid to do. So, enlist the support of experienced blockchain developers and get ready for the Web 3.0 future.