In association with Alkimi Stock Exchange
Even though Web3 is on the horizon (if not already), uncertainty remains about the value of certain elements of this new phase of the Internet. Technologies including blockchain, NFTs, cryptocurrencies, and the metaverse have emerged to varied receptions, with their proponents touting their revolutionary potential as loudly as their opponents have expressed their disbelief, and many remaining sitting on the fence.
Still, the belief that Web3 could completely restructure the ad tech industry is strong, and with the metaverse is expected to be worth US$5 trillion (~£4.03 trillion) by 2030 and the the ice melts somewhat on crypto regulationit seems that its technologies have a future. Here, we’ll analyze these aspects of Web3 to see if they have the potential to be truly functional, or if they’re ultimately gimmicky.
Blockchain
As the technology that serves as the infrastructure for Web3, it makes sense to start with Blockchain. Blockchain is a type of distributed ledger technology (DLT), an encrypted digital database that serves as a permanent record of transactions. Information is available to all network participants simultaneously and updates can only be made if the majority accepts the proposed changes and is added to pre-existing information – it does not overwrite it.
In a business environment, its secure, democratic and transparent qualities mean that blockchain can be used to speed up processes while providing clarity to all parties. A practical example of this are smart contracts, protocols on a blockchain network that automatically execute when certain predefined conditions are met. Smart contracts are already used to make business decisions that otherwise rely on some form of manual intervention – US retailer Home Depot does this. already using the technology to identify and correct issues within their supply chain in real time, improving trust and efficiency between them and their suppliers.
The women of Web3Niamh Linehan of , believes that “smart contracts will have a big year” and that blockchain will only increase in value for businesses. Speaking to the MadTech podcast, Linehan said that “more traditional industries, like banking and advertising, e-commerce and supply chain management” will begin to adopt blockchain technology to “help drive efficiency and open a global market.
Cryptocurrencies
One of the most controversial Web3 technologies, cryptocurrencies have become a hot topic thanks to the implosion of trading giant FTX late last year (among other disturbing events). Many are wary of the technology’s usefulness, attributing the excitement to currencies such as Bitcoin and Ethereum. like something akin to Tulip ManiaAnd warning about the insecurity of investing in a volatile and almost completely unregulated asset.
Crypto proponents, on the other hand, argue that the technology has the potential to provide an improved monetary system. As they are hosted on blockchain networks, cryptocurrencies offer more secure transactions between participants, as individuals can only access the blockchain with the correct credentials. As the currency of a decentralized financial system, the value of crypto is not dictated by a bank, but rather by the consensus of those who use it, which some argue makes it more democratic than the system fiat monetary. Alejandro Gutierrez, CEO of Web3 Company Defactoring Labsargues that decentralized finance is the way forward: “DeFi EAST the future of financial infrastructure. The benefits it can bring to financial systems, such as visibility, democratization of investment, efficiency and inclusion, are in fact the antidote to the problems at the heart of the FTX and Celsius collapses, where centralization and lack of transparency were at the heart. elements of their fall.
Recent events may have fueled crypto skepticism, but they haven’t dealt a fatal blow. Gutierrez is optimistic that the scandals of the past year will benefit cryptocurrencies in the long term: “There is no doubt that 2022 was a difficult year for crypto, in part due to the fallout from the FTX and Celsius, numerous crypto hacks, and the resulting loss of investor confidence. But, in my opinion, it has helped weed out bad actors and will allow those in the ecosystem who are capable of solving real-world problems to show their true value in 2023.”
NFT
Like cryptocurrencies, non-fungible tokens (NFTs) have sparked a lot of anger, with many questioning their applicability. To some commentators, NFTs appear to be just virtual images that consumers have spent up to several million to (so to speak) get your hands on it.
However, others argue that NFTs are more than just expensive collectibles. These tokens have real potential to create a new path for consumers and interactions with brands by offering exclusive rewards for loyalty and engagement. We’ve already seen some brands do this, like McDonald’s, which offered ten exclusive McRib NFTs as part of a Twitter competition. Skincare brand Clinique, meanwhile, offered members of their Smart Rewards program a chance to win an NFT by uploading a short video to Instagram and tagging the business.
Another facet of NFTs is their use as proof of membership in a decentralized autonomous organization (DAO). DAOs can issue their members with tokens, which prove their involvement in the group and can be used as voting rights. Linehan suggests that this can give big brands the opportunity to give their fans more say in certain aspects of the business: “you could have, for example, a DAO of super fans who sit on the board of directors of a football team (…), it’s a fan vote at board level.
The metaverse
Like NFTs, the metaverse has drawn derision from some. The boss of Meta, Mark Zuckerberg efforts to introduce the metaverse to the massesin particular, generated more than some raised eyebrows about the real progress of the technology. Reports that Meta Reality Labs burns its funds without making a profit further shook investors‘ confidence in the company. This apparent lack of enthusiasm for the Metaverse appears to have spread outside the United States, with reports that only six people attended a virtual launch party on which the EU spent millions of euros being a particular source of embarrassment.
However, despite the scathing headlines, the metaverse is growing in popularity globally. In APAC, for example, millions of people are engaging on virtual platforms such as Roblox, Decentraland and Zepeto, suggesting that the The impact of the metaverse on GDP in Asia could reach US$1.4 billion (£1.1 billion) by 2035.. In the United States, a number of large companies have begun testing Meta’s Horizon Workrooms, including NASA, where more than 10% of Jet Propulsion Laboratory employees reportedly use Quest 2 headsets.
This new plane has sparked interest from major companies, with some high-profile brands already experimenting with the metaverse. High fashion brands Dolce & Gabbana and Estée Lauder, for example, participated the first Metaverse Fashion Week in 2022an event that attracted 108,000 unique attendees despite technical issues. An entertainment powerhouse Disney has also dove headfirst into virtual reality aspirations to use the metaverse to deliver immersive experiences to customers around the world. As is the case for Web3 as a whole, the metaverse is certainly in its infancy, but the way brands are already interacting with the virtual world paints a promising picture. With analysts now predicting that ad spending in the metaverse will reach between US$144 billion and US$206 billion (~£116.3 billion and £166.3 billion) by 2030the potential of the space for brands is much closer than you think.
