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Real Life Applications of Web 3
This section provides some real life examples of how the blockchain technology is being used across different industries.
Real Life Applications of Web 3
The blockchain is having and will continue to have an everlasting global impact. Blockchain first saw the light of day when the initial Bitcoin white paper was released in 2009, with the sole purpose of serving as a decentralized form of currency. At that time no-one could have predicted that the underlying technology would transform the world.
The internet started with Web 1.0 in the 1980s, where we could read and digest information from the internet (read-only). In the early 2000s, the internet evolved from read to read and write. This was the emergence of Web 2.0, which enabled any user to write and contribute to the internet. We can see today that many industries were disrupted by the rise of Web 2.0, and an immense amount of wealth transfer and creation happened in the past two decades; just think of Mark Zuckerberg, Larry Page, and Jeff Bezos who rode the Web 2.0 wave since its inception. Eight out of the ten richest people in the world are a product of Web 1.0 and Web 2.0.
Web3 is the next evolution, and it is about to have a similar influence, but with a much wider distribution of wealth than with Web 2.0. Web3 takes Web 2.0 up a notch by adding one key element: ownership. With the ‘read, write, own’ proposition, we believe that the Web3 revolution will be even faster than the Web 2.0 revolution, due to the existing internet infrastructure, its availability globally, and its open-source nature.
Some applications are already changing millions of lives and disrupting industries
As we are in the early stages of the Web3 revolution, we’ve only seen very little of what blockchain technology can bring to the table. However, this technology has already crept into some industries and the results have transformed perceptions of what it can truly change.
One way that blockchain technology is disrupting the banking industry is through the increased efficiencies that it offers by allowing peer-to-peer lending and borrowing without the need for a trusted middleman. Lending activity in traditional finance is often done by or through banks who keep the majority of the profits. A blockchain-based protocol called Aave allows users to directly lend to borrowers. Both sides benefit from the elimination of a third party, which optimizes rates for both sides. To date, billions of dollars have been borrowed on platforms like Aave, Compound, MakerDAO, and others.
The ‘Ownership’ element of Web3 is key to its success
The business models of Web 2.0 companies such as Google and Meta are built on gathering user data and then selling this data to advertisers. Users benefit from using Google by getting instant access to information, while Google sells the users’ data to companies that will target the users based on their searches. In the case of Web3, the user is rewarded with a share of the ownership of the platform (Web3’s version of Google). This means that the user can also benefit from the profits generated by the platform. While in Web 2.0, the user is the product, in Web3 the user becomes the product and the owner, altering the dynamics of the entire relationship between the advertising companies and the users.
A real-life example of this is a freelance marketplace called Braintrust, which matches talent with jobs. Although there are thousands of existing (Web 2.0) freelance marketplaces, the key difference between the two is the fees charged. Web 2.0 companies connect the freelancer with a company and charge both a fee (usually 20-40% combined), whereas Braintrust dramatically reduces the cost to the company to 10%, and does not charge freelancers at all. This automatically attracts the best talent while distributing value more equally to the freelancers in the network. Moreover, freelancers who have completed a project via Braintrust end up receiving a token of ownership in Braintrust. This enables them to benefit from Braintrust’s future profits as well as vote on important matters and shape how they would like to see the platform evolve.
Another example is music and digital ownership. Historically, record companies and music streaming services have retained up to 80% of the revenues generated by sales and plays, with just 20% going to the artists. Web3 has changed this by giving artists the infrastructure that enables them to distribute their music directly to their fans and keep the majority of the revenues generated for themselves. If an artist chooses to use music NFTs, this approach will also benefit the artist’s fans by giving the fans ownership in the music collected as well as a share of the royalties. The artist will essentially have their own community that consists of fans who are willing to invest in them and do the work that has traditionally been the responsibility of record labels. This means that artists no longer need to have hundreds of thousands or millions of fans to make a living. Audius is one example of a platform that is taking this approach today by connecting artists directly to their fans whilst keeping the artists in control over how they would like to monetize their work.
To sum up, in Web 2.0, the corporations receive the money first and pay the creator last. In Web3, the creators can interact with their fans, receive payments, and promote content directly. No middlemen are taking 99.9% of what is due to the artists and creators. In Web3, not only do the creators get ownership of their work but so do their fans. Now, creators can transform their images, photographs, songs, and videos into NFTs, and continue to provide NFT owners with a share of any profits made from the underlying content.
The above examples are only a few of the many ways that the blockchain revolution is changing our lives. Many others are already in place and many will keep emerging as the impact and breadth of this technology evolves and reaches more people.