The Wonders Of Web3: What It Is And What Brands Need To Keep In Mind

By Aqilliz  

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Web3

This February, Meta celebrates its 18th birthday, heralding a coming of age for the platform that more or less defined social media as we know it today. For younger generations, the idea of life before Facebook — or any form of social media for that matter — is hard to imagine. Social media was a game changer when it came to building and preserving relationships, but it also ushered in a new data-driven era in advertising. After all, this was the crux of Web2.

Web2 is the Internet as we know it today, an Internet dominated by big tech giants like Facebook, Google, and many others that form the ranks of walled gardens who have thrived on the mass user generation and sharing of content on their platforms. After all, consider every user account you’ve created, every post you’ve liked, or every link you’ve shared — the collective summary of all of your online activities, the many breadcrumbs you’ve left behind, have formed a holistic picture of who you are online. In turn, your data has been sold to advertisers, enabling them to better personalise what you see when you engage with a brand or a service. In monetary terms, your contribution is significant — consider that 80 percent of all Google parent company Alphabet’s revenue comes from its advertising which was valued at US$61.2 billion in Q4 2021.

But the time of Web2 is seemingly coming to an end. In part driven by regulatory impetus and technological changes, consumers too, are feeling shortchanged. According to a recent survey, 79 percent of consumers feel that companies know too much about them and 86 percent are now concerned about their data privacy. Here’s where Web3 comes in — but what is it and what will the industry need to keep in mind as a decentralised future looms on the horizon?

The building blocks of a new Internet

In 2014, Ethereum co-founder Gavin Wood coined the term Web3. It’s strange to think that amid the flurry of discussions we’re seeing today on the topic, often in tandem with the ‘metaverse’’, it’s actually been around for almost a decade. Ethereum, a decentralised, open-source blockchain network and smart contract platform, had a core differentiator — as Wood explains in his blog post, it “would allow people to interact in mutually beneficial ways without anyone needing to trust each other”, and all without gatekeepers “managing the flow of information”.

Since then, Wood went on to found the Web3 Foundation, dedicated to realising a peer-to-peer, fair internet where users have full control of their data and their identities online. In other words, “the foundation of the freedom of the individual”. The vision is pioneering, especially for users who’ve felt shortchanged in the traditional value exchange that’s been perpetuated for decades. What’s more, it addresses the core conundrum the brands, infrastructure builders, and advertisers are facing today in terms of data privacy and protection.

While Wood’s vision is far from being realised, the current work underway when it comes to Web3 has seen its share of sceptism. That being said, there’s a lot for the industry to keep in mind when it comes to tech. Let’s break it down.

A new tech stack

The Web3 tech stack is multi-layered by design, consisting of zero or low-trust interaction meta protocols that enable shared security. The logic goes, we don’t need to trust each other to ensure this network is secure if we all have a stake in how well it performs and all stand to lose something if that trust is breached. This is the underlying principle of a blockchain — a peer-to-peer, decentralised network that’s immutable, transparent, and trustless by design. These protocols describe the necessary rules for a node (or computer) to follow in order to participate in the network. Additional protocols are then built above this, allowing for encrypted storage and cryptographic enhancements, which ensure that data is secured while putting control in the hands of the owner rather than the data controller.

That might seem a little daunting, but Web3 offers something inherently private-by-design, one where the rules of engagement are encoded into smart contracts radically streamlining how brands can engage with consumers, but also how transactions are executed in a campaign environment. At Aqilliz, we’ve already started to implement technological enhancements that are part of the Web3 tech stack — from federated learning to differential privacy. If you need a refresher, check out our blog post here.

With the eventual demise and deprecation of third-party cookies, these privacy-centric Web3 enhancements show that it’s possible to rely on first-party data. At Aqilliz, our approach involves decentralised data collaboration. Brands can host nodes on our hybrid protocol, each of which are individual databases that mask data points in such a way that prevents reverse engineering. Each node is then joined by a federated node which ensures that data is decentralised within each of these databases while allowing analysis to take place across each node. The resulting audience profiles can then be activated to inform consumer engagement strategies through targeting and personalisation — all of which have been built on a foundation of ethically-obtained user data.

What about the metaverse?

While blockchain players such as Decentraland and traditional names such as Meta have made significant inroads in painting a clearer picture of what we can expect in the metaverse, one thing to remember is this Web3 and the metaverse are not the same thing. Web3 argues for a new vision of the Internet entirely. The metaverse imagines a future where the Internet — decentralised or otherwise — is more increasingly intertwined with our lives.

Where these two concepts arguably intersect is when it comes to the idea of ownership. Think of it: If so much of our lives are going to be lived on the metaverse, what will it mean to truly own something there. Non-fungible tokens — digital, non-interchangeable assets — help to address this gap; whether it’s an NFT of your digital identity or a digital artwork you own.

For example, decentralised domain provider Unstoppable Domains launched its new NFT domain offering to replicate the convenience of the SSO model offered by Google and Facebook. While NFT domains replace your personal email address, this domain is also 100 percent owned by you, is more secure, and prevents your data from being “mined and sold”. Et voila! A fully privacy-centric approach to digital identities and data sharing.

The Web3 economy

If a Web3 vision is fulfilled, we can expect to see a digital playground with new rules of engagement. Data monetisation will be an activity solely determined by users alone, rather than intermediaries without their consent. Automation will be an exercise in trustlessness — the rules underpinning any agreement, whether between business and business or customer and brand, will be encoded in smart contracts, where predetermined terms are set out. Beyond that, the plethora of user-generated content that exists today will be valued and rewarded, and those who reap the benefits will be the users and creators themselves, rather than solely the platforms.

From innovative models of governance and decision-making to a more peer-to-peer commercial landscape, the existing power dynamics that exist today between brands and customers will shift. For brands, the opportunities are there — they have a lot to gain, they just need to be ready.

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