Web 3.0 is the next big thing in the technology space and something which will bring a revolution on the internet, but how and when this will unfold remains to be answered.
As we transition into a Web 3.0 world with technologies like blockchain and non-fungible tokens (NFTs), consumers will enjoy better data security, transparency, and bandwidth speeds. Businesses will need to evolve to remain relevant.
World Wide Web: Looking back in time
Tim Berners-Lee set up the first ever web server in the 1990s. Although it was only accessible to government bodies and the military back then, this was the creation of the World Wide Web, the beginning of the internet.
Web 1.0 was the earliest version of the internet; so early in fact that the Domain Name System(DNS) didn’t exist, and users had to enter an IP address to access websites which were nothing more than simple displays of text with static links.
Web 2.0 began rolling out at the start of the 21st century. Websites became somewhat dynamic, landing pages became larger, and content became more interactive. With rising incomes, and the power of Moore’s law reducing the cost of compute power exponentially, access to computers and the internet increased dramatically and social media took off. The internet was now interactive and allowed considerably more user engagement through likes, shares, and retweets.
Big Data: A boon becomes a burden
The huge availability of data generated by the increased number of users during Web 2.0 allowed big corporations to send messages tailored for each individual user. The number of internet users increased from roughly 700 million in 2000 to around 5.4 billion in 2022, representing a more than 600% increase. Due to the novelty factor of Web 2.0, and the fact that it enables people to connect with others on social media platforms, people are often willing to share a large amount of personal information.
Although the original purpose of collecting and analyzing big data may have been noble in nature, it has also compromised the data of millions of users. According to a survey conducted by Sophos, an IT security firm, 41% of Facebook users were prepared to disclose personal information, such as biographical and contact information, to complete strangers. This shows the susceptibility of millions of people to identity theft and other forms of intrusion. As a result, the cases of online theft, cybercrime, and abusive marketing tactics have risen dramatically.
In addition to individuals, organizations have also faced trouble due to data breaches. According to the Ponemon Institute, which interviewed 550 organizations, 80% of businesses have faced a data breach more than once. In 60% of those cases, the data breach forced the business to raise prices, and led to financial losses exceeding $4 million.
The Evolution of Web 3.0
The concentration of data in the hands of big tech has slowly started to show its dark side. From collecting more data than they need to selling access to the data, end users have over time become increasingly aware that their privacy and autonomy are being impinged upon.
At times lack of data security has led to financial losses and reputational damage, and so people have started to consider their options for protecting private data that ought to remain private. This has led to an evolution from Web 2.0 to Web 3.0, which aims to “decentralize” the internet once more, and allow users to reclaim power from big tech.
Implications of Web 3.0
Web 3.0 will have significant implications in a broad range of industries, including fintech and data storage.
1. FinTech
The fintech space is growing rapidly. In 2022, the total value of digital payments is expected to exceed US$8.5 trillion. With such a large amount of value being transacted digitally, large financial intermediaries represent tempting targets for hackers and cyber criminals. For example, in 2014 Mt Gox, the world’s largest bitcoin exchange, was hacked and $460 million worth of bitcoin was stolen. Web3.0, with the aid of blockchain technology, offers a solution to this security risk by decentralizing the payments system and securing it with cryptography. This will not only make the payments system more secure, but also increase financial inclusion; providing access to financial products for people who live in unbanked regions of the world.
2. Data Storage
Data proliferation has made it difficult for companies to manage user data, leading to many instances of data hacks. Some brands like Uber, LinkedIn, and T-Mobile have already fallen prey to massive data breaches.
Web 3.0 offers a solution in the form of decentralized data storage. This would involve data being encrypted and shared via a peer to peer network. Rather than being stored at a centralized location, data would instead be stored on multiple nodes. This would not only enhance data security, but also ensure fast response times that accelerate technologies like IoT and AI.
The bottom line
Web 3.0 looks set to become the next big thing as it offers the vision of a more decentralized internet. This would not only increase data security, but also improve access to digital services in parts of the world where reliable institutions don’t yet exist.
Prateek Natani is an Associate Consultant at KPMG, and completed a Computer Science Engineering degree in June 2020. He is passionate about consulting and entrepreneurship, and his research interests include institutional strategy, technology, human development, and consumer behaviour.
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