Everything You Should Know About Web 3.0

As the CEO of SaaS Partners, I have a front-row seat to the latest in technology. We advise and collaborate with the world’s best startups to help them leverage technology to optimize their operations and achieve serious scale.

I can’t think of a single conversation I’ve had with a tech founder in the last year that didn’t include some mention of Web3, crypto, or NFTs. While some people can’t believe hundreds of thousands of dollars are being spent on a Mega Yacht in The Sandbox and Bored Ape NFTs displayed on Twitter profiles, others believe this is just the beginning. What they all seem to have in common is that they all “want in.” And yet, very few understand what’s really unfolding or where to start.

So, before you go out and buy that digital Gucci handbag in Roblox or set up your virtual office headquarters in Decentraland (as the Barbados embassy recently did), I’d like to give you the low-down on what I believe to be critical issues affecting the continued development of Web 3.0. I’ll walk you through what it will take to resolve them and, in light of all of this, what you can start doing now to ensure your business has a competitive advantage when the “future of the internet” arrives in all its glory.

The majority of people are susceptible to marketing hype. The majority of people are uneasy with what they don’t understand.

Most people will only learn something new if it is thrust upon them and they have no choice. That should not be you.

The difficulties that Web 3.0 faces

The majority of those behind the recent hype cycle surrounding Web3 are simply looking to make a quick buck. If, on the other hand, you want to participate in a more long-term and strategic way, I’d encourage you to first understand the challenges that the underlying infrastructure on which the new virtual world is being built is facing. While I believe Web 3.0 is a foregone conclusion, I believe it will take us at least 5-10 years to achieve it.

There are numerous limitations to blockchain technology, including its cost-efficiency, scalability, accessibility, and user experience, all of which make mass adoption a medium to long-term prospect.

Cost

One of the blockchain’s primary appeals when it was first envisioned was the ability to conduct costless transactions. After only a few years, blockchain technology is proving to be extremely expensive and energy intensive to operate.

Governments are becoming concerned; China, formerly a major hub for crypto mining, has gone to great lengths to limit crypto operations by outlawing crypto mining. Amid energy concerns, several other countries, including Sweden, Russia, Kosovo, Iceland, and Kazakhstan, are following suit.

It is encouraging, however, to see a significant shift toward the use of more environmentally friendly methods of natural gas, hydroelectric, wind, and solar projects popping up to power crypto mining. Even at the most granular level, there is a lot of innovation going on. To avoid the high transaction costs, most decentralized apps put very little code on the actual blockchain, and I am seeing more startups working on alternative ways to monetize the network to offset those costs. While significant progress is being made to make this technology more cost-effective, I believe cost remains a significant barrier that must be overcome in the near term.

Scalability

Transactions become slower in a decentralized network because every transaction or change in state must be pushed through the entire peer-to-peer network. The computing power required for this is phenomenal, and transactions that were supposed to be near-instantaneous frequently take a long time to process or require extremely high “gas fees” to speed up transaction times. “Gas fees,” for the uninitiated, are payments made by users to compensate for the computing power required to process and validate transactions on the Ethereum blockchain. As a result, the ostensibly “free” transactions can become quite costly.

Another source of concern is that Intel, the world’s leading microchip manufacturer, has stated that, while we will be at 5-10 times our current computing power over the next five years, we will need to be at 1000 times to make Web3, and eventually the metaverse, a reality. To address the issue of scalability, I’m seeing an increasing number of projects experimenting with off-chain transactions in the hopes of improving processing times (only to return to the blockchain to complete the transactions) — but these “solutions” have their own flaws, including issues with consensus and governance.

So, while software innovation is faster than we’ve ever seen, there’s still a massive gap here; hardware is several orders of magnitude behind the software.

User experience

We all prefer to work with interfaces that appear to be intuitive. This is why we prefer to book vacation rentals through Airbnb’s website. That’s why we enjoy hailing a ride with the Uber app. If you’ve ever tried to do anything on the blockchain or interact with Web3, you’ll know there’s a steep learning curve involved. Your current web browsers will not allow you to access Web3 experiences directly. For Ethereum, you’ll need a MetaMask wallet. For your Solana, you’ll need a Phantom wallet.

You have to go through the process of installing a slew of browser extensions or plug-ins just to get the most basic benefits, and it’s all very time-consuming when compared to the simple web browsers we’re used to. For mass adoption to occur, Web3 must become significantly easier to access and navigate. And the general public will require educational materials and training on how to get started.

Accessibility

The final major impediment to the realization of Web 3.0, in my opinion, is accessibility; Elon Musk’s Starlink is still figuring out how to bring internet connectivity, i.e., Web 1.0 and Web 2.0, to many parts of the developing world.

In addition to reach, we’ll need large-scale hardware upgrades for both servers and end-user devices, as current mobile and IoT devices aren’t ready for the Web3 revolution.

When you think about it, despite all of this, we’re moving at a rapid pace. The automobile took over 50 years to reach mass adoption, while the internet took about half that time. While we will not need as much time to achieve an open and permissionless web, we still have a long way to go.

The steps you can take right now to position your company for the future
Now that you know a full-fledged Web3 is a few years away, what’s the best course of action you can take right now to ensure you’re on the right side of the wave? Begin by taking three simple steps.

Learn more about yourself

How well do you understand the fundamentals underlying Web3? What projects or programs are you following up on? Do you have a resource dedicated to understanding industry movements? To get started, you should think about how you want to position your brand as a Web 3 player in advance, so you don’t have to scramble to catch up.

Set up Google Alerts and track the keyword “Web3.” After you’ve done that, you’ll receive a daily email with a summary of everything significant happening in the space.

Study the pioneers 

Brands looking to gain a first-mover advantage have already begun to make Web3 and metaverse bets. Consider Nike and Adidas. Consider Pepsi. Consider Zara. Consider Snoop Dogg. Snoop Dogg, you’re right. What can you take away from them? Which projects do they intend to pursue? How are they putting themselves forward? How successful have their initial coin offerings (ICOs) or new token offerings (NFTs) been? What issues are they attempting to resolve? What changes have they made to their business models? What went wrong for them? You’ll be able to move faster if you learn from their mistakes as well as your own.

Begin small

As business payments and transactions become decentralized, Web3 will have an impact on the future of business finance. I’ll just assume that someone has recently thrown the term “DeFi” at you. To stay relevant and send/receive payments in Web3, you will need exposure to decentralized finance, or DeFi. However, this does not preclude you from starting small. For example, one of the simplest ways to get started right now is to open your wallet and purchase a Web3 domain to launch your Web 2.0 and Web 3.0 experiences. Consider how difficult it is to find a simple.com domain right now. Web3 domains will experience the same fate sooner rather than later.

Another advantage is that you will own your Web3 domain rather than renting it from GoDaddy or Google, as most of us do today. To purchase your domain, I recommend using the Ethereum Name Service (ENS). You can then link it to your wallet address, tying your identity and transactions back to you.

You can then provide customers with an easier way to pay you rather than sending them your wallet’s hex address, which is absurdly long and easily transposed. With that, you’ll be off to a great start.You don’t have to go all out — just try to get a little more familiar each day with foundational concepts of Web3 so that you’re ready to pivot when the time comes.