The Web3 Journey for Businesses: Part 1

How should a business approach its entry into Web3? In part one of this series, we'll discuss some of the challenges that businesses face when exploring this new space.

Gabe Higgins
December 28, 2022
The Web3 Journey for Businesses: Part 1

Typically, businesses are not on the forefront of innovation, because innovation comes with uncertainty, which is anathema to how businesses function. Businesses need stability and assurance when making decisions that could impact their growth. On the other hand, those who do not innovate could get disrupted by other industry participants that have successfully integrated technology into their business processes to increase productivity, lower costs, and outperform their competitors.

By now, nearly everyone has heard of Bitcoin, NFTs, and this evolution of the Web that is referred to as the 3rd era of the digital age. Web3 is the umbrella term where cryptocurrencies, blockchain technology and the metaverse are classified, which basically combines our physical reality with a new digital realm.

The question is how does this impact businesses in the near term and the long term? How can businesses start adapting to this new multiweb reality that combines the standard business practices and software tools from previous iterations of Web technologies?

One of the challenges with every new technological innovation is the need to learn and adapt. New concepts, new tools, and new ways of progressing to become more competitive. More often than not, this is where the most friction in adoption of new technologies happens. Progress comes to a standstill; there is this seemingly insurmountable hurdle that makes it too costly or risky to move forward.

Web3 is no different in this regard. It requires a specific knowledge of the technology stack, it’s capabilities, and the infrastructure needed to support the decentralized applications (dApp) an organization is running. To get started, one of the first steps is finding a way to connect to these decentralized environments and the most common way is an API endpoint.

Web3 endpoints are a key component of the decentralized web, or web3, which refers to the use of blockchain technology to create more decentralized and secure web-based applications. They allow developers to build dApps and tools that can interact with decentralized networks and platforms in a more transparent and secure way, unlike traditional centralized systems.

One of the main advantages of dApps is that they are built on (or should be built on) a decentralized network, which means that they are not controlled by a single entity or authority. This can make them more secure, transparent and resilient, as there is no central point of failure that could be targeted by hackers or other malicious actors. In addition, decentralized applications often use smart contracts to facilitate automated interactions between parties, which can help to ensure that these interactions are transparent and trustworthy.

For businesses, this could be a shared system of record or process between industry partners, vendors, or suppliers where trust in the data is needed to do business, but no single entity has overarching control to have false or misleading information. Creating a stronger foundation to build reliable and more flexible B2B processes, while reducing overhead costs with reconciling or other errors.

Another benefit of dApps is that they can offer greater control and autonomy to users. Because dApps are not controlled by a central authority, users have more control over their own data and interactions, and can make decisions based on their own preferences and needs. This can be particularly useful for businesses that want to give their customers more control over their own data and curate an experience that feels centric to the customers wants and needs.

Decentralized applications also have the potential to disrupt traditional business models and create new opportunities for innovation. For example, businesses could use decentralized applications to build new types of marketplaces, create new financial products and services, or even create new forms of governance and decision-making.

Overall, decentralized applications and web3 have the potential to offer significant benefits to businesses, including increased security, greater control and autonomy, and the ability to create new opportunities for innovation. As the decentralized web continues to grow and mature, businesses adoption is expected to continue to grow with these technologies and leveraging their full potential.

The next post will take a more indepth look at specific businesses and use cases already using Web3.