Top 8 Web 3.0 trends and predictions for 2023 and beyond
It's still early days for the next major iteration of the world wide web, but that's all likely to change soon. Here's how experts say Web 3.0 will evolve in the coming year.
In case you missed it, a new generation of the world wide web is coming. The current iteration, Web 2.0, tends to concentrate content on social networks owned by big technology companies such as Google and Meta. In contrast, proponents claim Web 3.0 will be decentralized, enabling content creators to profit more directly from their works, which will often be paid for in cryptocurrencies and whose ownership will be verified by public entries on a blockchain.
After a year marked by the high-profile fraud case involving FTX cryptoexchange CEO Sam Bankman-Fried, make no mistake: Web 3.0 is evolving and growing.
Here are eight Web 3.0 trends and predictions to keep an eye on:
1. Tokenization of real-world assets, such as real estate, and using blockchain technology to track them. "One of the big innovations of Web3 are tokens -- both fungible and non-fungible assets that are inherently unique -- and the ability to program them with smart contracts that track them," said Avivah Litan, vice president and distinguished analyst at Gartner.
2. More failures in the cryptocurrency industry. Expect at least one more major cryptocurrency platform to fail in 2023, Litan said, not due to any weakness in blockchain technology, but rather human corruption. "Last year we saw a big Ponzi scheme -- 'pump and dump' -- but it had nothing to do with technology," she said. "Hopefully, we'll get all the fraudsters and the corrupt actors to go away." But this won't happen until regulators establish clear new regulations that they can enforce, she added.
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3. Enterprise use of tokenization. "We'll see tokenization being used for supply chain monitoring and financial use cases," Litan said. Case in point: Financial services company Goldman Sachs just made a $100 million bet on blockchain bonds.
4. Web 3.0 adoption gets real by the end of the year. Business uses based on Web 3.0 will soon go beyond experimentation to routine implementation. Gartner predicted that by 2024, 25% of enterprises will use centralized services wrapped around decentralized Web 3.0 applications. Examples of these include non-fungible tokens (NFTs) for lodging and office space and tokenized real-world assets being used as collateral for decentralized finance loans.
5. Convergence of simulated and real worlds. "Web3 technologies are enhancing the way humans interact with each other and increasing the ability to create immersive experiences," said Scott Likens, Innovation Hub leader at consulting firm PwC. Though they are not strictly identical, the metaverse intersects with Web 3.0 technologies, expanding the possibility of social networks where individuals create and then own their own works, as opposed to Web 2.0, where there tends to be centralized ownership of digital content.
6. Ethics will be established for Web 3.0, increasing trust. The development of enforceable regulations will increase trust in new environments such as the metaverse and those created by Web 3.0, according to Likens. But trust is created by human emotions, so technical provisions by themselves -- in blockchain, for example -- won't carry the day. The idea behind the Bitcoin cryptocurrency at its inception was that trust was built into the technology. There is transparency because everyone can see the transactions. But people seem to need more reassurance than that. "As enterprises, we have to create a trusted environment where people are responsible from the beginning, so our consumers know they can use this technology in a trusted way," Likens said. This is especially important in the wake of the highly visible cases of crypto fraud.
7. Blockchain costs are likely to come down. Beyond the built-in cost of storing information on a server, there are additional costs relating specifically to blockchain. "Gas fees" refer to money paid to people who verify the addition of content or the additional transactions in the distributed ledgers that exist on a public blockchain. "About a year ago, as things were exploding, the gas fees were very costly," said Tom Taulli, author of How to Create a Web3 Startup: A Guide for Tomorrow's Breakout Companies. As the technology takes hold this year, costs are likely to begin to level off as more competition comes on the market, he said.
8. High-profile consumer plays. Large companies from a variety of sectors are showing their "cool factor" by creating consumer experiences based on NFTs and cryptocurrency. Watch for splashy new creations. For example, Starbucks is reportedly finishing beta testing of its Starbucks Odyssey loyalty experience based on Web 3.0 technologies. Starbucks Odyssey members will be able to earn and buy digital collectible stamps (NFTs) that will unlock access to new, immersive coffee experiences. According to its website, Starbucks is one of the first companies to integrate NFTs with an established loyalty program, creating an accessible Web 3.0 community that will enable new ways to engage with members and employees. While it can be difficult to tell at this early stage how such a high-tech experience is justified by the purchase of a relatively low-cost commodity like coffee, it can be worthwhile to the brand to appear as an early adopter, Taulli said.
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