Opinions expressed by Entrepreneur contributors are their own.
Last year, I wrote about the digital revolution and technological advances with blockchain technology, which you can read here. To sum it up, I said: “Blockchain technology can deliver compelling benefits, such as reduced counterparty risk, accurate ownership records, and fair distribution of value to key network participants. All stakeholders must come together to move the backbone of our financial infrastructure to this technology.”
While I talked about finance specifically, the truth is that blockchain technology is far more than just cryptocurrency. It is even changing how we think about entertainment and digital asset ownership. In California recently, an executive order was issued by Governor Gavin Newsom that focuses on blockchain-based businesses and urges California’s Business, Consumer Services, and Housing Agency as well as the Department of Financial Protection and Innovation to cooperate with blockchain-based companies. According to Governor Newsom, “Of the 800 blockchain businesses in North America, about a quarter of them are in California, dramatically more than any other state.”
Related: Web 3.0 Is Coming, and Here’s What That Really Means for You
Blockchain-based businesses are on the rise, but how will this affect other off-chain companies considered Web 2.0? What is Web 3.0?
Users are in charge of their information and identity in Web 3.0, also referred to as the Semantic Web or Linked Data Web. Web 3.0 is powered by blockchain technology, enabling decentralized peer-to-peer applications (dApps). A blockchain-powered Web 3.0 is controlled by users rather than a central authority. Because Web 3.0 is based on decentralized applications (dApps), it eliminates the need for duplicate data storage. Therefore, users can control their data and identity and decide who has access to it.
Web 3.0 is more efficient than the traditional web due to its dApps. Because of the efficiency, transparency and innovation Web 3.0 offers, I believe every business that wants to survive and thrive in the future of the digital world must adapt to Web 3.0. Here are three crucial reasons why being Web 3.0-ready is vital for your business:
1. Innovation and change
In the same way, businesses that didn’t adapt and utilize Web 1.0 and Web 2.0 technology (early internet, etc.) either died out or lost significant portions of revenue, because they failed to innovate. Some examples of businesses that were unable to stay competitive by a lack of technological and digital innovation would be Blockbuster, Polaroid and Borders Group. These three companies are prime examples of companies that either failed to stay up-to-date with technological innovations or failed to adapt to the emerging developments in the digital world (Blockbuster losing out to Netflix, Borders losing business to Amazon, and Polaroid becoming obsolete to the likes of digital cameras and DSLRs). If you wish to increase or sustain your business, I believe it is imperative that one stays competitive and adapts to modern innovations in technology.
Related: Why More and More Companies Are Embracing Web 3.0
2. Digital ownership
If your business has any intellectual property (logo, website, media) or any “digital assets,” then understanding the value of on-chain authentification of digital assets is imperative. You have probably heard of NFTs (Non-fungible tokens), which are digital tokens attached to a digital purchase or transaction. For example, let’s say you have a logo, picture, etc., that hasn’t been trademarked yet — essentially, if your logo or digital asset (even your idea) is uploaded onto the blockchain, you have security and proof tied to you through the blockchain.
The reason NFTs and blockchain technology are taking off right now is due to recent developments with transparent and traceable transactions on the blockchain (such as ERC 20), which allow people to trace the blocks back to the original owner. This is how artists can upload (a.k.a. mint) their art onto the blockchain and quickly sell their work. Art buyers can verify the provenience/authenticity of digital pieces and avoid counterfeit purchases or acquisitions.
This same principle could be applied to various scenarios, from IP protection of trademarks and patents to vendor authentification (making sure you’re paying the right person or vendor) through on-chain verification. Securities provided by blockchain transactions are immensely beneficial to both consumer and vendor and can not only prevent certain types of frauds, but will also increase credibility with consumers, and that brings us to our next point:
3. Credibility and mass popularity
Anyone currently in business or tuned into current affairs has probably been hearing about blockchain for a while, now more than ever before. But why? It is becoming popular with both consumers and vendors due to the secure and efficient way transactions are handled via the blockchain. Consumers know precisely who they are paying, and vendors see the value of verifiable transactions on-chain. For the first time, digital films, swag, documents, etc., can all be verified and authenticated in one of the most secure ways possible. I believe we are already starting to see many businesses and consumers favoring blockchain technology over traditional payment methods.
I think that as the popularity and accessibility continue to grow and blossom, companies who refuse to utilize blockchain tech will lose trust and credibility, as on-chain transactions will become favored by the majority of the population. The extra safety offered by blockchain comes from the way blockchain technology functions: Blockchain creates a record of transactions that cannot be altered or tampered with, which also has end-to-end encryption, which shuts out fraud and unauthorized activities. Eventually, due to the trust and efficiency that blockchain-based transactions offer, I believe off-chain transactions will become obsolete due to their increased risks of fraud and numerous vulnerabilities.
Related: From Web 2.0 to Web 3.0: How These Entrepreneurs Made the Switch
As I said in my previous article about blockchain and finance, this technology is changing how we live our everyday lives. From pictures of apes and significant financial transactions to the digital efficiency and security provided by advancements and innovations made through blockchain technology, it is no surprise that older off-chain (Web 2.0) technologies are quickly being replaced in favor of blockchain technology backbone and the entirety of Web 3.0. I believe that failing to adapt to this newest era of the world wide web will be akin to businesses who never adapted to the past innovations of Web 2.0 (Blockbuster, Borders, etc.). Therefore, making sure your business is Web 3.0-ready is imperative, because it will not only keep you competitive, but very soon, it will be a necessity for any businesses to survive and thrive in the future of the digital world!