In the time it will take you to read this article, the world of technology will undoubtedly have taken another small step, or even a giant leap forward.
Along with the Fourth Industrial Revolution which is characterised by rapid changes to technology and its applications, Web3.0 is the next buzzword taking us further and further into the future. And the future is now.
Web3.0 is the next iteration of what we know simply as the internet. When it was conceived or launched in the 1980s it operated with open protocols and the data that passed through its channels was rarely captured. We then moved into the second phase, in which user data such as online identity, transaction and usage histories, and credit information was captured by various large tech companies, aggregated and often sold on. Data function and governance are in the hands of a few mega players, not in the hands of the users themselves.
Web3.0 is moving back to giving the power to the user, utilising permissionless decentralised blockchains with governance that is effectively self-regulating. But Web3.0 has had a rough ride of late, with cryptocurrencies and Non-Fungible Tokens (NFT) transacted through its platforms declining in number and value. However, these can be seen merely as fluctuations to which any market is subject and so players looking to enter this new space, should ensure all risk protocols are in place and then begin to leverage the many advantages this brave new world offers.
Web 3.0 and the Metaverse
Web3.0 is bringing forth the metaverse. In the current version of the internet, we are on the outside looking in and merely browsing or window shopping, in the metaverse we enter the store and try on and try out everything it has to offer, experiencing it from the inside. In the metaverse, we meet, play, are entertained, shop and transact. It is a virtual world which mimics the real world using artificial intelligence, and virtual and augmented reality. Decentralising content and usage have massive implications and benefits for programmers, content creators, and general users in terms of monetisation of this new version of the internet.
Web3.0 and the Metaverse have already produced a range of businesses and an economy of its own. Avatars need styling; to be dressed as you like to dress in the real world, live in a home with furniture, fixtures and fittings, and other elements are traded through Web3.0 via cryptocurrencies such as Bitcoin and non-fungible tokens (NFTs).
With Web3.0, the vision is for data ownership and control to be back in the hands of communities and away from the monopoly of big tech companies, which has been a major drawback of the current internet structure. Web3.0 data is stored in blockchain, with access to the information spread across multiple platforms. As Web3.0 is ‘permissionless’ – users will not be required to enter specific information to access the web, it is also more secure as it is difficult for hackers to target databases in which masses of personal data is stored.
How does Web3.0 integrate into the world of fintech and financial services?
Cross-border payments and money transfers on Web2.0, or the current internet structure, can be cumbersome, wieldy, and lengthy. Web3.0 technology will allow for more efficient cross-border transactions by connecting global financial institutions with interoperable systems that are more efficient and cost-effective. By incorporating Web3.0 blockchain technology, the cost of international transactions by banks can be reduced and efficiency increased.
In the traditional payment infrastructure, micropayments failed to take off due to the poor integration of the web and the relatively high cost of the transactions. Now, with the introduction of Web3.0, micropayments will be feasible and ad hoc, not requiring account set-up and/or subscriptions.
What is the future of Web3.0 in the payments space?
Web3.0 is still in its fledgling stages. It needs extensive revision in terms of governance, regulation and security, but it is inevitable that it will develop into a stronger and more secure version of the internet as we know it. Its key features of being permissionless, transparent, and immutable, with significant programmability and interoperability have huge potential for the opening up of the fintech environment including lending, insurance, tokenisation and current card schemes.
Web3.0 might feel like an interesting but distant buzzword today, but it is going to change the landscape of our online world in a very significant way.