Be it in the work environment, in private discussions with friends, or even on social media, it seems as if there is no way around the topic of Web3. And with reason – according to experts, Web3 will significantly shape our future. But while some people have already taken an early look at the development of the technology, question marks still loom for the large majority.
So, what is Web3?
Web3 is a decentralized, immutable version of the World Wide Web. The term was first coined back in 2014 by Gavin Wood, one of the founders of the Ethereum Blockchain. Web3 therefore follows Web 1.0 and Web 2.0, each phase representing great differences in their technology and processing.
The first phase, Web 1.0, refers to the initial period of the Internet, when the World Wide Web was characterized by static pages. Presently, we are in the Web 2.0 era. Here, the focus is on user networking through real-time communication and creation. This coupled with the Internet becoming less complicated and more readily available to a greater audience has enabled to it gain global adoption/reliance. Users create their own content, exchange information via platforms, and trade on the Internet. Large companies, such as Apple, Meta and Amazon, play a significant role here due to their size and influence, decisively shaping the Internet and how it is used. Experts refer to this as a “platform economy”.
However, the new generation of the Internet wants to turn away from this. The ethos of Web3 is supposed to be free of large gatekeepers, more networked, transparent and decentralized. A significant undertaking is said to be verifiability, which is possible through blockchain technology, the same innovation that has enabled cryptocurrency and on-fungible tokens (NFTs). There is also talk of a so-called “token economy”. This is to ensure that users can authenticate themselves independently of large platforms, move in a decentralized network, and be more in control of their data.
What is behind Web3?
According to experts, Web3 is set to revolutionize the Internet. In recent years, an increasing number of new technologies have emerged that can help shape this revolution. One of these is undoubtedly NFTs. These are proofs of ownership of digital goods and services. In turn, they are unique, non-substitutable digital assets called tokens (and hence the term “token economy”). Examples include works of art, domain names, or digital tickets.
Impact on the real world
As abstract as Web3 and its technologies may sound, it is becoming more tangible. If you take a closer look at sports business, for example, many touch points have already emerged. After all, the last two pandemic years have shown that sports must also position itself digitally, and that this requires more innovations than smartphone apps.
For this reason, sports clubs have increasingly sought to embrace new technologies. NFTs are now what Panini trading cards used to be. A well-known example is the “NBA Top Shop” cooperation between the National Basketball League and Dapper Labs that launched in summer 2020. On the platform, loyal fans can buy ‘Moments’, which combine NBA highlights and digital art. These Moments are video highlights encoded within smart contracts and made unique by their own serial number. The popular Moments are verifiably limited and therefore have a great value for passionate collectors. Moments can be purchased in packs, similar to the way the famous Panini trading cards are sold.
Another example of how sports are also enjoying great popularity in the digital space is Sorare. In the blockchain-based fantasy sports game, fans can buy, trade and sell their own virtual team on the platform. Similar to traditional fantasy sports, players can earn points based upon the on-field performance of their owned players. What sounds very simple at first, however, requires well thought-out strategies and relevant sport-specific knowledge from the real world. After all, the more a collector knows about his games, the better their team can perform and eventually win more in prizes.
In addition to a fun factor, Web3 can also offer security benefits for sports clubs and fans. For example, tickets can be sent as an NFT after purchase. With their unique serial number, fans and clubs can be sure that the tickets can neither be forged nor stolen. So-called POAPs (proof of attendance protocol) further ensure whether someone has attended an event or not. Here, too, both sides can protect themselves against fraud, and what’s more, the POAPs can be distributed as analogous stickers and thus act as an incentive for visitors.
One thing that experts estimate can have a huge impact on the sports business, however, is marketing spend. Through strategic placements and the use of new technologies, clubs can become not only trendsetters but also interesting for new investors and partners.
We are still in the early days and yet Web3 is becoming more real and significant for us. It is therefore essential to engage with the new iteration of the Internet and be a part of those that leverage the likely market opportunity.