The term “Web 3.0 or Web3” was coined in 2014 by Ethereum co-founder Gavin Wood, and the idea gained interest in 2021 from cryptocurrency enthusiasts and large tech companies.
Web3 is still evolving and being defined, as such, there is not an established and universally accepted definition. Yet, Packy McCormick, an investor who helped disseminate Web3, has defined it as “the internet owned by the builders and users, orchestrated with tokens.”
The concept of Web3 can be both puzzling and vague, and to help provide an understanding, here is a quick review of the evolution of the internet over the years:
Web 1.0 — The Static Web (around 1990–2005). It was made of read-only webpages that, by and large, lacked much in the way of interactive features. Content generation was limited, and information was hard to find.
Web 2.0 — The Dynamic Web ( from around 2004 ). Made of new software applications built on the web. Most of the value is generated from companies such as Google, Apple, Amazon, and Facebook.
The vision of Web3 tends to be a more democratic version of today’s online and digital works, where Web3platforms could give creators and users a way to monetize their activity and contributions. For example, PIXIE a crypto version of TikTok or Instagram rewards all social interactions with cryptocurrency PIX, which is called “social content mining.
There are many different paths to the evolution of Web3, but industry opinion leaders often suggest the following characteristics to help define Web3:
- Semantic Web: Enhanced web technologies that allow users to create, and share a link material through search and analysis. The search and analysis capabilities with Web3 would focus more on understanding the meaning of words and the context behind them.
- Decentralized: Unlike Web 1.0 and Web 2.0, where governance and application were largely centralized (think about Facebook/Meta), Web3 will be decentralized, with all applications and services enabled by a distributed approach where there is not a central authority.
- 3D Graphics or Metaverse:Some tech experts refer to Web3 because of its potential to create a new level of immersion and interaction between the physical and virtual world or metaverse. Pioneering applications are being seen across all industries from gaming, health, real estate, and e-commerce.
- Artificial Intelligence: The combination of semantic capabilities and AI will allow significant improvements to understand a multitude of data and provide faster and more relevant results (e.g., climate prediction or human-based corrupt practices such as biased product reviews).
Other features of Web3 include Ubiquity (i.e., anywhere/everywhere), Blockchain (i.e., decentralized ledger), and edge computing.
Key trends of Web3 in 2023
As Web3 embraces these features, and continues to use blockchains, cryptocurrencies, and NFTs to give power back to the users in the form of ownership, we continue to see many companies supercharging their brands with this technology.
Here are some of the key Web3 trends to look out for in 2023.
Industry to increase emphasis on cybersecurity
Web3 offers several benefits for users, such as data ownership, transparency, and fewer intermediaries, but it raises concerns with novel security threats. Some examples include smart contract logic hacks, crypto-jacking, rug pulls, and ice phishing.
Along with cryptocurrencies, NFTs have also become an increasingly popular target for scammers.
With the growing concerns in the field, a number of start-ups are growing on developing security, data, monitoring, and storage solutions for Web3, and this trend is observed by a growing number of industry investments:
- Immunefi: a bug bounty and security services platform for DeFi has raised $24 million as part of its Series A.
- CertiK: a leadingWeb3 security company raised $88 million earlier this year in its Series B3 financing round.
- Halborn: a cybersecurity firm serving both traditional finance and blockchain-based clients raised $90 million in its Series A financing round.
More investments and emphasis to make the Web3 experiences as secure as possible will help reduce scams and also make companies more comfortable in investing in Web3-related projects.
Market growth will be driven by Metaverse investments and M&A deals
The Web3 space will continue to attract investments driven by two forces: metaverse-related projects and metaverse mergers and acquisitions deals.
There are several reasons which drive interest from both investors and brands:
- Growing focus on integrating digital and physical worlds using mixed reality(MR), augmented reality (AR), and virtual reality (VR).
- Metaverse has the potential to elevate several industries in numerous ways, such as manufacturing (e.g., digital prototypes), hospitality & tourism (e.g., preview and elevate customer experiences) and healthcare (e.g., accelerate disease assessment and treatment).
- High penetration rate of users from gaming, content creation, social interaction, learning, and training.
- Transform e-commerce and customer experience.
As a result, various end-user players such as Meta, Gucci, Nike, Starbucks, and Adidas are entering the metaverse in different ways to experiment with different ways to elevate the internet experience with customers.
Starbucks is set to launch a Web3-enabled loyalty program and a non-fungible token (NFT) platform that allows customers to earn and buy digital assets that unveil exclusive experiences and rewards.
As the metaverse and NFTs continue to soar, more M&A opportunities will emerge to accelerate building immersive experiences and help to build large-scale communities underpinned by engaging content. Gaming is one of the biggest bets.