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10/11/2023

Conquering Web3: The next Evolution of the Internet

Web3 Blog article Blog article

Authors: Jérôme Biallet, Timo Sudmann

Conquering Web3: The next Evolution of the Internet

In today’s rapidly evolving digital landscape, companies find themselves at a pivotal juncture. The convergence of technology, innovation, and user behaviour has given rise to a new paradigm: Web 3.0, or Web3 for short. It promises to fundamentally change how businesses engage and communicate with their customers. But what added value does Web3 offer and why is it important to develop the right Web3 Strategy now? 

Why a Web3 strategy is vital now

Web3, the latest evolution of the internet, is more than just a technology trend; it’s a profound shift in the way we engage and interact with online technology. Let’s have a look at the developments to gain a better understanding of its significance: 

In Web1, websites were static, and information flowed in one direction – from the web to the user. Web2 launched the era of interactivity. Social media enabled users to generate their own content and share it with others on these platforms. It changed the way we communicate and network with each other online. Now, Web3 is setting the stage for a decentralized, transparent digital environment. What does this exactly mean? 

The digital strategies that were effective during the Web 2.0 are no longer sufficient to leverage the full potential of the possible interactions that are now possible. Web3 introduces novel concepts, technologies, and opportunities that can reshape how businesses operate and interact with their audiences. To remain relevant and take full advantage of this transformation, it’s essential to embrace these developments now.  

What does the Web3 ecosystem look like?

Imagine a digital landscape where trust, transparency, and efficiency are the pillars of every interaction. This is the promise of Web3, with Blockchain technology at its core. It is a technical solution for storing, processing, sharing, and managing data records in a distributed infrastructure in a transparent and tamper-proof manner by consensus. The Blockchain concept makes it possible to verify transactions in a trustworthy and transparent manner without a centralised authority. Blockchain not only optimises processes and reduces costs, but it can also fundamentally reshape the way we do business.   

Web3 and blockchain are therefore more than just a passing trend. They have the potential to develop completely new business models, offer access to untapped customer segments and are highly efficient and reliable. The shift towards a decentralised Internet is nothing less than a paradigm shift; and companies that understand this change early on and take advantage of it can reap considerable benefits. If companies do not explore the many possibilities of Blockchain technology, they run the risk of falling behind the competition. 

Non-fungible tokens (NFTs): The new definition of digital ownership

An NFT is a digital asset that is recorded in a public and decentralised directory, the Blockchain, and stored in a digital wallet. Ownership of an NFT is thus publicly verifiable and is also tamper-proof. Smart contracts are used to enable the functionality of NFTs. They are self-executing programmes that are stored on a Blockchain and define a series of rules and conditions. In the context of NFTs, smart contracts define the structure and functionality of Non-fungible tokens. Smart contracts can also contain additional functions or rules, such as commission fees for the original creators on resales or access rights to certain content. By using NFTs, companies can therefore tap into new revenue opportunities, appeal to customers with exclusive content and increase their brand value at the same time.  

Wallets are the new email addresses

Companies are currently missing out on important information about their customers. On the one hand, this is because companies are facing increasing legal restrictions on the collection, storage and use of consumer data. On the other hand, because large technology companies retain data sovereignty or because different systems do not communicate with each other. 

In Web3, companies can use wallet addresses to interact directly with their customers without having to use third parties as a communication platform. This new type of communication is significantly changing customer acquisition and retention by providing companies better insights into the activities and interests of their customers. 

An example: Lufthansa takes the flight experience to a whole new level. Together with Miles & More, the Lufthansa Innovation Hub has presented “Uptrip”, an innovative, NFT-based trading card app with engaging gamification functions. It enables users to collect NFT-based trading card sets with the help of flight tickets. In return, users gain access to exclusive airline benefits such as free Wi-Fi on board, access to lounges, redeemable miles and much more. 

By leveraging Web3 technologies that enable real-time engagement, cross-channel integration, enhanced privacy, and demonstrable ownership and engagement, a new type of loyalty programme is being created that is more personalised, secure and adaptable compared to existing programmes. 

The Metaverse: A new dimension of digital engagement

The Metaverse, encompassing interactive and immersive virtual worlds, is widely regarded by experts as a crucial component of the internet’s future. It presents a myriad of potential applications, including collaborative work, digital twin technologies, virtual sales and marketing channels. In combination with the previously described aspects of Blockchain technology, the overarching use and trading of NFTs between different virtual worlds, the potential of Web3 takes on another powerful dimension. 

The car brand Cupra, part of the Seat family, demonstrates how such a Metaverse could look like. The company leverages its immersive world not just to establish a novel platform for its community, but also to collaboratively design the “DarkRebel” model according to individual preferences within the community. This does not only actively involve fans, but also allows the company to identify trends for the physical vehicle design of the future. In this way, virtual and physical products merge in a novel way. Users are rewarded for their engagement and activity on the platform with dynamic NFTs – their exclusive Metahype passports. 

Unlocking Web3’s Potential

Web3 is more than just an evolution of the internet as we know it – it’s a real revolution. Everything from product design to marketing needs to be completely rethought to succeed in this new age of the web. The key is to take four important steps:  

  1. Assessing your company’s status quo with regards to Web3 to identify challenges and potentials specific to your business.  
  2. Crafting a boardroom strategy to successfully steer your company on the journey to maximize the positive impact Web3 can have for your business.  
  3. Creating islands of innovation within your company to experiment and discern which Web3 innovations can bring the greatest added value to your business.  
  4. Adjusting your core business model to ensure Web3 can be implemented into your company’s operations at scale and as seamlessly as possible.  

At IBM iX, we’re here to assist your company in developing a bespoke Web3 strategy. Our Web3 framework is based on well-established co-creation methodologies. We work together with our clients to unlock potential and get ideas off the ground – from roadmap to technical implementation. Contact us today – the time to get started with Web3 is now. 

 

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