Web3 has been gaining traction in major industries with the rise of Web3 business models based on non-fungible tokens (NFT), blockchain technology, and cryptocurrencies. But it is still an open question whether it is really improving the industry and mainstream products.
According to a Coinbase study from June, more than half of the top 100 US Fortune 500 companies have carried out Web3 initiatives since the beginning of 2020.
About 60% are in the pre-launch stage or have already launched as of early 2020. Of surveyed Fortune 500 executives who are familiar with blockchain, 83% say their companies have current initiatives or are planning them.
Speaking to Cointelegraph, Pat White, co-founder and CEO of digital asset platform Bitwave, believes there has been progress in Web3 successfully joining the mainstream.
“It has the potential to drive innovation in many industries, and we are just starting to see some of the first use cases outside of the crypto economy,” he said.
He cites eliminating intermediaries, reducing costs, improving data integrity, supply chain transparency, improving cybersecurity and creating new ways of interacting with customers as particularly useful in sectors such as finances and healthcare, among others.
Related: How smart contracts can improve efficiency in healthcare
Healthcare already has some promising use cases for Web3 in these areas, including services now appearing in the metaverse, specifically for those seeking mental health care.
Some companies are also experimenting with storing and managing medical records using blockchain. A company even released a COVID-19 medical certificate on blockchain.
However, everything is still in the early stages of research and it remains to be seen if Web3 in healthcare will be more effective than systems that already exist.
Just because you can doesn’t mean you should
More than a few high-profile companies have started using Web3. For example, Starbucks has launched an NFT-based rewards program.
Goldman Sachs and Microsoft have also been developing new blockchain networks aimed at financial institutions. Elon Musk has also been teasing a crypto payment option on X (formerly Twitter) for some time.
White believes that while there are use cases for Web3 in major industries, that doesn’t mean everyone can immediately drive efficiency with Web3 tools.
In early 2023, high-performance sports car maker Porsche found this out the hard way with the failure of its NFT project, which it had to abruptly halt after backlash over high mintage prices and lack of utility. .
Our starters have spoken. We are going to cut off our supply and stop mint to move forward with creating the best experience for an exclusive community. More information in the next few hours.
– PORSCHΞ (@eth_porsche) January 24, 2023
“Organizations can quickly get into trouble when they try to leverage only their existing legacy tools and processes to manage digital assets. “New technologies require new ways of operating,” White said.
“With the recent recession, we have seen companies that are not sustainable exiting the Web3 space.”
White says the use of Web3 technology should not be taken lightly and that any foray into this space should be “a strategic decision” orchestrated across all operational departments.
At the moment, he sees Web3 at a stage of development similar to that of the Internet in the late 90s. Speculation is rife and many companies are looking to incorporate the new technology without a plan.
“The nature of innovation cycles is that during periods of the hype cycle, many people will try the technology for many purposes, and some may not be helped by the innovation,” White said.
Brendan McKittrick, founder and president of decentralized aviation platform Aerobloc, told Cointelegraph that he believes Web3 promises to improve everyday products and services in areas such as supply chain transparency and data security.
The extent of this improvement depends on how effectively Web3 is implemented. McKittrick says there have been obstacles and challenges for major companies using Web3, like any new technology.
“Some mainstream companies may adopt Web3 to take advantage of the hype and attract investors, which could result in superficial integration that fails to generate significant benefits,” McKittrick said.
“These missteps can be valuable learning experiences that help industries refine their approach and maximize the benefits of Web3 in the long term.”
In some cases, the adoption of the technology is beyond the company’s reach, as in the case of French gaming giant Ubisoft, which had to cool its plans to use NFTs and blockchain following backlash from gamers.
Related: Ubisoft launches Ubisoft Quartz platform for playable, energy-efficient NFTs
Overall, McKittrick believes Web3 is not just about technology; It’s a mindset that includes decentralization, trust, and rethinking ownership, all of which could benefit the mainstream industry.
However, he believes that in some cases, systems that already exist could be more effective and, while Web3 has “significant potential for a wide range of applications”, its suitability “depends on the specific needs and characteristics of each industry” .
“Its universality is tempered by the need for careful consideration of each industry’s unique requirements and limitations,” McKittrick said.
“Some sectors may not benefit as much from decentralization or blockchain technology, and traditional systems could still be more cost-effective and efficient for them,” he added.
Some mainstream industries are already using Web3 successfully
Kadan Stadelmann, chief technology officer of blockchain platform Komodo, told Cointelegraph that in his opinion Web3 technology is already improving products in mainstream industries such as music, gaming and real estate.
Related: Web3 is transforming the music industry – here’s how
In the music scene, he says Web3 technology helps artists eliminate middlemen, such as record labels and streaming services, allowing artists to connect directly with their audience.
“Web3-minded musicians retain control over their creative works, which helps ensure fair compensation for their efforts because decentralized music platforms provide transparent royalty systems,” Stadelmann said.
“Artists receive instant payments for their streams or downloads without delays or complex contracts with dodgy independent labels or overbearing major labels.”
Web3 technology has been very active in the music scene, from the democratization of song rights royalties and blockchain licensing to legacy companies like Sony Entertainment filing patents for NFT-authenticated music.
Artists have also begun to explore new ways to drive fan engagement through wallet-based loyalty incentives and token-based communities. In early 2023, Harry Styles fans opened a crypto wallet through a third-party app.
Empower true ownership for music fans.
Beginning with @Harry Styles https://t.co/q5AeHF8FCU
– Polygon (Labs) (@0xPolygonLabs) June 26, 2023
In the gaming space, Stadelmann says a central authority cannot control Web3-powered platforms; instead, they operate on decentralized networks like blockchain.
“This shift towards decentralization has numerous implications for players; improves ownership and control over gaming assets,” he said.
“Players can truly own their virtual possessions and even exchange them with others in a secure and transparent way,” added Stadelmann.
For the real estate industry, Stadelmann said Web3 can offer a framework that enables peer-to-peer transactions and smart contracts without intermediaries. Tokenization also allows properties to be divided into digital tokens that represent shares of ownership.
“This allows for fractional ownership and opens up real estate investing to a broader range of people who may not have had access to it before,” Stadelmann said.
“Transparency and immutability in real estate transactions reduce fraud and increase trust between the parties involved. Web3 also allows people to monetize their properties through decentralized financial platforms,” he added.
Stadelmann believes the fashion industry has also benefited from an injection of Web3 technology, with the ability to direct peer-to-peer interactions between designers and consumers.
It says designers can protect their intellectual property rights and receive compensation for their creations through smart contracts, authenticating products and combating counterfeiting.
“Unique digital identities can be assigned to each garment, allowing consumers to verify its authenticity with a simple scan,” Stadelmann said.
“This not only protects brands from loss of revenue, but also ensures consumer confidence in their purchases,” he added.
Web3 has potential but still needs more development for the mainstream
Speaking to Cointelegraph, Bradley Allgood, CEO and co-founder of financial technology company Fluent Finance, said he believes Web3 technology has potential for use in the mainstream financial world.
However, he says the on-chain and legacy worlds must reach a consensus on a trusted gold standard medium of exchange that can flow frictionlessly between traditional and on-chain financial ecosystems.
“Until then, it will be more of the same gimmicky adoption efforts and marketing hype,” he said.
“It’s like any other value-based technology: it needs a robust medium of exchange and financial infrastructure to support business applications,” Allgood added.
Related: Web3 games still a long way from widespread adoption: survey
At the moment, Allgood says in his experience, Web3 integration processes can be clunky and inefficient and create inferior user experiences because the middleware and interoperability infrastructure are not yet available.
There have already been attempts to unite Web3 and blockchain in finance. Major payment processor PayPal announced its PYUSD stablecoin, and payments giant Mastercard is exploring crypto benefits through a new collaboration with crypto payments platform MoonPay.
Allgood believes that until there is strong custody and issuance of a stable value asset with adequate real-time transparency, Web3 in the mainstream will continue to be restricted.