As association leaders, it’s often your responsibility to keep up with trends and understand all the complex ideas that have an impact on your organization. While deconstructing these complex ideas comes with its own challenges, the biggest hurdle is often explaining that information to your members.
In our new series “How To Talk to Your Members,” we’ll be tackling some of these trends and giving you the tools you need to address your organization.
To that end, we’ll start with Web3, the newest and likely most misunderstood evolution of the internet as we know it.
The Web Evolution
Before there was Web3, there were the earliest iterations of the internet.
Web 1 (1990 - 2000) – When the internet went mainstream, most companies and publishers established a presence. However, the internet was static and created with a read-only design, allowing for publishing but no interactivity.
Web 2 (2000 - 2010) – The internet most of us know today. Web 2.0 allowed for interaction between sites and users and led to the development of online search engines, web apps and social media sites like Facebook and Twitter aimed at sharing user-generated content.
As Marc Angelos puts it in his post for The Tilt, “for the first time, being a “creator” became a viable business as some folks built sizeable incomes through podcasting, blogging, and eventually video channels.”
What Is Web3?
As mentioned above, the web as we know it today is a closed system where data is stored in centralized servers owned by a handful of technology giants like Google, Facebook and Amazon. The “control” aspect of using these giants according to a Forbes article, stems from the fact that “someone pays to install servers and set up software on them that people want to access online, and then either charges us to use it or lets us use it for free, as long as we abide by their rules.”
These complex rules are what have led to worrying issues around privacy and security, and the possibility of our data being weaponized. And we have seen this happen in recent years with the spread of disinformation, as an example.
So, the aim of Web3 is to solve these issues by becoming an updated version of our internet that removes any controlling entity – i.e. a government or corporation – and distributes that power using blockchain.
Blockchain Technology and Web3
Before diving deeper into the world of Web3, we first need to understand what makes it work – blockchain technology.
Simply put, the blockchain is a virtual, publicly-transparent ledger that stores all the data of a transaction – i.e. ownership of a piece of art or the cargo manifest for a shipping container – and is then copied across a network of computers also known as data blocks.
The blockchain database isn't stored in any single location – it is hosted and maintained by everyone who has access to it, which means there is no centralized version of the information that can be hacked or corrupted.
What you’re left with is a technology that is difficult to hack but incredibly transparent, forming the backbone of Web3.
Related: Here’s how blockchain could change association certifications foreverLearn More >
Web3 Pillars You Should Know
In a recent Medium article, Mike Troiano outlined a unique analogy to understand Web3.
“If the Internet is Iron Man, blockchain is Captain America, NFTs are Thor, and decentralized applications are The Hulk… Web3 is The Avengers. It includes all the heroes from other stories, but brings them together to create something different, fundamentally new, and (hopefully) better.”
These “mighty” technologies each play a role in the building and functionality of Web3 essentially forming the pillars it’s built on. They include:
Blockchain aka The Trust – As mentioned above, blockchain technology is what allows Web3 to be decentralized. Using its peer-to-peer network, data is stored and protected from hacks, allowing for trusted transactions in a trustless environment.
Crypto aka The Currency – Whether it’s Bitcoin, Ethereum or Dogecoin, cryptocurrencies will be the “money” you use to buy things in Web3. Anyone can create a cryptocurrency, which is why they’re often seen as volatile. Currently, Ethereum is one of the most-used cryptocurrencies as its the coin used for purchasing NFTs.
Creator Coins & NFTs aka The Assets – While art has become the most prevalent use case, NFTs can be more than just digital content. Events could mint NFT tokens as a virtual ticket to a concert, tokens of deeds could confirm ownership of a property and even your medical records could eventually be tokenized to streamline care across doctors and facilities. This unique technology that represents a physical or digital asset will be bought, sold and traded within Web3 and secured using blockchain technology.
DAO aka The Modern Business Model – According to an Ethereum post, a DAO is an “internet-native business that's collectively owned and managed by its members. They have built-in treasuries that no one has the authority to access without the approval of the group. Decisions are governed by proposals and voting to ensure everyone in the organization has a voice.” Sound familiar? A DAOs can easily become the Web3 version of an association.
Obviously, there is a lot more to these pillars than just that, and we’ll be exploring them more in detail in future posts.
Where Does the Metaverse Fit In?
Just like bitcoin has become the catch-all for cryptocurrencies, the metaverse is quickly becoming misunderstood as Web3.
Where Web3 is all the technology that builds the new internet, the metaverse will likely be the customer-facing sandbox we play in. According to Mathew Ball, a venture capitalist, the metaverse is “about being within the computer rather than accessing the computer. It’s about being always online rather than always having access to an online world.”
Whether this translates into a VR/AR world where we wear headsets and gear to enter is yet to be seen. However, the metaverse is not so far-fetched. Video games and MMORPGs have been doing this for years with titles like Sims and World of Warcraft.
However, when connected with Web3, there are more possibilities. Imagine, using your cryptocurrency to purchase NFTs that you can wear or use to decorate your virtual home, whose ownership is confirmed by the blockchain.
It’s also important to note that large organizations are already buying into the metaverse. According to a Forbes article, Walmart is already developing its own token and plans to “sell goods virtually, ranging the gamut from electronics, home decorations, children’s toys and games, sporting goods, personal care products to physical fitness training services and health and nutrition classes in augmented and virtual reality.”
Today’s Real-World Applications
The biggest issue with explaining and understanding Web3 is that we have no real-world application to compare it to. While Web3 is still very much a work in progress, many of the technologies that could be used to create a decentralized internet are being used to solve modern-day issues.
Walmart’s Supply Chain – With over 200 data points and 70% of invoices requiring time-consuming reconciliation, Walmart Canada opted for the use of a private blockchain network. Leveraging blockchain technology, this new system “continuously gathers information at every step — from the tender offer from the carrier to the proof of delivery and the approval of payment.” It is then synchronized on the blockchain to eliminate discrepancies, bringing the need for manual reconciliation down to less than 1%.
Golf Enthusiasts Form Their Own Club – DAOs can be formed with just about any mission and allow investors to consolidate their buying power based on set rules without even needing to know each other. LinksDAO is doing just that by reimagining the classic country club. Their NFT buys you community access and the ability to buy membership once they acquire a physical club. More importantly, by joining the DAO, members will have governance rights over things like club rules, marketing and the selection process of the club.
Reliable Credentialing – According to IBM, “there are at least 738,000+ unique credentials being issued by a myriad of organizations.” However, without a centralized system to verify this information, organizations are left wasting time and resources. Through the use of blockchain technology, IBM’s Learning Credential Network connects job seekers, employers and educational providers to a blockchain-based system designed to manage and share credentials securely.
Creator Coins – You support your favorite creators with affiliate links, but they still have to pay the middle man. Enter creator coins. Creator coins are another form of cryptocurrency that is developed by a business or creator and can be used for a range of things including funding projects or purchasing merchandise. It has created a whole new “Creator Economy,” which will likely be a component in Web3.
So, What Do Your Members Need to Know?
What This Technology Is
Web3 and the related technologies can be complex. However, when taken at their most basic level, they can be understood as:
Blockchain is the backbone of all Web3 development and is what allows trusted transactions to occur online.
Web3 is really just a collection of tools and applications that all live in a decentralized world online.
Technologies like NFTs and creator coins are being used today and can be an asset to growing your association.
The metaverse will leverage virtual and augmented reality to create a “second life,” where users will be able to buy goods and create businesses, among many other possibilities.
What This Technology Isn't
Because many of these terms and technologies are new, they are often used interchangeably or in the wrong context. Some common misconceptions include:
Blockchain is not a hyper-speculative price appreciating token/coin – it’s a technology. In fact, it’s the most important part of this new world that allows for decentralization thanks to its transparent ledger.
The metaverse is not just a single place, application or website. While large organizations are already investing in the metaverse – i.e. Facebook’s rebranding to Meta or Gucci’s partnership with Roblox – they’re really only investing in ways to monetize this new world that will be created by a collection of technology companies.
NFTs are not just used for digital art. It can be a virtual ticket for your next concert, the deed to your house or the history of your education and professional certifications all recorded on the blockchain.
The Bottom Line
When it comes to Web3, there are a lot of moving parts and technologies that all go into reimagining the internet as we know it today. Many of these changes won't happen for some time, however, many of the foundational technologies are being used today and can be leveraged for your association.
It’s complicated but you’re not alone. As our series continues, we’ll tackle many of the pillars we covered here in-depth, ensuring you have the tools needed to educate your organization.
Jose Triana is a writer and creative focused on helping purpose-driven organizations learn and find value online. When he isn't working on content, you can catch him going for a run or resting with a good book.
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