What is Web3 and What Does it Mean for eCommerce Websites?

There is no denying the constant changes, developments and evolution that happens on the web. There is always something new and exciting to be aware of, and there is a constant stream of innovation. One term that everyone is talking about is Web3.

Web3 was coined back in 2014 by Polkadot founder and Ethereum co-founder Gavin Wood. It refers to a decentralised online ecosystem based on blockchain. Though centralisation has made it possible for billions of people worldwide to utilise the web, Web3 is bringing about a lot of change. This is due to the problems that come with centralisation, such as large organisations having control over large portions of the web. This gives them the power to decide what should and should not be allowed, whereas Web3 puts control back into the hands of users.

For many people, Web3 is the answer to changing from a monopolised web to one that is operated and owned by users. We’ve had Web1 and Web2; now all eyes are on what’s coming next. Instead of corporations having the power online, Web3 is a solution that gives individuals more control. In 2014, Wood – along with many people who adopted cryptocurrency early – felt as though the web required too much trust; users were just expected to trust and rely on a handful of large companies who had control, even when handing over personal information. However, Web3 uses blockchains, cryptocurrencies and NFTs (non-fungible tokens) to give users of the web more power. It does this by giving them a greater sense of ownership and reducing the need for identifiable information online.

There’s a lot that goes into Web3, which can make understanding it tricky at first. To begin with, it’s important to get to grips with the main principles.

• Decentralised – Instead of the web being owned and controlled by large organisations, Web3 gives ownership back to users.

• No Trust – Rather than trusting third parties, Web3 uses incentives and economics to gain the trust of users.

• Native Payments – Web3 uses cryptocurrency for spending, as well as for sending money elsewhere. There is no need to rely on banks and traditional online payments.

• No Permission – With Web3, everyone has equal access to participating, and users are not excluded.

There are a lot of benefits that come with Web3, which is why it’s something that a lot of people are excited about. Below, we have listed some of the main advantages Web3 has over Web2.

• Owning Your Own Assets – Web3 allows users to directly own what is theirs online, which hasn’t been possible before. It does this using NFTs, and anything you purchase online is yours to keep. For example, using Web2, any in-game purchases made are linked to your account. If you delete your account, you lose the in-game purchases, and the game creators take away your ownership. However, with Web3, you can sell or trade your in-game purchases on an open market. This allows you to recover some of the cost and stops you from losing out.

• Identity – When you start using a new platform online, you need to create an account. You will have different accounts for Facebook, YouTube, Reddit and so on. This means that at any time, and with no notice, these platforms can remove your account and put a stop to your online presence. Plus, joining these platforms requires you to hand over identifiable information to large corporations. With Web3, this isn’t the case. Web3 allows you to control your digital identity online using an Ethereum address, which creates a secure and anonymous single login for all platforms. This information is yours and does not belong to individual platforms.

• Reputation – If you build up a large following on a platform, and then you decide to leave, you lose that following. If you decide that a social media platform or online community is no longer for you and you want to leave, you have to say goodbye to the reputation you have built up. At the moment, content creators need to trust that the platform they use will always remain the same. Should a change occur, they have to accept it or lose everything they have worked for. However, with Web3, you can take that reputation with you. Web3 keeps all of your data on the blockchain, which you can simply add to another interface when you swap from one to another. 

With so many changes to the way the web works, it’s easy to see how Web3 could impact ecommerce websites. Luckily, it’s likely that this impact will be a positive one.

• Web3 will bring with it a faster and more secure transaction process, which means that more people will feel comfortable shopping online. This increases the chances of leads and sales whilst widening the online market.

• As Web3 will use blockchain, data from online transactions will be extremely secure, more so than it is now. This will encourage consumers to choose an ecommerce business, as there’s a reduced chance of personal information being stolen.

• Currently, a lot of people are excluded from shopping online, such as those without bank accounts. However, Web3 uses NFTs and blockchain technology, meaning no one is excluded from using an ecommerce website.

• Personal information is not needed for a Web3 payment, as the entire system is decentralised. This allows users to remain safe from hackers and cyber threats, which is one of the main reasons some people are hesitant to use ecommerce websites.

Though Web3 might appear confusing at first, there is no doubt that it could be a positive change for ecommerce businesses, large and small. Get in touch with the Quickfire Digital team to find out more about Web3 or for help in the evolving world of ecommerce. Contact us today to speak to one of our experts.