What is Web 3.0? How does it impact the rules of ownership? What risks and opportunities lie ahead for businesses in this new virtual reality? The answers aren’t always clear or simple, but by developing a foundational understanding of the Web 3.0 landscape, organizations can prepare for and manage the implications and future-proofness of their digital strategies.
Web 3.0 describes a concept that, according to its proponents, should follow Web 1.0 and Web 2.0 as the third stage of development of the Internet. The first version of the internet, Web 1.0, focused on providing information on static web pages. Interactions between consumers and the providers of the information were not the focus. However, this changed with Web 2.0 (also called the social web). This phase became the basis for the establishment of large internet corporations and platforms.
Web 3.0 is an impending movement away from previous (centralized) control structures owned by technology giants and the handling of digital property. Until now, corporations have largely determined what content may be shown. Web 3.0 is intended to democratize the internet again and allow digital content creators to maintain digital ownership.
The redistribution of rights is achieved through a decentralization of the internet. The idea is to have protocols and services such as DNS, cloud storage and content delivery networks run in a completely decentralized manner.
How exactly does this work?
In Web 3.0, peer-to-peer computers based on blockchain technology are to replace the previously centralized platforms. A blockchain is a public data structure distributed across several computers. Transactions are recorded in it in a traceable and unchangeable manner, and Web 3.0 is thus enabled, allowing various groups to implement and own digital space and content for altruistic and/or economic purposes.
Differences between Web 3.0, Semantic Web and the Metaverse
Another attempt to create a better internet is the Semantic Web envisioned years ago by Tim Berners-Lee. The terms Web 3.0 and Semantic Web are sometimes used as synonyms, but they describe two different concepts.
While Web 3.0 builds upon blockchain technology and aims to redistribute power structures and digital property and (technologically) decentralize the internet, the Semantic Web aims to make Web 2.0 more user-friendly by incorporating machine learning and artificial intelligence. Intelligent applications process large amounts of data to make the information available on the internet more accessible to users and easier to manage, all based on semantics.
Web 3.0 is also often referred to as the metaverse. In Web 3.0, the question of ownership, digital ownership and control is at the forefront. In the metaverse, the focus is on user. Basically, the metaverse is any digital space in which users could access the internet via virtual reality or augmented reality technologies, and Web 3.0 concepts (decentralization and ownership) can be integrated into the metaverse. Examples of metaverses with Web 3.0 concepts include The Sandbox or Decentraland, while metaverses with Web 2.0 concepts include Fortnite and Horizon Worlds.
Implementation of Web 3.0
In Web 3.0, objects that are to be digitally marked as property (digital ownership) are called tokens. A token can be, for example, an image, a social media post or a comment under a blog. If rights to a token are to be transferred, a transaction takes place.
However, not only tokens can be stored in the blockchain, but also contracts, or smart contracts in the Web 3.0 context. Blockchain services that support smart contracts can therefore support transactions between parties. This is necessary if property is to be transferred from one person to another.
In the Web 3.0 landscape, significant attention has been given to Non-Fungible Tokens (NFTs), which assign rights to a digital object (especially digital art) to a specific person/owner via the blockchain. In Web 3.0, corporations theoretically no longer profit from the art created by others. Instead, each digital artifact belongs to an individual owner who may determine usage rights for their digital property.
However, this concept has nuances that are yet to be worked out. For example, the legal framework around the ownership of a token is still developing—in other words, there is no universally agreed and legally enforced means of recognizing ownership. In a case ruling in the U.K. earlier this year, an NFT was recognized as property, which supports the idea that NTFs are not simply providing ownership of an image, but rather are more broadly recognized as assets. We’re likely to see more luxury goods using this technology to store the certificate of ownership and authenticity, which has the potential to serve as a legal equivalent to traditional physical certificates.
Conclusion: Ownership vs. digital ownership in Web 3.0
An important principle of Web 3.0 is the assignment of ownership to individuals. Therefore, the question of digital ownership becomes a particularly relevant issue.
Web 3.0 aims to become more accessible and more equal for everyone. Users are given data sovereignty and control over their own content, and censorship can be circumvented. While this redistribution of power seems desirable, data protection must not be forgotten when recognizing digital ownership in the real world.
How this will ultimately look in practice remains to be seen, especially since there are tendencies to regulate such approaches. Organizations will need to continue to closely watch developments in this arena and develop strategies and processes that are adaptable to changes in the landscape and the laws that will ultimately govern it.
renato.fazzone@fticonsulting.com
