7 min read
Web3 & NFTs: Understanding the Future of Digital Ownership and Decentralized Internet
In this article, we aim to simplify and explain Web3 and NFTs, crucial elements that are shaping the future of the Internet. We will talk more about these topics to help you understand what the tech world might look like in the next 10 years, with a particular focus on the roles of Web3 and NFTs.
By: Khristian Flohr
We are currently living in a time when we often hear words like blockchain, NFTs, and AI. These terms are very important in the way the internet is changing as we become more and more digital. After the global pandemic of 2021, the growth of the digital world sped up, causing more things to become digitized. We've become more dependent on digital solutions; working from home and talking with work friends online has become normal. Yet, we're about to see the biggest leaps in technology, and the evolution of the internet will have a big impact on how we live day-to-day in the upcoming years. In this article, we're going to look more closely at the idea of the "new internet," also known as Web 3.0.
The growth of Web 3.0 is accelerating, and NFTs are set to play a significant role in shaping a new chapter of the Internet. With the rapid adoption of AI, the pace of progress will only increase. Innovative online tools will emerge, and the internet will undergo a major transformation, evolving into a more communal space that's owned and controlled by its users. Ownership and power will be decentralized, shared among users rather than concentrated in the hands of a few large corporations. Today, we will dive deeper into how NFTs will have a crucial role in shaping the future of the internet.
Understanding Web3: The Internet's New Era
To understand Web3, we must go back to the early days of the dot-com era and observe how it has evolved over time.
Web 1.0 - This was the "read-only" internet. In the early days of the internet, from the mid-90s to the early 2000s, websites were mostly static and one-way. Think of it like a library. You could visit and read the information, but you couldn't interact with it or contribute your own content. It was just for consuming content, like reading a book or a newspaper.
Web 2.0 - This is the "read-write" internet, which started to gain traction in the mid-2000s. This version of the internet allowed users to interact and contribute their own content. Think of sites like Facebook, Twitter, or YouTube. You're not just reading or watching content, but you're also creating posts, uploading videos, and leaving comments. Web 2.0 is all about participation, social networking, and user-generated content.
Web 3.0 - This is the next evolution of the internet, often referred to as the "read-write-execute" internet. It's still in development but is characterized by a more intelligent, personalized, and decentralized internet experience. Web3 is being developed by AI, machine learning, blockchain technology, Decentralized applications (dApps), cryptocurrencies, and NFTs. With blockchain technology, users can own their data and have more control over their digital identity. This era brings concepts like the decentralized web, where power and control are distributed amongst users. Web3 empowers direct interactions between individuals in a more secure and transparent manner.
NFTs and Ownership
NFTs are one-of-a-kind pieces of digital content (like a digital image, a stock of a company, or even a certificate of ownership of a house) that people can own. Thanks to blockchain technology, which acts as a transparent public record, anyone can verify who owns a specific NFT. This is where NFTs become crucial in the development of Web3. It ensures that each NFT remains unique and that ownership is traceable, which helps establish its value.
Remember how we said that the new internet will be an internet 'owned' and 'ruled' by its users? The word ownership plays a very important role in understanding NFTs. Why? because NFTs give users the ability to truly own and control their digital assets. Unlike before, where digital items could be easily copied, with NFTs, the user has a unique and permanent id that serves as proof of ownership that can't be replicated or modified. To better understand Web3 and NFTs, imagine a painting. In the physical world, a painting is unique. The artist can sign it, sell it, and the buyer can be confident that it's original because there's only one in existence. NFTs bring this same concept to digital items. With Web3 and NFTs, you can publicly own a digital painting just like you would a physical one.
Web3, NFT, And The Future Of Art
Web3 and NFTs are already causing a stir in the art world and digital collectibles. Artists can now create digital artwork, transform it into an NFT, and sell it directly to buyers online. This process allows artists to retain a larger portion of the sale proceeds, and buyers can prove they own an original piece of artwork. This win-win situation is made possible by the advent of Web3 and NFTs.
More uses of NFTs
As we said before, one of the strongest qualities of NFTs is their ability to prove ownership. While Art has been one of the most common uses of NFTs, eventually they could be applied to any asset, physical or digital, that is unique and has value. I previously wrote an article about the 10 future use cases of NFTs that will change society in the next 10 years, which I highly recommend reading! NFTs will be used to represent ownership over real estate, music, tickets, in-game assets, educational titles, identity documents, and much more. NFTs are the core in which Web3 will be built and owned by it's users.
How Long Will It Take for Web3 and NFTs to Reach Mass Adoption?
There are several factors that will influence the growth of Web3. According to a report from September 2022, only 3% of the global population claims to own an NFT. However, the worldwide market cap for NFTs is predicted to be worth about $211.72 billion by the year 2030. It's expected to grow at a rate of 34.2% each year from now until 2030. If these numbers become a reality, several factors will play a role in the growth of NFTs and Web3 industry.
Regulations: Cryptocurrencies, NFTs, and blockchains exist in a regulatory gray area. Laws and regulations need to be clearly defined before large institutions adopt and offer NFTs. Blockchain technology is relatively new to many lawmakers, and very few fully understand the truly how it works. There's an ongoing debate about whether NFTs are categorized as securities, commodities, or art investments, Additionally, how will they be taxed? These issues need to be resolved before we reach mass adoption and large institutions like Amazon, Apple, Meta, and other big players adopt them into their ecosystems, making them widely known to their users.
AI: We are currently in the initial phase of the AI era. With the development of AI tools, processes will accelerate at record-breaking speeds. The exponential increase in productivity and efficiency in society, driven by revolutionary AI tools like ChatGPT, Google's Bard, and other machine learning tools, will stimulate unprecedented growth and efficiency. AI will play a significant role in defining Web3. Eventually, AI and Blockchain (and therefore NFTs) could serve as the winning formula for a decentralized "new internet" in the years to come.
Large Organizations: Large corporations command extensive user bases. Big corporations represent vast audiences. Consider this: Apple launched the first smartphone in 2007. Now, there are approximately 6.84 billion smartphones worldwide. This figure accounts for around 85% of the 8 billion global population, putting into perspective the reach of such companies. For mass adoption rates to occur, new technologies like blockchain, AI, and NFTs need to be promoted by entities that cater to large user bases. Web3 will fulfill its potential only after large corporations integrate them into their operations, making them accessible to the masses.
Complexity: Understanding NFTs and Web3 is a relatively complex topic that only a small minority of the population understands. Owning your first NFT or developing a Web3 application requires technical knowledge. If we go back to the early days of the Internet, only the most tech-savvy individuals knew how to build a website. It was a sophisticated task that required a deep understanding of computers. Now, anyone can create a website or a blog in a few hours. Simplicity plays a crucial role in defining the adoption rate of a new technology. We still have a few years to go until NFTs, blockchain, and Web3 become the norm. Could the rise of AI tools help simplify this?
Necessity Over Luxury: Presently, NFTs and cryptocurrencies are often perceived as luxury commodities, primarily because there is no immediate, widespread societal need to own or use them. For instance, Bitcoin, despite its growing recognition, has not yet established itself as a mainstream transactional currency. For Web3 and blockchain technology to become really popular, they need to be seen as useful parts of everyday life, not just fancy investments. The more these technologies are used in practical ways that help society, the more people will start to accept and use them regularly.
In a nutshell:
We are in the early days of Web3, NFT and Blockchain technology. Understanding these concepts may prove handy in preparing for and understanding the future of the internet. Having a vision of where things are going could give you a competitive advantage and help you prepare for what's coming in the upcoming years. Subscribe to our newsletter to ensure these updates are delivered straight to your inbox. Don't forget to join our Discord server, where we often discuss the latest trends in tech, crypto, and NFTs!
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