Founder and CEO of apptopiathe app data insights and intelligence company, with clients such as Google, Zoom, Visa and NBC.
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There’s a lot of hype around Web3 right now, but I’m seeing some interesting shifts in app development and generational consumer behavior as a result of this new set of protocols.
As of January 2019, according to our internal reporting, 2,883 apps marketing themselves as Web3 have been added to both Google Play and Apple’s App Store, and that number is growing every month† Until now, in 2022, the growth rate of Web3 apps has been added to the app stores five times as many as last year†
It is obvious something happens and demands our attention.
What is Web3?
Web 2.0 was the dominant land of the centralized data repository giants once known as FAANGs (Facebook, Amazon, Apple, Netflix, and Google). Simply put, Web3 is a response to these Web 2.0 companies and the driving force is decentralization.
Moreover, dr. Gavin Wood is widely recognized for using the term “Web 3.0” (before it was written as Web3 in 2014). As a co-designer of the Ethereum protocol, Wood is responsible for creating one of the earliest decentralized, open-source, and distributed computing blockchain platforms, enabling Web3. These platforms have spawned cryptocurrencies and smart contracts, which use transparency and trust while bypassing major financial firms and clearing houses on Wall Street.
I am not against centralized control per se; I like being able to search for just about anything on the web while knowing that I’m somewhat protected from the dark side. (Google does not crawl the dark web, as it is not a commercial proposition for ad-based trading). I am fine with using major financial institutions to process my online transactions. I don’t worry about being “me” on the internet. But again, I’m a cisgender, white, straight male and the co-founder and CEO of a mobile data company, so I recognize that my experience is different from those who aren’t. That said, let’s take a look at why many, especially members of more recent generations, prefer the decentralized world of Web3.
Thinkers of the next generation
Web3 may represent a generational shift, as its emergence was fueled by a response from Gen-Z and millennials against centralized control of data and identity by FAANGs. For example, if you’re a creator and decide to move your brand from, say, Instagram to another social network, you’ll soon find that you don’t own your content, number of followers, or really anything that supports you as a business.
The main appeal of Web3 is that users should have control over their own data and identity. Web3 apps never use a single sign-on mechanism (i.e. login with Facebook or Google IDs) because a user exists as a discrete entity in the community – one that is not tied to their offline identity.
There are also a lot of other interesting innovations within the Web3 protocol. Many of these are membership/ownership oriented, with monetary rewards to recognize community participation. This is often play-to-earn, involving crypto payments or a brand-related rewards system that is not cold, hard money, but functions like a currency. An emerging trend is collecting NFTs (non-fungible tokens, which are unique and transferable only by the owner) for “proof of attendance” at live events. Imagine this kind of loyalty-boosting gamification of an event, creating a mashup of being present (in reality) and having the virtual lanyard-esque element to prove it forever.
Referring to my earlier comment on the fivefold growth of Web3 apps, if an app doesn’t have any of these elements of data, identity, privacy, and play to earn, it probably isn’t a Web3 app.
Web3 Examples
A few of Web3’s rising stars that have recently come on the radar are Sweatcoin (fitness) and Twig (finance). Both can help us understand how the Web3 elements function on a practical level.
Sweatcoin, for example, replenishes a user’s “sweat wallet” in exchange for mining their raw gyroscope events (loged steps, GPS location, etc.). These “sweat coins” can then be redeemed on the app’s marketplace.
Launched in October 2020 as ‘Your Bank of Things’, Twig’s mission is to become a next-generation financial services and banking app based on the principles of the circular economy. Web3 apps often position themselves as part of the circular economy: they promote a healthier planet, conserve resources and sell old products by buying instead of fast fashion.
Exploiting the Web3 opportunity
So, how can companies today find opportunities to reach younger consumers turned off by centralized single sign-on control and alignment with the decentralized world of NFTs, identity change, mutual ownership and privacy-protecting Web3 apps?
One word: experiment.
At my company, we put a lot of emphasis on testing, trying and pursuing cool ideas by our engineering and product teams. I’m sure the excitement of “the new and the interesting” drives your most exciting staffers too. Why not redirect your resources to some clever skunkworks for about 90 days, and tell them to make something using the Web3 elements I’ve discussed here, and see what they come up with?
They can surprise you.
Web3 is catching on with Gen-Z and younger millennials. They will expect more and more Web3 elements that have them in mind, offered in goods and services. If your team finds a way to bring this language into your future product line, you’ll be at the forefront.
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