The promise and perils of Web3
21 Mar 2023
As marketers and comms professionals, it’s our job to understand the nuanced differences between new technologies and platforms, especially when the hype cycle gets going. So where do we stand when it comes to Web3?
When Meta released its vision of the metaverse, that wasn’t Web3.
If Amazon decided to accept payments in Bitcoin next week, that wouldn’t be Web3 either.
A bank using a blockchain to record property ownership? Not Web3.
So, what is Web3?
The concept of Web3 is built on the idea that blockchain technology can underpin a fundamentally new approach to building digital applications. With Web3, digital tokens would mediate all kinds of online interactions, rewarding users and determining ownership in a supposedly “trust-less” environment.
To understand the core innovation of Web3, it’s essential to understand the central criticism of Web2: too much power is concentrated in the hands of a few tech companies such as Facebook, Amazon or Google. Around the world, governments have begun legislating to limit the power of these tech companies. This includes breaking up .
A decentralised internet
In contrast to the Web2 applications we have today, Web3 would have no centralised digital gatekeepers to establish the rules or profit off applications. Instead, apps would be developed to automatically reward individuals for their activity and developers for their efforts.
There’s much debate over the potential of any crypto-based system to be a truly democratic alternative to Web2. If control of a Web3 system ultimately comes down to the ownership and use of cryptocurrency assets, could this simply shift control from tech corporations to high-net worth individuals? Should all our engagement with digital services be explicitly motivated and rewarded financially?
The biggest challenge of Web3
Fortunately, the biggest challenge for Web3 is a much simpler question. Something which made Web2 so wildly successful in the first place: UX. Amid the excitement over financial incentives and tokenisation, it’s critical to remember that most users simply want digital services that are simple, efficient, secure and integrated.
The last few decades have been a Web2 masterclass in removing friction. Amazon 1-Click, facial recognition, omnichannel retail, contactless payment, open banking, the TikTok feed, streaming media and more – all point to the power and success of a slick, integrated and centralised user experience.
Here lies Web3’s biggest challenge. Are users willing to adopt new digital services – a process that causes substantial friction – and move away from the seamless, centralised Web2 UX they’re familiar with?
User Experience vs User Incentives
While it’s certainly possible to develop a quality UX on Web3 applications, it’s not necessary (in theory) for the app to succeed. If users are being financially rewarded for their activity and contributions, the vital role of UX in retaining user attention is no longer a priority.
Ultimately, do users want what Web3 is promising? Will micro-financial incentives be enough to convince them?
Maybe! But any good marketer knows that friction is lethal for customer acquisition, satisfaction, and retention.
If Web3 is to be the future of digital services, then user experience – and not just financial incentives – needs to sit at its heart.
Want to learn more about Web3, how it might impact your existing martech stack, and how you can futureproof your brand for a decentralised internet? Get in touch with our team here!