Forbes India 15th Anniversary Special

Web3: Moving from a buzzword to reality

Web3, an evolutionary idea for a new idea of the World Wide Web underpinned by the blockchain technology is already here

Published: Aug 24, 2022 10:13:36 AM IST
Updated: Oct 11, 2022 01:48:30 PM IST

Web3: Moving from a buzzword to realityIn little over a decade, Web3 has provided a novel way to companies to spawn innovative solutions. But customers will flock to the new-fangled offering if startups keep “customer experience” at the front and centre, says Rohit Jain, Senior Vice President and Head of Ventures & Investments, CoinDCX Ventures. Mr Jain joined us to talk about how content creators, businesses, customers and techies can unlock the potential of Web3.

With all the hype building around web3 as a panacea for the digital world, what opportunities do you think the stakeholders have in the web3 space?
I don't think it's a panacea for everything and I don't see this entire world and every aspect of our digital lives moving on to blockchains in a decentralized manner. Use cases that can give a 10X better customer experience with a decentralised architecture will be crucial.

Also, it's not a “zero” and “one” switch. So there will be components of centralised entity that will run on blockchains. Blockchains are fundamentally a new tech model that enable trust in a decentralized manner and whatever tech stacks can leverage that and can fundamentally be more efficient by being run in that manner, will move over to being run on blockchain.

Can you cite a couple of applications that you feel are clearly a use case for decentralized or Web3 kind of an architecture?
Three sectors that have gained a lot of popularity over the last twelve months are probably decentralised finance, gaming and NFTs. We've just started touching the tip of the iceberg, especially with NFT. It's a simple concept of ownership and sharing incentives while giving gated access to people who own NFTs. I think you will also see music get on to NFTs. And content creators will benefit hugely from web3. It's just opening new models of engagement, new models of monetization.

Do you see decentralized platforms at some point will help connect content creators with their audience on the lines of what Facebook and YouTube have done?
Yes, absolutely. I think Facebook, Instagram, Spotify and Twitter have done a phenomenal job. They created a new industry, scaled it to the levels within just a decade or so. I'm a huge fan of Facebook and everything that they do, but at the end of the day, it's a closed loop. If it were built on an open kind of a construct in a decentralized manner, I think you'd see a lot more innovation.

Their entire focus is on views and the engagement model because these are revenue drivers for various social networks. The minute you open it up and you start building these platforms in a decentralized manner, not only can you get more innovation, but you're opening up new channels of monetization which will bring in new avenues of engagement between fans, influencers and their community. So I think new models are going to emerge again.

Will these changes also seep into our work culture? How does remote working and the new way of working fit in with Web3 now that it has pretty much arrived on the scene?
One of the pillars of Web3 is operating in a trustless manner. In a centralized company where everyone comes into office every day, we take trust for granted. The corporate structure governs it. Now the minute you talk people working remotely, I think the whole trustless architecture of blockchains could be leveraged to drive efficiencies. I don't think Web3 technologies will push people to work remotely, but it could be an enabler which would make working from home or working remotely more efficient.

Also, do you think blockchain platforms can do without cryptos? Are they mutually exclusive or they are tied at the hip?
They are completely tied at the hip. Blockchain essentially enables trust in a decentralized manner. The revenues and profits that used to go to a centralized entity now go to all the stakeholders who participate in that protocol, whether they are developers, customers or contributors. Now how do you distribute this profit? “Tokens” is the way you do it.
Tokens, I would say, essentially is the oil which keeps the engine running. Our view is that we've not even seen 1% of the number of tokens that will be out there. I don't like to say cryptocurrencies, but tokens. As applications go mainstream, the number of tokens will only explode from here.

Do you see the internet moving towards a community-driven world at some point in time?
I think there will be some businesses which will continue to run in a centralized manner. A few others will go the other way. Now, what that percentage and what that split will look like, I think it's anyone's guess. Having said that, I think some protocols have already shown initial success of being able to be run by community. I think they are facing a lot of challenges. Businesses and corporate entities, as a construct, have existed for centuries now. There's a lot more work to be done to be able to build sustainable businesses. But do I think it will happen. We are moving in that direction because you're empowering people a lot more.

Indeed these are early days but how would you respond to sceptics who say that it's too difficult to adopt or scale Web3 technologies?
I think the industry is making extremely strong strides there. There are many outfits where the entirety of their focus is solving for scalability. We've had some initial success with proven use cases where blockchains fundamentally add value.

That's how Web2 has evolved as well. Think about how interfaces of Web2 looked like in 2001 and how slowly the pages would load versus seeing something through an app on your phone today. There's a world of difference. There's a natural evolution there.

Where do you see the awareness level about Web3 and what can be done to improve that?
Here, too, people follow an evolution curve. So the starting point is when they buy crypto on a centralized exchange. From there they evolve into the next level and participate within the DeFi ecosystem. A significant number of content creators have already benefited from the whole NFT boom. These include artists who weren't able to monetize and people who lived hand to mouth. They've been able to significantly change their livelihoods by adopting NFT. So there's an entire spectrum. You have people who are buying cryptocurrencies to people who are using the underlying tech to their benefit.

Now about question about how can one get the next batch of users to start adopting crypto and technologies, I think the answer there is user experience. User experience today, the way it is set up, it's very much for a crypto enthusiast or a Web3 specialist. It's not really attuned towards a typical Web2 user. That's something for example at CoinDCX, we think very deeply and we are working on multiple initiatives when it comes to user experience. Whereas a lot of tech heavy lifting happens in the backend, for the user, it should be a single click experience versus a ten step process.

That's nicely put. What opportunities can businesses find as we step into this era and how are customers benefiting from it?
Customers are hugely benefiting from it because in some sense they are owning their data. Again, in the Web2 world, they didn't really own their data. But in the Web3 world you own your identity. And if it's beneficial for customers, my fundamental belief is that the companies—who built their models without exploiting customers, but built their frameworks around giving them what they want—will hugely gain from this.

We see that Facebook is already acquiring platforms even before the metaverse has gone mainstream, so to speak. So do you feel Web3 will meet the same fate?
Consolidation is of course is a very natural process of evolution. There will be companies that do certain things and they will merge with other entities. It's a very natural cycle. There are companies where first things get disaggregated then things get aggregated and consolidated. Then there is a whole new wave of disaggregation as well. So this is not tech related. I think this is a human psychology or a societal behaviour. It's not only been limited to tech, we see this in traditional businesses, in traditional societies as well. So it's a very human fear which is why I do think it'll happen in the Web Three space as well.

How prepared are content creators with regard to their entry into Web3?
I think creators are extremely, extremely entrepreneurial. I would classify them as amongst the most entrepreneurial lot within the working force. When Instagram started, there were creators who were probably very tech un-savvy. Overnight, not only did they become tech savvy, they started earning a livelihood on various media platforms. So I think as far as creators are concerned, I'm not worried about them at all. For them, it's a matter of making the right platform available where they are able to get an exposure and be able to fairly monetize what they are creating. If those platforms are available, they will bend over backwards and they will learn those technologies overnight.

I think everything needs to move in lockstep. Creators will get attracted to platforms which attract more customers and platforms. Innovation on all fronts will be key. On that note, we are also organizing UNFOLD 2022, India's largest Web3 conferenceUNFOLD 2022, India's largest Web3 conference to showcase India’s role in building a new internet economy, from August 26th. Industry leaders, influencers, entrepreneurs and Web3 & blockchain enthusiasts will pick each other’s brains across panel discussions and master-classes across three days. That's the other thing that we are super excited about.

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