Web3 is increasingly being touted as the future of the internet.
To put it simply, Web3 is a catch-all term for the vision of a new and improved internet, based on blockchains, cryptocurrencies, NFTs and decentralized finance, which gives power back to the users in the form of ownership.
As an online business owner, you need to keep yourself updated on Web3 developments. However, if you’re looking in from the outside, it can be incredibly hard to understand where small businesses like yours fit in within the larger Web3 picture.
Read on for a complete guide on how the growth of Web3 will impact your business.
You’ll learn all about:
- What Web3 is and its pros and cons for entrepreneurs
- Web3 apps and technologies that you can use in your business
- The how-to of NFTs and the metaverse
What is Web3?
Web3 is the result of a number of growing trends in technology:
- Increased focus on data and privacy
- A desire to remove control from monopolistic tech companies like Facebook aka decentralisation
- The rise of blockchain technology.
Check out this blog post for a quick primer on NFTs, crypto and the Ethereum Blockchain →
What does Web3 mean for entrepreneurs?
What attracts most entrepreneurs to Web3 is decentralisation. Web3 allows users to own data and content on the internet – instead of having it all controlled by centralized entities.
This means as a freelancer or entrepreneur, you have full ownership of the work you produce, without intermediaries.
For example, if you’re storing your work on Google Drive, you’ll lose the work if Google decides to delete your account one day. On the other hand, with Web3, you can store that work as an NFT, and no one can take it away from you.
This ability to claim and prove ownership shifts your behaviour on the internet. Without a tech company as a leader, you have as much stake in the network you participate in as anyone else. This means that you get a vote on decisions made by this network. You’re not a consumer of a product owned by someone else. You’re one owner among many.
Data and Privacy
Web3’s method of distribution of personal data storage also improves data privacy. Instead of giving up your data whenever you use an app, Web3 allows you to opt in or out of sharing your data.
You can also protect your privacy by participating in Web3 anonymously. On Web3, you have a single identity that you can use across many networks. This identity is stored in an encrypted wallet, which means people can’t trace it to your actual identity.
Web3 is still in its infancy, and new ideas and technology are emerging every day. To keep yourself informed, read more about Web3 on popular tech news sites like Inc.com, TechCrunch, The Verge, or Wired.
Cryptocurrency for businesses
Finance is one of the most attractive sectors for emerging Web3 and blockchain technology.
As a freelancer or small business owner, how can you leverage cryptocurrency, and what are the pros and cons of doing so?
How to use crypto for financial transactions
1) Get a cryptocurrency wallet.
Your wallet won’t actually store any assets, it’s more like a debit card. It has no actual value, it just stores the private key that proves ownership of a given digital asset like your crypto holdings, or an NFT.
There are different wallets for different cryptocurrencies. If you’re looking to receive payment in Bitcoin, use Electrum, Ledger Nano X, or Exodus.
On the other hand, if you want to get paid in Etherium, use MetaMask, Ledger Nano X, or Exodus. Ethereum is a public blockchain that serves as the foundation for decentralised applications.
For more information on how to create your MetaMask wallet, check out our course on creating your own MetaMask wallet here →
2) Integrate crypto payment on your website or manually share your crypto wallet information with your clients.
If you’re selling a product online, platforms like Etsy and Shopify have partnered with Coinbase Commerce and Bitpay to allow for Bitcoin payments.
If you’re based in the US, you could also buy or receive crypto with Paypal, which is another popular payment option for small businesses.
Important: You need to decide what happens to the crypto you receive. You can either keep it in your crypto wallet and then convert it to your currency when exchange rates are favourable or you can directly convert it to your currency as soon as you receive it.
Pros and cons of using cryptocurrency
There are both upsides and downsides to getting paid with crypto.
- Transactions with cryptocurrencies don’t have banking fees
- They have lower fees for international transactions, making it easier for you to run an international business with crypto
- Many believe that holding business reserves in major cryptocurrencies like Bitcoin could serve as a hedge against inflation. However, cryptocurrencies still can be volatile (more on that below)
- Businesses that use crypto can profit when the value of cryptocurrencies skyrockets
- Cryptocurrencies are extremely volatile, so you can’t accurately calculate the real value of the money you’re getting. In May 2021, Bitcoin plunged 30% in a day, then a few months later doubled in value.
- Crypto transactions are irreversible. Refunds can only be done by the receiver, which means you need a high level of trust with the people you’re buying and selling with.
- Because transactions are anonymous, cryptocurrency can be used to fund illicit activities. Governments around the world are trying to implement regulations around crypto, so if you do use it, stay informed about legal requirements.
Overall, it is a very high-risk, high-reward currency option.
Web3 alternatives to common business apps and tools
Web3 versions of existing Web2 products are now appearing everywhere, and some are getting adopted at an unprecedented rate.
Let’s take an app that you’re probably using right now – your internet browser. We’ll introduce you to two popular Web3 browsers: Brave and Osiris.
The Brave browser is the Web3 alternative to Google Chrome and is developed from the same Chromium code. This is an ideal Web3 browser for beginners or for people who enjoy the Chrome experience.
Brave asks permission to share your data with advertisers. They also pay you a premium that can be converted to crypto if you opt in to see ads. This is drastically different from Google Chrome, which automatically takes your data without asking for permission and sells them to ad companies. It’s also very helpful for businesses where privacy is a major concern.
The browser also empowers creators. It allows users to gift registered creators any tokens they earn from watching ads.
Osiris is a blockchain-based browser that has similar adblocking features like Brave, but also comes with easy access to decentralised apps and projects.
Osiris is integrated with dAppstore.me – an online marketplace where you can find decentralised apps and projects. This partnership helps app creators reach new audiences and vice versa.
The browser also has its own crypto wallet called Metawallet (not to be confused with the Metamask wallet!).
Online Storage Apps
Another family of Web3 apps for businesses are online storage apps – aka alternatives to tools like Google Drive and Dropbox.
One option is Internxt, a file storage service that prioritises privacy. Unlike Dropbox, Google Drive, or Microsoft, Internxt features zero-knowledge encryption, meaning that only you can truly access your files. Files have client-side encryption, so only you hold the decryption key of these.
For developers, Storj and IPFS are popular decentralised and encrypted storage options.
For remote teams, there are Web3 alternatives to co-working applications like Slack and Microsoft Team.
Blockslack.io is a chat system for small remote teams that is encrypted and decentralised.
Mattermost is an open-source, self-hostable online chat service with file sharing, search, and integrations. It’s used by teams at NASA, the US Air Force, and DuckDuckGo.
Web3 alternatives to social media
On Web3, social media companies can no longer sell your data as they did in Web2. Users are directly rewarded if they choose to disclose their data themselves.
1) dApps offers alternatives to social media platforms owned by big tech companies like Facebook, Instagram, or TikTok.
For example, APPICS is a blockchain social media company based in Switzerland. It allows people to earn crypto for their social media activities. It also integrates social media with the NFT space, allowing users to trade, sell, and collect NFTs.
2) dApps also has social media apps for self-publishing.
For example, Peepeth is the Web3 alternative to Twitter and runs on the Ethereum blockchain. Here you can post peeps (instead of tweets) and acknowledge someone’s content by giving them votes and pinning their posts to your profile. Peepeth users can earn tips in ether for posting content.
Another example is Mirror.xyz, a social media blogging platform built on the Ethereum Blockchain as an alternative to WordPress. Users can publish, crowdfund, and run auctions using Mirror.
Finally, if you’re looking for an alternative to Substack or Ghost, Papyrus.xyz is a Web3 publishing and newsletter platform that let readers directly pay writers.
3) Web3 can also change the way you run social media ads for your business.
Web3 allows users to easily opt out of ads – and there are no mechanisms like third-party cookies.
Web3 marketing is about building meaningful relationships with your customers and creating partnerships that benefit everyone involved.
As a result, fractional revenue systems are very popular on Web3.
On Terrain, we’ve adopted this idea by creating our Peak Points system, through which we share a percentage of our revenue each month with our active users. Sign up for your 7-day trial to see how it works →
NFTs and the Metaverse
NFT stands for Non-Fungible Token. They’re digital certificates of authenticity used to assign and prove that you own a unique digital or physical asset. Not sure what NFTs are or how they work? Get a quick intro here →
Now, the main question is – why are NFTs useful for entrepreneurs?
The most common application of NFTs is in the field of arts and collectables. Freelance creators can sell their NFTs on online marketplaces like Open Sea or Super Rare. Check out our course on how to create your first NFT here →
Any digital item that’s considered a collectable can be sold on the above online marketplaces – including digital art, music, video game items, memes, domain names, and any miscellaneous online items.
A great example of an entrepreneur who uses NFTs in their business is Terrain expert Ameni Abida. Ameni exhibits and sells NFTs of her digital art at international exhibitions. Learn more from Ameni on her Terrain Expert Series Interview →
Developers are rapidly expanding other applications of NFTs.
Since NFTs can work as a permanent digital authenticity certificate for anything of value, it’s an ideal technology for identification, certification and documentation. And because everyone has a single encrypted identity on Web3, you can trace the document and certification back to yourself to prove ownership.
One major usage case is the Republic of San Marino, which introduced NFT vaccine passports for its citizens in 2021.
On Terrain, all Lifetime Members receive an NFT as proof of their membership. If they ever want to give up their lifetime membership, they can simply sell their NFT and transfer their membership to someone else.
Similarly, NFTs can be used to tokenize tickets to experiences, like movies, concerts, or sports matches. Each ticket signifies a unique seat and is connected to the buyer’s identity.
With the ownership record on the blockchain, the original owner of the ticket can also monetize from the reselling.
Web3 provides much of the foundation for metaverse technology, which is transforming how online events are conducted today.
Metaverse online spaces allow organizers to build customized virtual worlds where attendees can create custom characters that can interact with each other.
Recently, the first Metaverse Fashion Week was hosted on Decentraland, featuring virtual collections from top brands like Philipp Plein, Dundas, and Etro.
Terrain’s online community is hosted on the metaverse.
We host weekly co-working sessions and regular events in our community space, Arcadia. In March 2022, the Terrain team hosted an online Bridgerton screening for the Terrain community (take a peep at the theatre we built for the event 👇)
Sign up for your 7-day trial today to get a first-hand experience of Terrain’s community on the metaverse →
As a business owner, you can use metaverse technology to enhance the online event experience for your clients and community members.
There are many user-friendly platforms you can use to build metaverses and host online events for your business.
Examples include Party.Space, Microsoft Mesh, and Decentraland in this lesson.
Party.Space is a metaverse platform with multiple chatroom features. It’s popular among larger enterprises, IT and gaming communities, and some other fandom communities. It’s typically used for community or company events like fundraisers, team-building, or training.
Many people like Party.Space because it’s simple to set up and use, and allows users to organize live-streaming quickly.
Mesh is Microsoft’s response to Meta’s Horizon Worlds. The platform can be used on a computer with a VR headset and on your mobile device.
Mesh is integrated with Microsoft Teams and is optimized for collaboration at work. This is a great platform if your team already uses Teams and is looking for a virtual office space.
Decentraland is the earliest among these metaverse projects and has gathered big-name clients like the Metaverse Fashion Week and JP Morgan.
It’s a virtual world built on Ethereum. That means that there is no central entity that owns the platform. Decentraland is run by its users.
It has the most engaging experience out of all the metaverses mentioned in this lesson, but the downside is that your engagement options are limited if you don’t have a crypto wallet.
What to watch out for when adopting Web3
People are looking at Web3 as the future of the internet, so if you earn your living online, this definitely isn’t something you can ignore.
However, like with any new technology, it’s important to exercise caution and make informed decisions about adopting Web3 apps and tools into your business.
Let’s consider the potential areas of concern around Web3:
Less advanced or older devices won’t be able to run many Web3 apps and tools. This can perpetuate inequality and lack of access for many people around the world.
Web3 is complicated. It’s not easy for the ordinary consumer to understand how Web3 works, and it’s yet to develop user-friendly interfaces across its all apps and platforms.
If you’re looking to adopt Web3 into your business, consider how it may affect your team and customers. For instance, hosts should only organize Metaverse events for a tech-savvy crowd with a strong Internet connection.
Web3 is difficult to regulate. Which means it could lead to a rise in cybercrimes.
Cryptocurrencies are often used for illicit transactions on the dark web. And both cryptos and NFTs have been popular fronts for money laundering in recent times.
3) Security tradeoffs
Web3 allows users to exercise control over their identities, but there aren’t any intermediaries to ensure data or asset protection in cases of attacks. The lack of intermediaries makes it harder to address security problems in a system.
As a result, it can be possible for hackers to access crypto wallets if they know the user’s wallet keys.
Significant efforts are being made to enhance Web3 security right now. But until Web3 can become a more secure place for all its users, the security threat will pose the greatest challenge to the mainstreaming of Web3 technology.
And that’s a wrap on how entrepreneurs and small business owners (like you!) can dip their toes into the Web3 waters. We hope you found this blog post useful. If you have any questions (or would like some resources for further reading), please don’t hesitate to let us know in the comments!