Web3 is hailed as the next generation of the internet, and it’s more than cryptocurrencies and blockchain. Decentralization is the foundation of this new paradigm for online connectivity, and brands, both new and old, are racing to deliver solutions to modern problems.
The global Web3 market was worth $3.2 billion last year, and it continues to grow, despite volatile financial market conditions. The underlying technologies and communities continue building, even in a bear market. We’re still in the early stages, but six trends are forming that will likely define Web3 over the next year.
1. Artificial Intelligence and Machine Learning
Artificial intelligence (AI) and machine learning (ML) are commonplace and are disrupting every stage of the modern supply chain. An estimated 91.5% of leading companies regularly invest in AI, and 86% of CEOs say it became a common office tool as of 2021. While useful in the back office, it took the spotlight in 2022 thanks to AI image generators like DALL-E 2, Stable Diffusion, and MidJourney.
Both image generation and natural language processing (NLP) AI models are increasingly being integrated into non-fungible token (NFT) smart contracts. As the technologies evolve, the NFT industry will go along for the ride, and we can expect to see more intelligent NFT projects that utilize AI for verification and more.
2. Decentralized Everything
Social media is increasingly centralized, and mega-corporations like Meta, TikTok, and Twitter proved how valuable these tools are. In their respective heydays, Facebook was a place to chat with friends and family, while Twitter enabled the spread of revolutionary ideas from movements like the Arab Spring and Occupy.
But it’s becoming increasingly clear that this much power can’t remain in the hands of centralized corporations forever.
Instead, decentralized solutions are popping up everywhere, and the success of platforms like Discord proves not everybody wants to be an “influencer” and rank high on search engines. This energy is likely to continue through the next decade as people abandon commercialized platforms and find ways to connect in more intimate, decentralized settings online.
3. Government-Issued Cryptocurrencies
Central bank digital currencies (CBDCs) gained traction over the past decade in countries like Nigeria, Grenada, Jamaica, Saint Lucia, and The Bahamas. As of 2022, countries like the United States, England, Canada, and Sweden are researching CBDCs, while India’s digital rupee is expected to launch in 2023.
These government-issued digital currencies could change the global economy, especially with industrialized nations joining the race for first-mover advantage. The U.S. is heading into the new year evaluating possible design choices for a U.S. CBDC system that could pull us out of the recession nobody wants to admit we’re experiencing.
4. Green Initiatives
On September 15, 2022, Ethereum completed the Merge, which shifted its main chain from proof-of-work (PoW) to proof-of-stake (PoS) and effectively ended the days of mining cryptocurrency for anyone who isn’t running a major industrial ASIC farm. And, of course, industrialized Bitcoin and cryptocurrency mining farms are drawing heat from politicians like Sen. Elizabeth Warren over their environmental impact.
For Web3 to prove it’s a better solution than Web2, these industrialized mining operations need to become greener than standard industrial data centers already made ubiquitous by large enterprises like Google and Amazon. Blockchain projects like Algorand and Solana already have green solutions, with the former being notably carbon negative.
5. Low-Code/No-Code Solutions
Perhaps the biggest hurdle to Web3 mass adoption is how technically capable you need to be to use it. Companies like Canva found a niche in an Adobe-saturated market with simple templates that are perfectly designed for any use case, from presentations to social media. Although Adobe’s Creative Cloud is a giant in the space, bridging the gap to the average user with a sleek and intuitive UI/UX cemented Canva’s place in the market.
Although strides have been made, Web3 is still under construction and just short of a seamless UI/UX. It still requires expertise in blockchain-specific terminology like smart contracts or proprietary coding languages like Solidity. Cross-chain compatibility and further integrations will eventually catch up so that building with blockchain will be as simple as a Canva template in the near future.
6. DAOs vs. Corporations
Decentralized autonomous organizations (DAOs) made headlines in 2021, as flashy DAOs made flashy promises like buying the Blockbuster brand, an NBA team, and the US Constitution. Although these lofty goals made headlines, DAOs really represent a new, lateral type of organization that’s capable of competing with a modern corporation.
Major DAOs like BitDAO proved these organizations can accomplish big things, and they’re focusing on more altruistic goals, like building open-source, community-owned tools. It’s inevitable that we’ll soon be hearing more about big DAOs accomplishing big things while disrupting traditional enterprises with a horizontal corporate ladder.
Web3 has been bubbling under the surface for nearly a decade now, and it’s during bear markets, recessions, and rough economic times that real solutions flourish. Web3 is about more than market capitalizations and million-dollar non-fungible tokens (NFTs). It’s a decentralized technology seeking to democratize technology, communication, currency, and information to put the power back in the hands of the people.
I’m excited to see what happens next in Web3 as more brands, builders, and users onboard, and it becomes more accessible to the masses. Next year is sure to be filled with new innovations–what Web3 trends are you watching?