John Liu, head of product for Amazon Web 3 Services, offers an overview of this next generation of the internet. He’ll share his perspective on what Web3 for business means.
What is Web3 for Business?
Over the course of about 30 years, the internet as we know it has evolved dramatically, from Web 1 to Web 2 to now the frontier of Web 3. “Web 1 was really a ‘read’ type of experience and existed in the years from 1990 to about 2005,” explains John Liu, head of product for Amazon Web 3 Services. “This era was characterized by very few content creators and lots of content consumers.”
Late 2004, Liu explains, saw marketplaces, such as Pets.com and Amazon.com, springing up. “As technology continued to improve, the web evolved into a more interactive type of web page, where the content consumers could actually interact in real-time with the content creators. Think about social media. The content consumers are actually contributing as much value to the networks as they are consuming,” says Liu.
This leads us now to Web 3, or what Liu refers to as a “read, write and own internet,” where individuals can share in the value provided as content consumers and as content creators.
For John’s full session on Web3 for Business, visit the D2 On-Demand Library
- Principle 1: It is decentralized. Decentralization offers a way for people to participate in sharing the value that they create in an open-source network—a network that can’t be shut off.
- Principle 2: It is permissionless—it offers open and easy access. Today, he says, “Not everyone can join the internet, take advantage of all the fancy bank applications, social media applications, that we have. Some is because of technology; some could be because of regulations or censorship.”
- Principle 3: It uses native payments (cryptocurrencies) embedded into its technology, instead of the traditional payment processors or banks.
- Principle 4: It is trustless. It relies on technology like smart contracts and economic incentives over trusted third parties.
Web3 for business is “a balanced implementation of these principles that will lead to success,” he notes.
The Web 3 Building Blocks
Liu describes Web 3 as a layer of components.
- The first layer, the foundation, is the blockchain—the basic open-source infrastructure that people can build upon. The blockchain can be public or private, and “It’s standardized, it’s programmable, and it can be upgraded as well,” says Liu. On top of the blockchain is decentralized finance, which creates the economy to build Web 3 around. “You supplement that with nonfungible tokens, and now you have something to market, a unique asset to sell,” says Liu.
- Additional concepts on this second layer include decentralized services, decentralized identities, and decentralized autonomous organizations or DAOs: a series of smart contracts that let separate entities collaborate better. “How can we actually govern things that we equally share? How can we introduce changes to a system that we equally share among different counterparties, some of them that are in a competitive state? Well, that is what DAOs are good for,” says Liu.
- The third layer is the custody and access layer. “Typically, this is in the form of wallets,” says Liu. And above that level are the applications and virtual reality and augmented reality hardware.
- This “leads us to the metaverse, this billion-dollar opportunity according to JP Morgan, they predict that it is going to be a huge enterprise in the next 10 years. But why is that the case? Because this is going to be something where social connection takes place not just for entertainment but for work,” says Liu. Metaverse, explains Liu, is a type of Web 3.
So how can Web 3 enhance business?
Web 3, says Liu, can assist businesses with their B2B relationships. “It gets you that global scale,” says Liu. Web 3 will help businesses reach the consumers of the future. It can shorten financial transaction times. It adds a new asset class. And it can simplify regulatory compliance.
Web 3 can also assist businesses with their B2C relationships, as it increases consumer engagement. As Web 3 adoption becomes much more prevalent, independent creators and their communities are going to become increasingly important to brands. And likewise, digital experiences are going to become increasingly important to the next generation of consumers—Gen-Z.
To stream the full video from John’s session, click here.