INTHEBLACK July 2022 - Magazine - Page 17
differentiating itself from the entire market with its
expertise around Web 3.0.
Yet it would be a mistake to consider Web 3.0 as being
simply about cryptocurrencies. It is so much more.
WEB 3.0 IN A NUTSHELL
To understand Web 3.0, it’s important to know what has
come before.
Web 1.0, developed in the early 1990s, involved static
pages that simply offered information, like an online
version of a hard-copy brochure. There was no
interaction or communication. If contact was to be
made as a result of a web page capturing a person’s
interest, it would be via the phone number or email
address found on the site.
Web 2.0, generally agreed to have begun in 2004,
brought the internet enormous leaps forward. Social
media was developed, meaning people began
interacting and connecting online.
We began online shopping and having items we
purchased delivered to our doors. With Web 2.0 we
became online consumers.
This came with a massive trade-off in the form of our
privacy. Large, centralised organisations owned and
exploited our data. At times the data was alleged to
have been used for nefarious purposes, as discussed
widely during the Facebook/Cambridge Analytica case.
“The easiest way to think of Web 3.0 is the ability for
individuals to not just read and write data from the web,
but also to own the data,” says Karl Mohan, general
manager APAC for Crypto.com.
Firstly, according to Mohan, Web 3.0 is about taking
back the power from large, centralised organisations.
“How does this help? First, it’s about privacy,” Mohan
says. “As much as the Googles, Amazons and Facebooks
of the world talk about privacy, they’re concerned with
anything but. A lot of their contracts allow them to sell
your data.”
“Second, increasingly we’re seeing content creators
– people who write freelance, people with photography
skills, musicians, etc. – having the ability to own the
creative rights over the content they create, to track
every sale and make a commission from every sale.”
This means that by owning their own data, individuals
can now share, commercialise and control that data
themselves, removing the intermediary.
FROM CENTRALISED FINANCE TO DEFI
With Web 3.0, all industries will be disrupted. In finance,
however, disruption will arrive in the form of DeFi.
“THE EASIEST
WAY TO THINK OF
WEB 3.0 IS THE
ABILITY FOR
INDIVIDUALS TO
NOT JUST READ
AND WRITE DATA
FROM THE WEB,
BUT ALSO TO
OWN THE DATA.”
KARL MOHAN,
CRYPTO.COM
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“DeFi is decentralised finance,” Mohan says. “It’s
basically peer-to-peer finance.”
Peer-to-peer finance has been around for a while,
but Web 3.0 offers the ability to supercharge and
democratise the idea. Coded, smart contracts saved
in a blockchain can be created between individuals.
These contracts remove the need for a centralised
financial organisation. When seeking a loan, for
example, an individual will no longer have to deal
with a bank or credit provider. This means the fees and
time-consuming processes that currently characterise
such intermediaries will become a thing of the past.
There are several benefits to the DeFi model,
Mohan says. These include contract transparency and
negotiability, cost transparency and immediacy of
transaction. It also opens up banking and credit facilities
to anybody, anywhere in the world, as long as they have
a smartphone and a web connection.
WHAT ARE THE DOWNSIDES?
As with today’s centralised financial model, there are
downsides.
There is no centralised controller in the DeFi
environment, so if things go wrong, there is no recourse.
In a largely unregulated environment, this means there
is room for bad behaviour.
Hence, the value of accountants and advisors familiar
with the landscape.
For better or worse – likely both – this will mean
people must take greater responsibility for their own
finances rather than trusting major institutions, which
themselves have sometimes proved untrustworthy.
“DeFi is probably going to take a generation to even
start realising its potential,” McLeod says. “The
technology always goes faster than the people.”
“I think there’s scepticism from the older generations,
but younger generations are more enthusiastic for a
finance system that is less elitist and more inclusive of
more economies.”
Gavin Appel, founder of start-up and business advisory
Ignition Lane, says businesses that familiarise themselves
with the Web 3.0 environment will quickly differentiate
themselves in an increasingly competitive market.
“The technology world is evolving faster than ever
before,” Appel says. “Status quo is your biggest
competition, and it is now impossible to separate
business strategy from technological innovation.”
“How you decide to embrace new waves of
technology will be a determining factor in creating a
competitive advantage for you and your customers.”
intheblack.cpaaustralia.com.au July 2022 17