What is WEB3 and how can it affect your business?

Introduction:

In recent years, the term “Web3” has gained popularity, positioning itself as the next big Internet revolution. But what exactly is Web3 and how can it affect your business?

In this article, ILP Abogados offers you a complete guide to this new digital paradigm and explains why it is important to have specialised legal advice in this area.

What is Web3?

Web3, also known as Web 3.0 or decentralised Web, is a new version of the Internet, currently under development, based on blockchain technology. It aims to decentralise data and make the Internet more secure and transparent.

Web3, still in its early stages of development, already offers a variety of functional applications that are transforming various sectors. Some examples are highlighted below:

1. Decentralised Finance (DeFi):

• Lending and borrowing: Platforms such as Aave and MakerDAO allow users to lend and borrow cryptocurrencies without traditional intermediaries.
• Decentralised exchanges (DEX): Uniswap and SushiSwap are examples of DEXs that facilitate the exchange of cryptocurrencies securely and without the need for intermediary accounts.
• Stablescoins: Stable coins such as DAI and USDC are pegged to real-world assets (such as the US dollar) and offer a more stable alternative to volatile cryptocurrencies.

2. Non-fungible token (NFT) markets:

• Digital art and collections: NFTs have enabled the creation of digital marketplaces for art, collections and other unique digital assets. Platforms such as OpenSea and Rarible are examples.
• Games: Play-to-earn games allow players to earn cryptocurrencies or NFT through their participation in the game. Axie Infinity is a prominent example.
• Digital identity: NFTs can be used to create verified and secure digital identities, which could transform the way we interact online.

3. Decentralised social networks:

• Platforms such as Mastodon and Diaspora offer users greater control over their data and privacy compared to traditional social networks.
• These platforms operate using open source protocols and are based on a distributed network of servers, which makes them more resistant to censorship and manipulation.

4. Decentralised data storage:

• Platforms such as Filecoin and Storj offer a decentralised alternative to traditional cloud storage services.
• Users can store their data on a distributed network of computers, which increases security and privacy.

5. Decentralised Autonomous Organisations (DAO):

• DAOs are organisations managed by their members using blockchain smart contracts.
• They allow for more democratic and transparent decision-making and can be used for a variety of purposes, such as investment management and project financing.

Main features of the Web3:

• Decentralisation: Web3 does not rely on central servers, but is based on a distributed network of computers. This means that no single actor has control over information or applications.
• Security: Blockchain technology guarantees the security and immutability of data, thanks to its cryptographic system and distributed records.
• Data control: Users have greater control over their personal data and can decide how it is used and shared.
• Token economy: Web3 uses digital tokens to incentivise participation and value creation on the web.

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How does Web3 work?

In today’s Web (Web 2.0), most data and services are controlled by large companies such as GOOGLE, META and AMAZON. These companies collect large amounts of user data, which they then use to target advertising and sell products and services.

In Web3, data and services will be stored on a distributed network of computers, rather than on centralised servers. This means that no single company will have control over all data and users will have more control over their own data.

Web3 will also use smart contracts, which are computer programmes that can automatically execute agreements between two or more parties. This could revolutionise the way we do business, as it would allow transactions to be conducted more securely and efficiently.

Main challenges of the Web3:

• Scalability: Current blockchain technologies are not yet scalable enough to handle a large number of users.
• Usability: Web3 applications can be complex and difficult to use for non-expert users.
• Regulation: The lack of a clear regulatory framework for Web3 creates uncertainty for companies and investors.

Despite these challenges, the potential of Web3 is enormous. This new version of the Internet has the potential to transform the way we interact with the web, giving us more control over our data and creating new opportunities for innovation and entrepreneurship.

How can Web3 affect your business?

Web3 has the potential to transform many aspects of business, from the way we interact with customers to the way supply chains are managed.

Web3 has the potential to transform a number of sectors, including:

• Finance: Web3 can enable the creation of new, decentralised, more efficient and transparent financial systems.
• E-commerce: Web-based e-commerce platforms3 could offer greater security and control for buyers and sellers.
• Social networking: Decentralised social networking on the Web3 could give users more power over their data and experiences.
• Entertainment: Web3 could open up new possibilities for the creation and distribution of digital content.

Some of the possible applications of Web3 for business include:

• Creation of new business models: Web3 could facilitate the creation of new business models that are impossible on the current Web. For example, the creation of decentralised platforms for buying and selling products or services.
• Improving the efficiency of supply chains: Web3 could improve the efficiency of supply chains by tracking products and materials throughout the supply chain.
• Increased transparency: Web3 could make companies more transparent by providing consumers with more information about their products and services.

How to prepare for Web3?

Web3 is still in its early stages of development; however, it is important for businesses to start preparing for its arrival.

Some actions you can take to prepare include, for example, the following:

• Learning about blockchain technology: It is important for companies to understand how blockchain technology works and how it could be applied to their business.
• Experiment with Web3 applications: There are a number of Web3 applications available that companies can use to experiment with this new technology.
• Partner with Web3 experts: There are a number of companies that offer Web3 consulting services. These firms can help develop strategies for adopting Web3.

Legal advice specialising in Web3

At ILP Abogados, we have a team of experts in blockchain technology and cryptoassets who can advise you on the legal aspects of Web3 and help you develop strategies for adapting to Web3 in your business.

At ILP Abogados, we value quality and experience above all else. We offer you a personalised service tailored to your specific needs.

If you are interested in more information about Web3 or if you need legal advice on any matter related to blockchain technology or cryptoassets, please do not hesitate to contact us.

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