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Web3 for German companies – Advantages and challenges

Web3 stands for a new version of the World Wide Web that incorporates concepts such as decentralization, distributed ledger technologies and token-based economics. The development towards Web3 is of crucial importance for companies in all sectors. This innovative and decentralized technology brings trust, security and transparency to business processes. In addition, Web3 opens up new opportunities to fundamentally challenge traditional business models. In this article, we show the advantages and challenges that this presents for German companies.

What is Web3?

Over the last few decades, the internet has undergone a remarkable evolution from a static web1 to a socially networked and centralized web2. We are currently in the midst of a revolutionary change: Web3 stands for the third generation of the internet, based on decentralized technologies such as blockchain, which has the potential to fundamentally change the way we interact, define ownership and create value online.

At a time when data leaks, surveillance and trust issues are attracting a lot of attention, Web3 promises to be a game changer by embedding trust, security and transparency in online digital processes. Both businesses and consumers who use the internet in any form will be affected by the changes that Web3 brings. Web3 therefore encompasses a wide range of fascinating topics that will determine the future of the internet and digital interaction. 

Web3 Sector Views from Deloitte: What Web3 means for different industries

CBDCs as the gateway to Web3 – Banks are facing the next wave of digital transformation

Central Bank Digital Currencies (CBDCs), i.e. a digital representation of cash, enable central banks to fulfill their legal mandate – the provision of a national means of payment – even in a world of digital payment systems. Our “Web3 Sector Views” show that young consumers in particular have a positive attitude towards a digital central bank currency. However, how banks can best respond depends heavily on the specific design of a CBDC.

New high-speed networks as key enablers for Web3

Web3 New-generation telecommunications networks and Web3 form a symbiosis: technologies such as fiber optics and 5G create the infrastructural basis for the Internet of the future. At the same time, network operators finally have the killer use case in the consumer sector, as Web3 involves transporting very large volumes of data with maximum security. This opens up new options for telecommunications providers in terms of monetization and partnering – provided they quickly align their strategies with the requirements of the Internet of the future. 

What does Web3 offer German companies?

With the help of Web3, companies can interact and trade directly with other organizations and individuals, possibly without the need for middlemen. Blockchain technology plays a central role here, as it optimizes business processes, increases data security and reduces fraud. The introduction of cryptocurrencies and tokenization opens up new financing options, e.g. decentralized finance applications (DeFi) and promotes the development of more loyal customer relationships. The development of decentralized applications (dApps) and smart contracts makes it possible to create new products and services to revolutionize traditional business models. It also facilitates the ownership of digital assets and participation in new financial markets such as decentralized exchanges and credit protocols.

The metaverse is also gaining importance as a virtual environment that goes far beyond previous notions of social media and online interactions. The metaverse offers companies further prospects for developing new business models, presenting their products and services, holding virtual meetings and conferences, reaching customers and offering them interactive experiences.

 
Challenges for companies
 
However, for the vision of Web3 to be realized, companies and developers need to look beyond the technology and also consider the social, economic and legal implications. It is therefore important that companies also understand the potential challenges associated with Web3, including regulatory uncertainties. In addition, there is a need to address the complexity of the technology in order to identify and address technical risks and barriers to scaling.
The Web3 community is an ever-growing and collaborative community that enables developers to learn from the ideas of others and network in an increasingly decentralized ecosystem. For internet users, Web3 promises more control over personal data and enables a new form of digital identity. 
 

Source: Deloitte, automated translation
Image: blacksalmon via stock.adobe.com

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