Daniel A. Keller, CEO and President of InFlux Technologies Limited. Co-founder of Flux.

In the early 2000s, Web2 emerged, which gave people more options than its predecessor, Web1. Now Web3 ushers in the next evolution of the Internet – a version that moves away from the centralized control of Web2.

An overview of Web3

The term Web3 comes from the computer scientist Gavin Wood. Web3 leverages decentralized networks and gives users more control over their data. DePINs (Decentralized Physical Infrastructure Networks) represent the critical physical infrastructure layer for Web3, providing decentralized alternatives to traditional storage, compute and other infrastructure requirements. Essentially, Web3 allows the Internet to become more open than before, becoming more like a public square than a curated, controlled space.

Two prominent applications of Web3 are decentralized finance (DeFi) and non-fungible tokens (NFTs). These and other applications around Web3 focus on personal identity, digital asset ownership, and decentralized peer-to-peer networks. Web3 is a rapidly growing industry. According to Grand View Research, “The global Web 3.0 market size was valued at $2.25 billion in 2023 and is expected to grow at a compound annual growth rate (CAGR) of 49.3% from 2024 to 2030.”

How companies can benefit from Web3

Web3 will not replace Web2. Instead, both will coexist and complement each other.

Many business leaders have concerns about using Web3 and DePINs. These concerns are understandable as these are relatively new technologies that are not yet widely used in the business world. However, by using Web3 and DePINs alongside Web2, companies can achieve several key benefits.

First, on the IT side, companies want to ensure they are protected from a single point of failure. If a problem occurs with one of Web2’s centralized offerings, thousands of websites and applications can be disabled in a matter of seconds. In contrast, with Web3, an extensive network of individual units provides power – if one unit fails, others can step in. There is not a single point of failure.

Additionally, if an entity fails, the backups can run automatically on Web3 without the need for human intervention. Companies do not have to take manual steps, for example to switch to an alternative server after a node fails. Because of the automatic nature of backups, executives don’t have to worry about their critical operations suddenly going down and scrambling to get everything up and running again.

Another advantage of Web3 is lower redundancy costs. Although Web3 can have high implementation and integration costs, it can help companies save on building redundancy measures in the long run. In a centralized environment, it is extremely expensive for companies to build in redundancy measures themselves.

How companies should go about implementing Web3

When developing a strategy for Web3 implementation, managers should first ask themselves whether it makes sense for their company. There are some use cases that justify implementing Web3, but others don’t. For example, Web3 can be beneficial in healthcare and supply chain management as it can help secure medical records and transactions, respectively. But for other types of businesses, such as local retailers and construction companies, using Web3 isn’t necessarily a pressing need, and it’s probably not worth investing the time and effort required to do so.

If executives decide that implementing Web3 makes sense for their organization, they should learn as much as possible about it and the various solutions available – and how to integrate those solutions into their business processes.

From there, leaders should plan the phased implementation of Web3. I tell every business leader I talk to not to move their entire infrastructure to Web3 on day one. Web2 and Web3 should work symbiotically, and leaders should balance their infrastructure between Web2 and Web3.

Why? Web3 has come a long way, but the technology has not yet reached its full potential. The future of Web3 and DePINs depends on interoperability, especially between blockchains. Instead of being isolated, networks need to be better bridged and communicate with each other. With a hybrid approach that leverages current Web2 infrastructure while implementing new Web3 infrastructure, companies can gradually transition to this new technology, reaping the benefits of decentralization while maintaining their continuity plans and updating their employees and customers .

Ultimately, if there are use cases that require it, by gradually implementing Web3 now, companies can begin to gain more control over their data, increase redundancy, and be better prepared to adapt and continue to take advantage when the technology is mature.

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