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Web 3.0 can very well be worth $81.5 billion by 2030 as predicted by Emergen Research. It can even be bigger, or for that matter, smaller. Such speculative figures go well with boom cycles when hype and mania predominate. But they often matter much less to those focusing on the bigger, more long-term picture.
One can’t accurately predict where Web 3.0 will be in the next 10-15 years. It’s still too early for that. Web 3.0 has immense potential and can indeed do wonders that are presently impossible to even imagine. It’s thus pretty reasonable to say, for now, that a bright future awaits Web 3.0.
Yet, Web 3.0 can achieve its full potential and foster the promised future only by addressing certain vital concerns now and here. These are better security, better education and above all, realistic expectations i.e., the keys to ensuring Web 3.0’s mass adoption.
Focusing on and strengthening the above aspects will help innovators endure (and overcome) the ongoing bear market. And they’ll take Web 3.0 to new heights possibly way beyond current forecasts.
It’s better to be safe (and secure) than sorry
Security threats are currently among the greatest challenges facing innovators and users in Web 3.0. Projects make tall claims, promising steep gains to investors who pour in millions of dollars.
But ultimately, it’s the hackers who fill their bags by draining money out of bugs and loopholes. Not to forget scammers, frauds and rug pullers running riots in ‘permissionless’ markets.
Technological limitations are one of the reasons for Web 3.0’s current security crisis. Web 3.0 solutions inherit certain attack vectors common in Web 2.0, such as social engineering attacks like phishing, DNS exploits, etc. But despite that, these systems don’t have adequately robust cybersecurity frameworks to mitigate such risks.
Web 3.0’s foundational principles i.e., decentralization and transparency further complicate the process, presenting a security trilemma. The biggest problem, however, is the approach that many Web 3.0 project owners and developers currently adopt.
They strive for easy and quick adoption, focusing more on promotions and marketing than on building secure, reliable and sustainable systems.
Though budding projects generate substantial capital from various sources, including institutional investors, they often allocate inadequate cybersecurity budgets. This means they cannot afford proper security staff let alone dedicated CISOs (chief information security officers).
Without adequate and mature cybersecurity programs, crypto-native companies often take the ‘we’ll fix it later’ route. This leads to expensive mistakes, as evident from recent multi-million dollar exploits involving Binance and the Ronin Network, among others.
Moreover, Web 3.0’s risky naïveté regarding security weakens people’s trust in the industry, which isn’t great for adoption.
Learning from the past building for the future
Besides tackling inherited threats and rethinking the approach to cybersecurity, Web 3.0 must necessarily learn from past mistakes. Simultaneously, it must identify, address and resolve the domain’s novel and unique challenges. Better education, both preventive and reactive, is crucial for this two-way process.
Since Web 3.0 is a progressive domain, unforeseen possibilities can (and do) play out at every instance. This brings new opportunities but with challenges and attack vectors specific to Web 3.0.
For example, blockchain-powered networks facilitate a whole new financial paradigm i.e., DeFi (decentralized finance), but are prone to attacks such as a 51% attack. Other Web 3.0 innovations, like decentralized domains and identities, are similarly vulnerable.
Therefore, Web 3.0 innovators must study the landscape thoroughly before bringing new products to the market. Doing so helps them avoid vulnerabilities that previously led to hacks and breaches.
Moreover, it empowers them to anticipate security threats, enabling better preventive measures.
Everyone project owners or users do not need to have explicit coding skills to make high-grade security the norm in Web 3.0. All they need is greater awareness and a substantial idea of how things work. This is mainly because most people using Web 3.0 today are early adopters who must ideally be as explorative as the innovators.
So, like everything else in this domain, better education and security must also be collaborative and inclusive rather than exclusive.
The critical question is it too good to be true
Mostly, yes. Both innovators and investors often have unrealistic expectations from Web 3.0. This leads to vicious boom-and-bust cycles, doing more harm to the industry’s stakeholders than good.
Moreover, unreasonably high hopes hamper long-term adoption by disappointing existing adopters and demotivating potential ones.
For clarity, one can imagine the plight of investors who put their money in a Web 3.0 protocol expecting, say, 1,000x yield but don’t get enough liquidity even to exit the protocol by selling off their holdings. Let alone the promised gains they often get steep losses.
And in the worst case, the protocol’s anonymous team pulls the rug on their entire investment be it thousands, millions or billions of dollars.
Web 3.0 isn’t a get-rich-quick scheme, and it’s better not to treat it that way. Mainly because unrealistic gains (and losses) aren’t sustainable in the long run.
One must realize that Web 3.0 entails free and competitive markets that stabilize with increasing maturity. There’s no place for fabricated, hype-driven spikes in demand. And since they are inevitably corrected over time, they can only provide speculative short-term gains at best.
Therefore, Web 3.0’s long-term adoption requires stakeholders to work with realistic expectations. The awareness of what is and what isn’t possible is crucial here.
And partly, this comes with the kind of education discussed above. But it’s also about giving up greed and speculations and striving for certainty and sustainability instead.
Last but not least, Web 3.0 must not altogether discount the lessons learned in Web 2.0. Instead, it’s better to take a more holistic approach to adoption by combining the best of both worlds.
For one, this will allow Web 3.0 to expand its horizons significantly, unlocking groundbreaking opportunities while meeting high standards and expectations.
David L Schwed is the chief operating officer at Halborn. Previously, he served as the global head of digital assets technology for BNY Mellon, where he was responsible for integrating the IT strategy for BNY Mellon’s digital asset offerings across the enterprise. In addition, he has worked in the financial services sector at a senior level for Merrill Lynch, Salomon Smith Barney, Citigroup and Galaxy Digital.
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