The 5 customer benefits of Web3

Over the last few weeks, I’ve been reading a lot about Web3, a topic that interests me a lot. What I want to talk about today is the cross-fertilization between my own passion for CX and the trending technology of Web3. So read on if you are curious about the benefits of Web3 for customers.

For those who are not yet familiar with Web3, I briefly explain what it is (this article by Maurits Kreijveld is also very worthwhile in this light):

  • Web1: read
  • Web2: read + write
  • Web3: read + write + own

Web1, the first read-only version of the Internet, consisted of simple, static websites with limited functionality or interaction. In the next phase, Web2, the web became participatory. Users could create content, interact with each other, share information and so on. This is called the read-write phase. The downside of this was that it created a concentration of power, centralized in a few big players like Facebook, Google and Twitter.

Web3 should be a decentralized version of the Internet, using blockchain technology. Its main function is ownership as it gives users full control over their content, data and assets through blockchains. The dream is that Web3 will use blockchain, crypto and NFTs to return power to the Internet community and thus break the monopoly of the Web2 giants. So we get a fairer, more independent and open internet.

What Web3 can do for customers

Of course, Web3 is still under construction, so we do not know exactly what it will look like yet. For me, it’s an extra good reason to research what it might mean for customers. Personally, I’m especially excited that a lot of people think it’s one user-oriented customization of the Internet will be (while Web2 was application-oriented): it provides more power, more control, more security and more privacy to its users. Let’s see what this means for users and / or consumers.

Power back at consumers

With Web3, end users regain full ownership and control of their data and enjoy greater security through encryption. This means that they can choose whether and when information about them can be shared with or and / or used by advertisers, marketers, researchers, etc. One of the ways to do this is with simple and intuitive interfaces that allow users to See what information they share with web service providers.

If you think it’s not that big of a problem, you’re wrong. Not only does it have a huge impact on consumers’ privacy and security, but it also allows them to take full control of personalization and even receive money to use their information. For example, they may earn micropayments for survey responses or be paid with tokens to consume or share content.

On a positive side, this change in data ownership will hopefully mitigate the stronger polarization of society driven by ‘echo chambers’ on social media like Facebook. This will of course make the marketing effort much more ethical as this data model is much more transparent and allows the user to. Consumers will be able to track their data and see the source code of the platforms they decide to use. This in turn will restore trust between consumers and brands, which is especially important after all the negative emotions surrounding Facebook and even Amazon.

The end of online boundaries

We are so used to it that we almost never think about it, but there is one BIG difference between the physical and the online world, and that is ‘interoperability’. When you buy a dress from Zara, you can wear it at home, at work, on the street, in the woods or wherever you want. For example, if you purchased a digital version of this Zara dress in Roblox (a game that is part of the metaverse), you probably would not be able to wear it in Meta’s Horizon metaverse. This is because the metaverse is still a collection of separate metavers for now, not a large open platform. This means that consumers can almost never move digital assets from one virtual world to another. It’s extremely inconvenient, but we almost never think about it because it’s always been that way.

Web3 has the power to change that. All your information and assets will be centralized in your own little ‘suitcase’, whether it is a crypto wallet or a space with independent sovereign identity (SSI), in the form of tokens. What you own will be connected to your identity rather than a platform. So you can take everything with you when you jump from one application or ecosystem to another. This can also have a huge impact on the interoperability between IoT devices in general and smart homes and smart cities in particular.

Common value and influence

But the impact of Web3 can go much further than just privacy and convenience. One of the parts that I find most interesting is that users or consumers will be able to participate in the value and influence of companies. This is where NFTs and smart contracts can come into play.

An NFT or non-fungible token is a blockchain registration of a cryptocurrency representing a piece of digital media. Non-fungible means it is one unique is digitally corrupted and cannot be replaced by anything else. As Verge says: “a bitcoin is fungible – swap one for another bitcoin and you have exactly the same thing. However, a unique trading card is not interchangeable. If you switch it to another card, you have something completely different. “

What happens to NFTs today is still mostly gimmick (read my post on this), but I see them really moving beyond the current “exciting” collectible phase (like the infamous Beeple painting that sold for $ 69.3 million) and they can really change the game of customer loyalty. They can offer smart contracts that can really play an important role in promoting customer engagement. The example I like to give is how Kings of Leon released an album as an NFT and their tokens, including a limited number of unique looking ‘golden tickets’, unlock special perks like limited edition vinyl and front row seats for future concerts.

The most interesting potential of NFTs lies in the concept of what I call brand economies. Most current loyalty systems – such as frequent flyer programs – are completely out of balance: more benefits accrue to the company than to the customer. With NFTs, customers become much more involved, which then becomes part of the journey. If I, as a frequent flyer, had an NFT interest in a company, we would have a common interest rather than an opposing interest. In other words, if the company does well, the value of NFT will increase, and so will I. And then I as a customer will enjoy when the brand does better and I become its ambassador. In fact, the customer becomes an emotional shareholder.

But it is not only value that is being shared. It is also about common influence. And this is where DAOs (Decentralized Autonomous Organizations) can play a big role. Basically, DAOs are organizations, but on the Internet, where the rules are laid out in a smart contract with pieces of code that run automatically when certain criteria are met. (Read the interview of my company nexxworks with Maarten Smakman if you want to better understand how they work).

A good example of a DAO that gives more influence to the users could be Chingari. This is an India-based social video sharing platform and a potential competitor to TikTok. Chingari supports Web3 principles, but the interesting thing is that it ultimately acts as a DAO, where people who have an interest in it can influence its direction. So the Web3 model would not only allow customers to share in the value of a business, but they could also influence it. Like the data ownership part I described above, this would also give them more power and significantly change their relationship with organizations.

The group’s interest first

The DAO section of Web3 also has great potential to help users and consumers organize and establish organizations online by automating ownership and decision-making among members. DAOs are a great way to get groups of people together quickly and fairly, whether it’s in an organization or just on a stand-alone project. All the things that usually require a lot of lawyers, paperwork and time, and which become even more complicated if the participants live in different states or countries, would be done much more efficiently.

It would theoretically be possible to measure the work each participant contributes to a project: one wrote code, another helped with marketing, another helped manage a Discord server where DAO members meet. For example, this could be interesting to launch startups, but that is not the focus of this piece. But imagine what it would mean if dissatisfied consumers legally united against a brand. Or if their biggest fans formed a strong community. I think the combination of DAO plus community plus consumer could be very interesting in the future.

Improved user experiences

And finally, especially when combined with the other big trend, the meta-verse, Web3 offers the ability to enhance user experiences in a way that makes them more fun, more relevant, more community-driven, and more inclusive.

But beware: only parts of the meta-verse can be considered a Web3 phenomenon. Highly centralized metaverse platforms such as Horizon by Meta are not (yet) part of Web3, though the company recently announced plans to dive into crypto and blockchain for that reason. Strictly speaking, only decentralized platforms like Decentraland can be considered as Web3. It’s even more complicated: Metaverse platforms can sell digital goods as tokens, often non-fungible (NFTs) that be separated from Web3. For example, virtual land in the meta-verse can be sold as NFT. In late 2021, Nike bought the virtual shoe company RTFKT to sell sneakers as NFTs in the metaverse. Gap has also started selling NFTs of their iconic logo sweatshirts for metaverse. The reason metaverse would work much better if it were part of Web3 is – as I mentioned above – interoperability: you could then buy Nike virtual sneakers and wear them on all platforms.

The combination of ownership, smart contracts, reward systems and immersion could be very interesting for customers of metaverse platforms. For example, users who decide which companies get their data and for what purpose will be able to use services that are much more personal and tailored, changing the relationship between these users and brands.

So I would say that these are the most relevant user benefits in Web3 that come to mind first:

  1. Power back at consumers
  2. The end of online boundaries
  3. Common value and influence
  4. The group’s interest first
  5. Improved user experiences

I’m curious about what yours is. Tell me in the comments!

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