Blockchain The New Web 3.0

Blockchain The New Web 3.0

Blockchain
August 8, 2019 Editor's Desk
501
The introduction of new and disruptive technologies often proves to be the biggest opportunities to gain profit. An apt example would be how the emergence of the World Wide Web and the internet created opportunities for a lot of most notable investments in the last two decades. Companies like Facebook and Google converted hundreds of
Blockchain Web 3.0

The introduction of new and disruptive technologies often proves to be the biggest opportunities to gain profit. An apt example would be how the emergence of the World Wide Web and the internet created opportunities for a lot of most notable investments in the last two decades.

Companies like Facebook and Google converted hundreds of their employees into millionaires, and their founders and early investors are now billionaires. 

Entrepreneurs and analysts are currently trying to discover the similarities between the internet and blockchain, where some might even refer to blockchain as “Web 3.0” because of its revolutionary nature. 

The following analysis intends to provide a more modulated perspective for judicious capital allocators.

Similarities Between Blockchain And The Internet

Technically, the internet is a network of distributed computers which are linked with open-source technologies. This does not sound too different from the concept of blockchain. A standard set of program codes allows the electronic devices to exchange data almost instantly. Emails have replaced the need for printed communication. New audio protocols allow free communication on various apps. But most importantly, it enables new entrants to disrupt their businesses.

As the capacities of internet protocols prove to keep growing, the use cases did too.

Blockchain-based protocols work in a similar way as the internet protocols, added the former provides additional security features that make recorded transactions next to impossible to modify or reverse. This is commonly referred to as “transaction immutability,” and allows developers to build smart contracts.

Smart contracts can simply be understood as digital vending machines; where you insert the correct input (coin or token) and the code provides you with a desired service or product, without the specific need of validation or human interference.

Standardized smart contracts, like internet protocols, allow client applications to transact directly with each other. And because the blockchain-based recorded transactions cannot be modified or reversed, and do not require an intermediary, fraudulent activities are prevented and the transaction is secure. 

Blockchain Versus Fintech

Fintechisshort for “financial technology,” and it has been a keyterm used in the investment community for quite a while now. Although, it is important to keep in mind that fintech companies are still dependent on legacy banking services, like the Automated Clearing House (ACH) and the Society for Worldwide Interbank Financial Telecommunication (SWIFT). This dependence on the legacy systems can cause delay or even lead to incomplete transfer of funds for customers.

Blockchain-based protocols allow for the transfer to be stored purely in digital form and take comparatively very little time. The cost is also eliminated by a lot as compared to legacy financial services which incur a percentage-based fee on the overall transaction value. Fees on blockchain-based transfers are normally on the basis of transaction demand and speed. 

Considerations For Investors

For the purpose of investment, blockchain is best referred toas the building blocks foranew open-source transactionprotocol and smart contracts, providingservices which were previously only offered by finance industry professionals. Unlike thetraditionalinternet protocols, which were limited to the transfer of data, blockchaintechnology allows transactions frompeer-to-peer. This has the ability todrastically diminishthe need for intermediaries and middleware.

Similar to the early days of the internet, current blockchain-based protocols are inhibited by interfaces designed by engineers for engineers. But as these protocols are being used for user-friendly interfaces, the serviceability of these protocols will be accessible to a bigger audience. Investors should invest in start-ups that allow the fundamental innovations blockchain provides — specifically the application of a digital bearer instrument to decrease the friction and cost for users.

At this stage of the technology, this might be the only road map visible in a company. Savvy entrepreneurs constantly hunt for opportunities in direction to find solutions which provide users with even more value. As a thumb rule, the main value intention of a start-up should not merely cost reduction.

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