Web3 and the Metaverse are shaping a new internet application layer. How can leaders better comprehend this evolution and its implications for businesses, organisations, and society?
In the same way that we use standardised protocols and devices to interact with digital experiences on the internet, Web3’s promises could help enable consistency and interoperability across metaverse experiences—uniting disparate, disconnected metaverses into a single coherent platform. Walled gardens, open commons, and any number of creative innovations, similar to the web, can be accessed via browsers, mobile apps, AR glasses, VR headsets, and other means.
The metaverse and Web3 are powerful “waves of change” that will most likely elevate us into new and challenging future “worlds” that business leaders will have to navigate. Businesses should collaborate to build the foundation of this new internet platform through metaverse and Web3 initiatives in order to reap the benefits.
Many aspects of Web3 and the metaverse are already taking shape, enabling new innovations and opportunities while exposing the risks and uncertainties associated with this disruptive shift.
Successful blockchain implementations are progressing, from proof-of-concept to deployments to customer service. However, many Web3 solutions are highly technical, there are numerous vulnerabilities due to immature implementations, volatility and asset inflation from both investors and scammers, and a significant amount of noise clouding the market. There is fragmentation among crypto wallet and identity providers, and there is a growing need in crypto markets for stability and liquidity guarantees.
There is also a need for consistent payment rails across crypto and fiat currencies, as well as thoughtful regulation to support innovation within a reasonable framework. Furthermore, the high energy consumption of proof-of-work blockchains may slow adoption while increasing operational costs and environmental impacts. The impending transition to more efficient proof-of-stake blockchains, as well as an increase in green energy supply to power these protocols, could help to reduce energy consumption.
It may take several years to scale user-centric identity, asset portability and interoperability, and the transition to hybrid models of centralization and decentralisation.
Alternatively, they could simply empower a small band of early adopters and disruptors to forge a new competitive flank. In the near term, disruptors may drive more change as leading incumbents work to strengthen their platforms. This posture may assist leaders in defending their current business, but it may cause them to fall behind if they do not act now. They will almost certainly need to cooperate and form alliances in order to achieve the metaverse’s critical interoperability.
The early advancement of the metaverse may have been hampered by too much hype and criticism, ambiguous definitions, and a tendency to insist on VR and AR as prerequisites. The interface to the metaverse, like the web, should be device-independent. With extensive use cases on mobile devices, for example, augmented reality has advanced without AR glasses being widely adopted.
Many challenges confront business leaders in the areas of cybersecurity, trust, brand reputation, and digital rights management. Web3 and the metaverse may necessitate new network and partner ecosystem implementations. For businesses that are already concerned about these disruptions, this can increase the surface area of vulnerability and data risk. Malevolent actors may find new and more advanced ways to attack organisations as complexity increases.
Layered blockchains and bridges are vulnerable. Crypto custody can be compromised, the validity of NFT transactions jeopardised, and a user’s true identity can be extracted from transactional data. Immersion and embodied digital interactions may generate a large amount of data about users, exposing new threats and security concerns.
Organizations may need to advance physical and digital security policies, processes, and technologies while also evolving identity management, threat detection, consent and content management, data protection, and compliance. Nonetheless, there are numerous use cases and lessons to be learned, as well as a wide range of experiments to investigate that can assist in addressing the challenges.
With all of the hype and criticism surrounding Web3 and the metaverse, it can be difficult to navigate so much change and discontinuity. Web3’s foundations are already in place, and it will continue to seek value and eliminate problems. Many metaverse capabilities and behaviours exist, inspiring the largest platform and digital lifestyle providers to invest massive sums in its success.
Leaders should examine their businesses and customers to identify areas where Web3 protocols can provide unique and compelling experiences, improve efficiency, and address regulatory pressures.
Through metaverse experiences, some may be able to productize virtual goods, extend their brands, or provide enterprise services. Some organisations may need to expand their networks, cloud, compute, and storage capacity, as well as add the talent required to execute on these next-generation capabilities. If metaverse interactions generate data at an exponential rate, businesses may require new solutions to operate on that data continuously and effectively, while also adhering to evolving regulatory and compliance regimes. Furthermore, businesses could use cryptocurrency and smart contracts to manage finances much more quickly, essentially automating capital and making money programmable.
Businesses may also be burdened by the complexity of so much data and the difficulty in converting it into value. As frightening as it may appear, many leading businesses could be liberated by abandoning old approaches and collaborating with partner ecosystems to build data management in a more holistic and agile manner.
To do so, business leaders will most likely need to focus more on standardisation and interoperability, which will support entire markets—and communities—beyond the existing market leaders.
Leaders should, however, carefully consider the rate of adoption and growth, particularly for immersive experiences. Some things will move quickly, while others will take their time. Business leaders should investigate how their capabilities and mission enable them to build in the short term, plan for the medium term, and prepare for the long term. Experimenting with Web3 and metaverse solutions to today’s problems can help to lay the groundwork for new business models.
There is a lot more to learn. What changes will regulation bring, and how will use cases affect networks, semiconductors, software, and consumer devices? How do you think media and entertainment will evolve? What role does artificial intelligence play in enhancing these capabilities, and what does the future of risk and cybersecurity hold?.
Finally, this major shift responds to the demands of people, business, and technology to lay the groundwork for the next phase of progress.