Try to imagine a world in which the digital economy works in a transparent way (you have no distrust or doubts about where your data travels or who owns them), democratized (where countries and societies in situations of vulnerability can finally be included in the global financial world ) and independent (where everyone has complete autonomy over their own data, especially financial data, without depending on third parties for this). That is why it is important to understand the context of Web 3.0 in the midst of digital transformation.
Sounds like an excellent scenario to me, don’t you think?
You should know that we are facing a transformation that will increasingly come closer to the scenario I have just described above. Let’s start with some current numbers of this so-called process of digitalization of the economy:
The World Economic Forum estimates that the digital economy will reach a valuation of USD 20.8 trillion by 2025. An impressive increase of 40% compared to USD 14.5 trillion in 2021. This already shows us a promising commitment to growth. However, in order to reach a level of global financial inclusion, we need to dig a little deeper.
The democratization of Web 3.0
We are aware that Web 3.0 economy, as well as other sectors and their particular transactions and constructions, is based on a decentralized system.
As I once explained a little in my article on how Web 3 works, this means that the network belongs to everyone and at the same time to no one. You might think: “okay Andrea, you already explained this, as well as the advantages of Web 3 and its tools in our lives and in our businesses and we understand”.
Perfect, but have you ever stopped to think that everything we’re used to so far, especially when it comes to the economy, is the result of a centralized system and that we’re very comfortable with that?
How come, Andrea?
You see, there are groups of financial institutions that we trust to control and guard our money, meanwhile governments dominate the legal front and guarantee autonomy to these institutions, and finally Big Techs have complete control of our data. Apparently this whole process works for us because everyone is doing their part according to their interest, right?
What about your own interest? What about your autonomy over your own digital life?
Exactly this future I want you to start seeing.
Web 3.0: industrializing trust
Now imagine this same economic scenario in action within the third phase of the Internet (you already know that I am talking about Web 3.0). If we are able to understand that Blockchain is a fundamental infrastructure of the new internet phase that allows anyone, anywhere to have full access, control of their own data without depending on any BIgTech or institution, we are facing a completely independent mode to handle our data.
The truth is, Blockchain technology provides us with much more than we currently understand. ( Learn a little but more about using Blockchain in different areas of your traditional business, and how you can ensure transparency and accessibility of information in the latest episode of the Meta Leadership podcast).
We think a lot about the technical levels of these technologies and end up forgetting that perhaps the greatest technological revolution that Web 3 can bring to the economy is a new type of trust. And blockchains industrialize trust.
According to a recent publication by the World Economic Forum, the new digital economy is defined simply by…trust!
Anyone who has followed my work for some time knows that one of my specialties is interpersonal skills and how I am an advocate that true digital transformation is not technological, but human. So imagine my catharsis when I recently read the following excerpt:
The fundamental factor of production that a digital economy saves is trust. Blockchain is not a new tool. It is a new economic infrastructure that allows anyone, anywhere to trust the underlying facts recorded on a blockchain, including identity, ownership and promises represented in smart contracts.
Layers of institutional solutions to trust problems have evolved over perhaps thousands of years. These are deep institutional layers – rule of law, principles of democratic governance, independence from bureaucracy, etc. Then there are administrative layers containing organizational structures – the public corporation, non-profit organizations, NGOs and similar technologies of cooperation. Then there are markets – institutions that facilitate exchange between humans.”
Read the full publication from the World Economic Forum here!
Web3 – Based Digital Economy
+ democratization = + production and + creativity
There is still much to be understood, applied, sanctioned until we achieve an optimal level of both digital and financial inclusion on a global scale. Nevertheless, it is important that we see all of this to come as a great gain for everyone.
I was recently invited by Oi Soluções to cover Febraban Tech 2022, the biggest technology and innovation event in the financial sector in Latin America, and a speech by Maurício Magaldi from 11:FS fits very well here to conclude our reflection. He said the following:
“This world of proof of data (a Blockchain notable feature) makes you solve interoperability in a non-permissioned public way that everyone has access to. This combination with these technologies creates new possibilities for those who work in the creative environment and it is already a reality, but it is not well distributed. So, we need to simplify for greater adherence to this new reality”.
In other words, we can understand that with the democratization of this new digital economy phase comes the incentive and with the incentive comes a new wave of creativity and opportunities in an increasingly connected world.