Listen to the Article: What Will Web 3.0 Bring to the Financial Sectors?

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Ever since humanity entered the age of information, all of our network services and user-end device are updating in an unexpectedly speed quicker than Will Smith slapping Chris Rock at the Academy Awards. The car radio could be telling you that iPhone 14 is out of date while you are on your way from a Radioshack with a mint-in-box iPhone 11 you just bought.

Just like the idea of Web 3.0, a really popular one. What will it bring to the financial sectors?

What are Web 1.0 and 2.0?

First thing first, what we have now is generally seen as Web 2.0, while 3.0 still remains a collection of ideas, which is kind of like the metaverse.

Web 1.0 is usually seen as internet at its infancy before the year of 2005, or known as the static web. It means users may only read information on webpages and there was little interaction. By mid-1990s, most internet users were simply playing with e-mail and browsing static webpages that hardly had any places to click on.

For Web 2.0, well, it is more dynamic as we know it. In particular, with YouTube coming out in 2005, video-sharing became the hottest thing, closely followed by the rise of social media network (yes, Mark Zuckerberg says hi), as well as the smartphones after the launch of the first iPhone in 2007 and the consequent mobile internet evolution it triggered. In recent years, the internet is becoming highly interactive than ever. Short-video apps like Tik Tok are dominating everyone's smartphone around the world, in which people are creating contents, sharing contents, and leaving comments on the contents, with their mobile device.

When Will We See Web 3.0?

We can roughly summarize the three phases of internet, based on the aforementioned description of Web 1.0 and 2.0, as Reading it - Interacting with it - and Owning it. For the crypto enthusiasts, the idea of Web 3.0 mainly boasts the following technologies, one of which is de-fi, another is tokenization, and the last, blockchain. As Fazzaco discussed in an article before, "Blockchain: Are We Early or Late in Its Lifespan?​", those technologies alike are known for their strongly innate "anarchism" and "digital democratism", so the age of Web 3.0 will surely be highly decentralized.

Tokenization, on the other hand, is closely bound up with today's crypto trading, and NFTs are one of the most well-known applications. But as we have had tons of similar discussions at Fazzaco, none of it is predictable from the current regulations of cryptocurrency (take a look at the freefall of LUNA, and the collapses of numerous crypto lending firms); or whether metaverse is a bubble to pop, or the promised land in the future; or whether blockchain will ultimately become the founding bed of decentralization as we hope for. So, we have no idea when we will see Web 3.0, or are we going to see it coming at all.

What Happens When Web 3.0 Meets Fintech?

Predictably, the most prominent tech features of Web 3.0 will include smart contracts and machine learning, together with big data and the decentralized blockchain, building a more open and interconnected virtual world where the ownership of participants is better protected. In addition, the role of authorization organization or institute will be removed from financial operations to double up the transparency of P2P transactions among users.

​Therefore, we should hope for the following:

First, all digital financial services, including transfers and lending, will be more efficient (please refer to Fazzaco's article, "Survey Predicts 215% Global Growth for Embedded Finance in 5 Years​"), and that means drastic efficiency and user experience improvement for fintechs.

Second, biometrics could be adopted by Web 3.0 for safer user verification, meaning financial trading will be more secured and reliable, minimizing noncompliance risks for financial institutions. Moreover, people might just have the actual chance to get rid of the suffering from not remembering your passwords and codes to your accounts once and for all because you will be your own password.

At last, Web 3.0 will, for sure, create enormous demand and new markets, just like any other new technologies that came out since the human's technological singularity. One example, NFT trading, metaverse and the infrastructure behind them have already led to exponential growth of demands for asset transfer and payments. So, we believe this will be an obvious bullish news for the financial sectors.