Founder and CEO of Apptopia, the app data insights and intelligence company, with clients including Google, Zoom, Visa and NBC.
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There’s a lot of hype around Web3 right now, but I do see some interesting shifts occurring in app development and generational-based consumer behavior due to this new set of protocols.
According to our in-house reporting, 2,883 apps marketing themselves as Web3 have been added across both Google Play and Apple’s App Store since Jan 2019, and that number is growing each month. So far, in 2022, the growth rate of Web3 apps added to the app stores is five times that of last year.
It’s clear something is happening and demands our attention.
What Is Web3?
Web 2.0 was the dominant land of the centralized data repository giants once known as FAANGs (Facebook, Amazon, Apple, Netflix and Google). Simply put, Web3 is a response to these Web 2.0 companies, and its driving force is decentralization.
Incidentally, Dr. Gavin Wood is widely acknowledged for using the term “Web 3.0” (before it became written as Web3) back in 2014. As the codesigner of the Ethereum Protocol, Wood is responsible for creating one of the earliest decentralized, open-source and distributed computing blockchain platforms, which are what make Web3 possible. These platforms gave rise to cryptocurrencies and smart contracts, which use transparency and trust while sidestepping large financial corporations and Wall Street clearing houses.
I’m not necessarily against centralized control; I like being able to search for pretty much anything on the web while knowing that I’m somewhat protected from the dark side. (Google doesn’t crawl the dark web, as it’s not a commercial proposition for ad-based commerce). I’m fine with using major financial institutions to process my online transactions. I’m not worried about being “me” on the internet. But, then again, I’m a cisgender, white, heterosexual male and the co-founder and CEO of a mobile data company, so I acknowledge that my experience is different from those who are not. Having said all that, let’s look at why many—especially members of more recent generations—prefer the decentralized world of Web3.
Next-Gen Thinkers
Web3 may represent a generational shift because its emergence was fueled by a Gen-Z and millennial backlash to centralized control of data and identity by FAANGs. For example, if you’re a creator and decide to move your brand from, say, Instagram to another social network, you’ll soon find that you don’t own any of your content, follower count or really anything that sustains you as a business.
The main appeal of Web3 is that users should have control of their own data and identity. Web3 apps never use a single sign-on mechanism (i.e., logging in using Facebook or Google IDs) because a user exists as a discreet entity in the community—one that is not tied to their offline identity.
There are also a bunch of other interesting innovations within the Web3 protocol. Many of these center on membership/ownership, with monetary rewards to recognize participation in the community. This is often play-to-earn, involving crypto payments or a brand-related reward system that isn’t cold, hard cash but functions as a currency. An emerging trend is collecting NFTs (non-fungible tokens, which are unique and transferable only by the owner) for “proof-of-attendance” at live events. Imagine this kind of loyalty-inducing gamification of an event, creating a mashup of being there (in reality) and having the virtual lanyard-style element to prove it forever.
Referring back to my earlier commentary on the five-times growth of Web3 apps: If an app doesn’t have any of these elements around data, identity, privacy and play-to-earn, it’s probably not a Web3 app.
Web3 Examples
A couple of Web3 rising stars that have hit the radar recently include Sweatcoin (fitness) and Twig (finance). Both can help us understand how the Web3 elements function on a practical level.
For example, Sweatcoin tops up a user’s “sweat wallet” in exchange for mining their raw gyroscope events (steps logged, GPS location, etc.). These “sweat coins” can then be redeemed on the app’s marketplace.
Twig launched in October 2020 as “Your Bank of Things,” and its mission is to become a next-generation financial service and banking app based on circular economy principles. Web3 apps often position themselves as part of the circular economy—promoting a healthier planet, being careful with resources and reselling pre-loved goods rather than buying fast fashion.
Mining The Web3 Opportunity
So, how can companies today find opportunities to reach younger consumers who are turned off by centralized, single sign-on control and tuning into the decentralized world of NFTs, identity-morphing, mutual ownership and privacy-protecting Web3 apps?
One word: experiment.
At my company, we put a great emphasis on our engineering and product teams getting to test, trial and pursue cool ideas. I’m sure the excitement of “the new and the interesting” drives your most thrill-seeking staffers, too. Why not redirect resources into a smart skunkworks for about 90 days, telling them to create something using the Web3 elements I’ve discussed here, and see what they come up with?
They may surprise you.
Web3 is catching on with Gen-Z and younger millennials. They’re going to expect to see more and more Web3 elements that have them in mind offered in goods and services. If your team finds a way to bring this language into your future product line, you’ll be ahead of the game.
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