eCommerce in Web3 Era

1. Introduction

85% of American merchants believe cryptocurrency will be a well-accepted payment method in the next 5 years [1]. While enabling an alternate method of payment and accepting cryptocurrency payment as a norm by 2026, these retailers also need to understand the underlying technology changes and impact to the businesses in their respective industries. The terminologies and concepts such as cryptocurrencies, metaverse, blockchain etc. are widely used by individuals and enterprises currently. However, most of them are using it without understanding the relevance in the Web3 world or misrepresenting the concepts.

The World Wide Web or simply known as ‘the web’ is the foundation of what we know and use as internet providing infrastructural support such as the website itself and enable application services such as an email or an eCommerce website, The web has evolved over the years from Web 1.0 to Web 2.0 and now to Web3. Web 1.0 had mainly unidirectional information flow such as the MSN news services provided to users, Web 2.0 involved more user generated content, centralized databases to manage these contents, and like Web 1.0 infrastructural support to these application services. While Web 3.0 was initially envisioned as an internet capable of acting autonomously without human intervention (semantic web), and the machines being capable to acting on a knowledge-centric model by which a better user experience was created [2], Web3 as being used currently is as technological form of advancement to Web 2.0. This chapter focuses on the architecture, application and uses cases of Web3, a concept that is still evolving and focusing on decentralization. However, generally accepted in current industry is Web3 as a natural evolution of Web 2.0 and as synonymously used with Web 3.0 as a terminology. All usage of Web3 (and Web 3.0) in this chapter relates to the decentralized web and not the sematic definition of Web 3.0.

Web3 is a seismic shift compared to Web 2.0 is terms of its nature of decentralized control. Web3 uses de-centralized control and ‘trustless’ security. The de-centralization is commonly known as the blockchain technologies and instead of a central authority to provide trust and security to the services, these technologies rely on distributed consensus. All interactions or transactions are available in the public and can be verified by any of the users. While Web 2.0 relied on providing users with relevant and dynamic content such as the social networks, the focus of Web3 is on applications which have relevance in peer-to-peer networks and programmatic approach to digital ownerships. Even by the usage of peer-to-peer interactions Web3 concept of decentralization is entirely different from distributed computing. The concept of distributed computing is well-researched, and highlighted benefits such as speed of operations, ease of execution, and similar efficiency gains using multiple nodes (or peers) [2]. The major differentiating factor is the centralized control in some manner for the distributed systems while decentralization avoids this central authority. Some of the most relevant applications of Web3 include Decentralized Finance (DeFi), cryptocurrencies, Non-Fungible Tokens (NFTs), and applications or services that fall under the universe of Metaverse.

Businesses and key decision makers need a focused and simple training on Web3 and related technologies. This chapter will look at evolution of eCommerce in Web3 focusing on the elements of blockchain, NFTs, and other arenas opened with a completely decentralized commercial space. While the concepts of Metaverse is gaining momentum, the chapter will focus on the infrastructure, economical elements, and market places these concepts bring in. The evolution of businesses to meet the changing environment, opportunities decentralized eCommerce brings, the challenges, and requirement of an ecosystem will be discussed. Use-cases such as NFT marketplaces, examples of successful businesses, and upcoming areas in the metaverse/Web3 area will be discussed in depth. The chapter focuses on clearly defining what Web3 is and how it is different in terms of what it has to offer, technological aspects, its relevance to eCommerce and how business leaders and executives should think about evolving the current way of operating. Industry publications, literature review and web publications on leading and relevant websites are main sources for this research. An interview with an industry leader (CEO of a Web3 platform company) is also conducted to validate the findings.

The chapter is structured in the following format. Research methodology is briefly discussed in the next section. Web3 is defined and along with the details of most used Web3 terminologies, a basic comparison with Web 2.0 technological elements is provided in the first section of the findings. Details of early adopters and select use cases are provided in the next section. The chapter then looks at the relevance of Web3 and changes it brings to eCommerce business ecosystem. Current known challenges are detailed in the next part. The findings from this study are validated with an interview with an industry expert. The next section covers the details of this interview. Conclusion and limitations of this study are provided in the last section.

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https://www.intechopen.com/online-first/84940

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