Web3 asset management offers a cutting-edge platform for decentralized asset management on the blockchain. Over the past half-century, the technologies that businesses rely on to create and provide their products and services have undergone significant transformations. The integration of computing in the 60s and 70s led to the automation of various processes including payroll, billing, procurement, accounting, inventory management, and factory production.
The rise of personal computers, private networks, and the internet from the 1980s to the early 2000s led to a significant change in the way white-collar work was done. This was made possible by the use of commercial off-the-shelf systems such as document and content management, office automation networks, email, intranets, and enterprise resource management. The advent of distributed processing and cloud-based development platforms in the mid-2000s transformed technology into a service. Businesses could now pay for infrastructure and application development on an as-needed basis, aided by a growing array of artificial intelligence tools and big data processing capabilities. This shift led to the creation of platform-based ecosystems driven by powerful network effects and behavioural algorithms, which now underpin business delivery.
Understanding the significant impact that each era of technological innovation has had on commerce and business operations is crucial as we are about to experience a new wave of technological advancements that could potentially be the most disruptive yet.
Web3 vs Web 2.0
Web 2.0 is a defining feature of the current era, representing a significant advancement from the first generation of web-based offerings in the late 1990s and early 2000s. Unlike its predecessor, Web 2.0 moved away from static websites that offered a hierarchical set of pages connected by a menu and page links, to dynamic platforms that are able to adapt their content to the individual user. It allows users to arrange their own services, post and interact with content, build their own networks, and participate in communities. Web 2.0 has integrated itself into society and our daily lives as we use these tech-driven networks for an increasing number of personal and business tasks. The ability to create, share and access information and services in real-time has transformed the way we communicate, collaborate and conduct business.
However, the ecosystems that drive current engagement are commercial entities that constantly balance the benefits their network can provide to users with the potential profits they can generate for their organization and shareholders. The pursuit of profit has led these companies to use their users’ data in ways that raise privacy concerns, charge high fees for the services they offer, and often only share a small portion of these profits with the creators or suppliers of the services. These companies have also developed algorithms that create a strong user loyalty to the platform, which can sometimes lead to negative crowd behaviors. These issues have led to growing concerns over the concentration of power and control in the hands of a few large tech companies, as well as the need for more transparent and equitable business models.
Web3, the next evolution of the internet, aims to address these issues by leveraging blockchain technology to create decentralized, autonomous systems that are transparent, secure and owned by the users. The use of blockchain technology allows for the creation of a decentralized digital economy where users have full control over their data and can access and contribute to a wide range of services and products without the need for intermediaries. Web3 also aims to create a more inclusive and equitable digital economy, where creators and suppliers of services can be fairly compensated for their contributions.
Web 2.0 has had a significant impact on our lives and the way we interact and conduct business. However, it has also raised concerns over privacy, data ownership, and the concentration of power in the hands of a few large companies. Web3, the next evolution of the internet, aims to address these issues by creating decentralized, autonomous systems that are transparent, secure and owned by the users. It aims to create a more inclusive and equitable digital economy, where creators and suppliers of services can be fairly compensated for their contributions.
Web3 Asset Management: The Future of the Internet
Web3 asset management presents a distinct alternative, it presents the possibility of commercial protocols that can provide goods and services in a peer-to-peer fashion, directly accessible to any user with an internet connection. These protocols utilize smart contracts to enable transactions, which are self-executing codes that are programmed to perform a specific task when a predetermined trigger is activated. Smart contracts can be used for various tasks, such as buying, selling, or issuing assets, borrowing or lending money, playing games, participating in exclusive communities, purchasing virtual or physical land rights, and more.
To facilitate this new peer-to-peer ecosystem, Web3 adopts a distinctive method for transactions. In Web2, payments are made using traditional fiat currency that are processed by third-party intermediaries using government-controlled banking systems, which add additional costs and delay to each interaction. In contrast, Web3 utilizes a native coin for payments, which is awarded to independent verifiers that utilize consensus mechanisms to validate transactions which are then instantly recorded and executed on a blockchain, a shared ledger that is distributed across all participating nodes and is accessible to any participant through a blockchain browser.
Web3 offers a different approach to facilitating transactions and building ecosystems for goods and services. In contrast to Web2, where payments are made using fiat currency processed by a third-party and subject to added costs and time delays, Web3 uses a native coin for payment, and independent verifiers are awarded shares for validating transactions recorded on a decentralized blockchain. Additionally, in Web2.0, user participation is typically acknowledged through ratings or loyalty points with minimal benefits, whereas in Web3 asset management, participation is recognized as a valuable asset and individuals can earn or purchase tokens that give them ownership rights in the commercial protocols they frequently use, encouraging them to actively govern and vote on network decisions, reducing potential conflicts of interest.
The Impact on Asset and Wealth Management in the Future
The utilization of smart contracts in Web3 asset management and commercial protocols has the potential to revolutionize the way that assets and wealth are managed in the future. These self-executing codes not only facilitate transactions, but also have the ability to administer copyright-related protections, transfer property rights, establish and exchange digital identities, and offer exclusive access to unique products or services. Smart contracts can be linked to assets and embedded into digital tokens, allowing for automatic transfer of rights to the new owner when the token is sold. This opens up new possibilities for the management and administration of assets and wealth.
The potential for smart contracts in Web3 to link assets with digital tokens opens up a new dimension for portfolios in the future. Instead of just delivering risk-adjusted returns, portfolios can offer actual utility to the investor’s life. This includes the ability to manage and earn income from the sale of personal data, access to communities and services that align with personal interests, and new types of cash flows. With the use of smart contracts, investors can have greater transparency, security and automation in the management of their assets.
Asset management and wealth advising will need to become highly personalized and involve a closer collaboration between asset managers, wealth advisors, and clients. This could lead to a more powerful re-imagining of active management, resulting in increased engagement and stickiness for investors. The use of smart contracts and blockchain technology will enable more efficient and cost-effective investment processes, as well as provide a new level of security and transparency. This can help investors to make more informed decisions and better align their investments with their personal goals and values.