How the Web3 stack will automate the business
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Web3 not only informs entire verticals and industries, but automates the core technology stack of businesses, including those once considered disruptors.
Blockchain skepticism has turned into curiosity. Those who have been on the front lines rejecting blockchain technology, yearning for viable use cases, are now accepting that they were wrong. One of them is Nigel Morris, managing partner of FinTech firm QED Investors and co-founder of Capital One. In a recent blog post, Morris admits that he has been a crypto-skeptic and that “this time two years ago, I didn’t understand it. I didn’t grasp the use cases for it and really never knew if it would garner global adoption. I was wrong.” He leans further, saying, “We believe that all companies in our portfolio will need to affirmatively develop a view of crypto and Web3 for both defensive and offensive reasons in the short term.”
In a letter to shareholders, JPMorgan CEO Jamie Dimon praised blockchain technology and DeFi, a stark contrast to his previous crypto statements. Dimon now thinks there are “many uses where a blockchain can replace or enhance contracts, data ownership, and other enhancements.” Ramsey El-Assal of Barclays Corporate & Investment Bank said at its March summit meeting:
“We see the potential of blockchain technology as similar in scale to the transformative computing changes that have been going on for decades, from mainframes to PCs, web to mobile. We further believe that the shift from “centralized” to “decentralized” technology will be the dominant theme in FinTech over the next two decades. »
Gartner estimates that blockchain could generate up to $3.1 trillion in new business value by 2030 – this could take the form of launching new products/services in B2B and B2C verticals across the globe. Currently, blockchain technologies have impacted the financial sector the most as its obvious use case is applied – enabling a more secure, transparent and efficient global economy. However, in addition to this infrastructure, blockchain technology will seep into all business functions to reform processes and operations today. For enterprises, harnessing the power of decentralized technologies by understanding how they compare to current systems will be essential.
Companies, especially FinTechs, are looking to be on the cutting edge of finance and want to offer comprehensive capabilities digitally in one place. 40% of current FinTech customers are likely to trade crypto next year (Enable advice). As the popularity of crypto continues to grow among their users, so does the need to quickly adapt their platform to be “Crypto Ready”. Companies are focusing on retaining current users by providing an optimal user experience and increasing the number of active users. To continue to be innovative leaders, they must have a marketplace for users to experience all types of financial products, including crypto.
In Web2, consumers are increasingly seeing banking-as-a-service solutions embedded in consumer goods. Target partners with digital payment service PayPal, as well as Buy Now, Pay Later service Affirm to provide point-of-sale financing. Uber Cash hosts the Uber Visa debit card through a partnership with Go2Bank. The Web3 stack combines technologies, usually connected via APIs, made up of each blockchain network and the applications and tools designed to interact with it. The Web3 stack spans multiple layers: access, use case, infrastructure, and protocol. Regardless of industry or market positioning, businesses will be able to drive innovation, revenue streams, and improved customer experience on blockchain through Web3 enablers.
Web3 only partially exists in businesses, but is already having an incredible impact and changing strategies. Cross the river bank, which just raised $620 million at a $3 billion valuation, powers integrated payments, cards, lending and crypto solutions for more than 80 leading technology partners. Cross River CEO Giles Gade’s plan is to start offering more crypto-related products and services, moving towards a crypto-first strategy. Investors are excited about the opportunity. “As Web3 continues to grow in popularity with consumers and businesses, we believe Cross River is uniquely positioned to serve as the infrastructure and interconnecting fabric between the traditional and regulated centralized financial system as it transitions slowly to a decentralized system,” said Lior Prosor, general partner and co-founder of Hanaco Ventures in the Cross River Press Release.
In many ways, this era is no different than when financial institutions and venture capitalists saw the disruptive potential in investing in FinTech innovation – from analog to digital – years before. If FinTech is the blend of technology and finance, Web3 is the fusion of crypto with the web. It’s a step-by-step function better than the current financial system we operate in today, which is one of the reasons companies are now integrating Web3 through robust bottom-up API solutions.
Here are some examples of how the Web3 stack is automating the business from our perspective:
Participation in staking
Cryptocurrencies are more than traded assets; they are used to interact with blockchain networks and their application ecosystems. Cryptocurrencies serve a variety of purposes. Most people know that cryptocurrencies can be traded on exchanges, used to pay for transactions, buy commodities, or staked to generate returns. Few people also know that you can use cryptocurrencies to vote on code changes, stake to secure a network, or function as an access key to authorized communities. Earning rewards on your digital assets shouldn’t require a team of engineers. Sometimes the economy makes sense to launch your own node and stake your crypto. Launch a node in just a few steps – no coding required.
Negotiation and custody
For businesses to adopt blockchain technologies, the ability to securely store, manage, and transact with cryptocurrencies will be a major consideration. There are integrated solutions that offer secure custody, advanced trading platforms, and top-notch services so you can manage your crypto assets in one place.
A truly data-driven business does not yet exist due to the limitation of access to data. Although data is central to business processes, access to data has remained hampered by technical inefficiencies and lack of interoperability and trust. Solutions that focus on decentralized storage or enable the indexing, querying and transaction of data will be key to unlocking new value in many business functions. This, along with the use of smart contracts, will have huge implications for secure business automation and decision-making. AML is the backbone of these key product offerings. Through analytics, businesses can connect crypto transactions to real-world entities using public blockchain attribution data, monitor risk, and investigate fraudulent activity.
Trade and payments
There is growing consumer demand for online and retail payment acceptance in digital assets. Legacy payment systems have built-in transaction costs that are also passed on to consumers. Businesses and consumers are turning to the digital asset economy as an alternative medium of exchange. Turnkey APIs for merchants, like accepting multiple cryptocurrencies or ways for consumers to buy crypto from a crypto wallet, will make the process more transparent for all parties involved.
Currently, Web3 APIs can be leveraged by enterprises to begin exploring the implementation of blockchain technologies to perform accounting functions, improve IoT connectivity, access real-time and auditable data to automate decision-making and participate in different networks. With read/write nodes, businesses can quickly access critical data and information from blockchains. A single API can help your engineering team avoid building and maintaining proprietary indexers in-house, access data faster, and reduce development time.
Businesses will need blockchain protocol specialists to truly understand how blockchain can help improve their current processes/operations and offer insight into how participating in different networks can add value to their business. In the same way that we have seen a “mobile app” version of a website, we will see a Web3 version of a Web2 platform – which will range from Google and Salesforce to Facebook and Tiktok.
A few things to consider when evaluating your Web3 stack to automate your business:
- Leverage the combined experience of native and traditional crypto finance from a third party.
- Get your crypto offerings to market faster with flexible, mature, and robust APIs and infrastructure.
- Scale securely with standardized APIs to power and own the crypto experience through a range of fully integrated and white-label solutions.
Although there is a general need for more regulatory guidance, crypto-first companies are striving to best offer their partners a regulatory-compliant framework while expanding their reach. Web3 products have generated widespread adoption and will not be dismissed this time. “As the FinTech sector continues to grow alongside the popularity of cryptocurrency and blockchain, businesses will continue to adopt digital asset technologies,” according to block search.
There will be a Web3 version of every Web2 service provider that enables businesses, and that’s just the start.
Harry Alford manages institutional sales for Coinbase Cloud.
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