Ken N. Founder & CEO of AsiaTokenFund Group whose focus on Web3 Startup, incubator, accelerator ecosystem, strategy consulting and events.
Web3 is taking the world by storm, ushering in a new era of decentralized applications and offering a myriad of opportunities for traditional companies to transform their operations. Yet, I find that many still don’t really understand what Web3 is all about.
Many still think that the technology is solely about cryptocurrency and speculative investments, but it is more than that. Its underlying applications, including blockchain and non-fungible tokens (NFTs), hold immense potential to revolutionize various aspects of business.
After spending several years working in Web3, I’ve found that this technology strongly resonates with my values, and at the same time, I have discovered some excellent ways for businesses to utilize it. Below are some methods where even traditional companies can include Web3 elements in their businesses.
Enhanced Security And Transparency
One of the key advantages of Web3 technology lies in its ability to implement robust security features, which are becoming stronger every day. Blockchain, the foundational technology of Web3, offers immutable and transparent record-keeping, ensuring enhanced security and data integrity. Traditional companies can leverage blockchain to secure sensitive information, protect against data breaches, and streamline their internal processes. Examples where data can be stored on the blockchain include medical records for hospitals, examination records for schools or even shipping data and manufacturing data. Storing this data on the blockchain means that valuable data cannot be altered, modified or removed without going through multiple layers of validators.
Moreover, I believe that the transparency provided by blockchain can improve supply chain management, enabling businesses to trace and authenticate products at every stage. This increased transparency can not only enhance trust among customers but also help in combating counterfeits and fraud.
Smart Contracts And Automation
Web3 introduces the concept of smart contracts, self-executing agreements that automatically trigger actions when predefined conditions are met. By leveraging smart contracts, traditional companies can automate various business processes, reducing the need for intermediaries and minimizing human error.
Smart contracts can be utilized in areas such as procurement, supply chain management and payments, streamlining operations and improving efficiency. By automating repetitive tasks, companies can free up resources to focus on core competencies, resulting in increased productivity and cost savings.
An example of how a business might use a smart contract includes payment processing whereby the smart contract can automatically release funds to the supplier when a sensor on a shipment is triggered as crossing a certain boundary.
Assets Tokenization And New Business Models
Tokenization, a prominent feature of Web3, involves representing real-world assets or services as digital tokens on a blockchain. Traditional companies can tokenize their assets, products or services, creating new business models and unlocking liquidity. By issuing tokens, companies can engage customers in new ways such as through loyalty programs, reward systems or even fractional ownership.
Additionally, NFTs, a form of tokenization, offer unique digital assets that cannot be replicated or forged. Traditional companies can leverage NFTs to create digital collectibles, authenticate original artworks, show membership or even tokenize real estate. This can open up new revenue streams and foster direct engagement with customers, creating a sense of ownership and exclusivity.
Improved Customer Engagement
Web3 technologies can greatly enhance customer engagement for traditional companies, such as those in the video game and entertainment industry. Blockchain-based platforms enable peer-to-peer interactions, empowering customers to directly engage with companies, provide feedback and influence product development. By involving customers in decision-making processes, companies can build stronger relationships, increase brand loyalty and gain valuable insights.
NFTs, with their unique and scarce nature, offer exciting opportunities for customer engagement. Companies can create limited-edition digital assets, exclusive experiences or even gamified campaigns using NFTs. These initiatives can help you stand out from the competition, create buzz and attract a tech-savvy audience.
Some examples of global companies that have already adopted NFTs as part of their customer engagement initiatives include Coca-Cola, Adidas, Budweiser, Gucci and McDonalds.
Access To Global Markets And Decentralized Finance (DeFi)
Web3 technology goes above and beyond geographical boundaries, enabling traditional companies to tap into global markets with greater ease. By leveraging blockchain, companies can streamline cross-border transactions, reduce fees and eliminate the need for intermediaries. This opens up new opportunities for expansion and facilitates international trade.
Furthermore, the emergence of decentralized finance (DeFi) on the Web3 ecosystem provides alternative financial services and investment opportunities. Traditional companies can explore DeFi platforms to access funding, issue tokens or even create decentralized autonomous organizations (DAOs). I find that this decentralized approach to finance can offer increased accessibility, transparency and inclusivity.
For example, besides the rigid process of traditional equity financing, startups can now adopt a more seamless fundraising process via a token sale or initial coin offering (ICO) and at the same time keep their full equity to themselves. Startups going global can also possibly decentralize their workforce and clients and make payments quicker with blockchain technology.
More Global Companies Moving Into Web3
After attending several conferences and speaking to many people, it started to dawn on me how more and more global companies are adopting Web3 technologies. With even large companies like Huawei and Google pushing the adoption of Web3, I think this proves that Web3 still has a long runway, especially with large corporations supporting smaller companies and paving the way to adoption.
Web3 is not just about cryptocurrency; it represents a paradigm shift that can reshape industries across the globe. We need to look beyond speculative investments. I believe that Web3 technology, with its underlying blockchain and NFTs solutions, holds immense potential for traditional companies to transform their operations, drive innovation and unlock new growth opportunities.
By embracing the advantages of enhanced security, automation through smart contracts, tokenization, improved customer engagement and global market access, I believe you can position yourself at the forefront of this digital revolution.
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