WEB3 SPECIAL: Given the growing excitement around Web3, we have dedicated this entire page to this third major evolution of the internet. We focus in particular on a comprehensive report that Nasscom, in association with consulting and research companies Zinnov and Hashed Emergent, has just launched on India's Web3 startup landscape. And we focus on a major challenge India needs to address quickly. Millions of country’s content creators stand to benefit
If data is the new oil, then we should all be worried because the vast majority of the data produced is housed in the data centres of a handful of tech companies. But this could be disrupted by what’s called Web3, the third version of the internet that’s being built on digital technologies like blockchain.
Clawing back control of data is only the tip of the iceberg though. Web3 promises to usher in revolutionary changes in a host of industries.
A new Nasscom report on the Web3 startup ecosystem in India says the country is uniquely positioned to take advantage of this new avatar of the internet, that the ecosystem is advancing rapidly in India, and that Indian companies are poised to build the decentralised apps (Dapps) of the future.
“India’s rapid adoption of newage technologies, its growing startup ecosystem, and the large-scale digitally skilled talent potential are all the right building blocks for India to emerge as a key player in the global Web3 landscape. On the consumption side also, India has the right economic and demographic elements to become a high-growth Web3 market,” says Sangeeta Gupta, senior VP and chief strategy officer at Nasscom.
Gupta says the ‘Techade’ that we are in will be about the rapid advances in innovative use-cases and the resulting cascading positive impact at the grassroots level. “Web3 is meant to enable high levels of efficiency and innovation across the value chains. It will take more use cases to be explored to understand and unlock its full potential. This will have to be accomplished with the right sandboxing and risk management frameworks in place,” she says.
Sharat Chandra, VP of research & strategy at Earth ID, a decentralised identity platform, and co-founder of India Blockchain Forum, says there are a few reasons why India is emerging as a centre for Web3 development. “First, a major share of Web3 developers are based out of here. Initially, it used to be the US and UK. But now we have a unique advantage. Not only that, in the next 12-18 months, we will see a rapid growth of Web3 developers in India,” he says. Another advantage, he says, is on the Web3 policy front. “India is going to take over the G20 presidency soon. So, we will have a significant position in terms of shaping the Web3 and digital assets policy for the G20 collective,” he says.
The desire by Web3 enthusiasts to ensure people gain control of their own data isn’t just motivated by privacy concerns, rather it has serious monetary implications. Satheesh Kumar Paddolker, founder & CEO of Kratos Innovation Labs, a blockchain tech company that is attempting to solve problems in the content monetisation space, says content creators on platforms like stand to make a lot more money in the future for their content. “Almost 300-350 million users on Instagram are actually from India. We contribute so much content in the form of pictures and short videos, and every fifth picture you scroll up on in the platform triggers an advertisement,” he says.
That ad money now goes entirely to the social media platform. “About $47. 6 billion was earned by Instagram via advertisements and from the content contributed mostly from India,” says Paddolker. His team’s efforts to create a new blockchain-based protocol will allow content creators to retain a larger share of the ad revenue being generated using their content. This aspect of Web3 alone stands to change the economic dynamic of content monetisation in favour of India – considering we have close to 700 million active internet users.
The Nasscom report also highlights the challenges that India must overcome. The association says we are still “critically hamstrung by prohibitive regulations leading to talent and funding exodus. ” Some of these impediments include a high tax rate for gains on virtual digital asset trading and absence of regulatory clarity.
Although it's challenging to provide a rigid definition of what Web3 is, a few core principles guide its creation
Web3 is decentralised: Instead of large swathes of the internet controlled and owned by centralised entities, ownership gets distributed amongst its builders and users.
Web3 is permissionless: Everyone has equal access to participate in Web3, and no one gets excluded.
Web3 has native payments: It uses cryptocurrency for spending and sending money online instead of relying on the outdated infrastructure of banks and payment processors.
Web3 is trustless: It operates using incentives and economic mechanisms instead of relying on trusted third-parties.