We are living through what may amount to a Renaissance of new ideas, products and services due to the elaboration of blockchain technology, the development of Web 3.0 (the Internet of Value) and the ability to use the Internet to exchange and record transactions of value.
To explain: Web 1.0 is defined as the ‘read-only web,’ meaning that the first iteration of the Internet allowed users to only search for websites and read them. Websites were not interactive, nor could they do much more than display static information. In the early 2000s, Web 2.0, the ‘read-write web’, began to take shape. Users were able to interact, post reviews/testimonials and interact in real-time through social media platforms with other peers.
The evolution of smart technologies (smartphones, tablets, etc) allowed easy, immediate access to the Internet without the need for a personal computer. E-commerce boomed, disrupted traditional models of brick-and-mortar commerce, and laid the groundwork for the next phase in Internet development.
So what is Web 3.0? The concept can be traced back to the 2006 New York Times article ‘Entrepreneurs see a web guided by common sense’ by John Markoff. Who noted that the goal of Web 3.0 is to add a layer of meaning on top of the existing web that would make it less of a catalogue and more of a guide, and even provide the foundation for systems that can reason in a human? He posited that this level of artificial intelligence, with machines doing the thinking instead of simply following commands, would define the next level of development of the Internet.
More recently (as explained by the venture capital firm a16z in their publication The web3 landscape) the next wave of computing innovation − along with entirely new sectors of the economy − will be built on decentralised technology. A16z notes that decentralised technologies will offer an alternative to our current digital status quo allowing open, democratised systems which can provide the infrastructure to power tomorrow’s economy and institutions. Blockchain and other emerging technologies which define Web 3.0 offer to enhance:
Blockchain and other emerging technologies which define Web 3.0 offer to enhance:
Blockchain technology facilitates the creation of one version of the same truth, further this shared ledger, is kept in many nodes so it makes it harder to hack. As there is no centralised repository for information (honey pot) for the ledger, it helps to increase cybersecurity and reduce incidences of hacking.
Anyone, anywhere in the world with access to the Internet can access and benefit from this technology. This open access helps to enhance inclusion and participation in the next phase of the web.
Smart contracts used in decentralised finance (DeFi) do not discriminate in granting loans or allowing investment in various protocols. Smart contracts are self-executing contracts with the terms of the agreement between buyer and seller written directly into lines of code. Their use in DeFi may help to enhance equity in accessing financial services.
Blockchain and emerging technologies offer the opportunity to expedite process and remove barriers to entry which define the current legacy financial markets.
As a global profession focused on transparency and accountability, accountants hold a unique role in helping to usher in this next phase of web development. Thirty years ago, our profession could never have imagined that one day there was going to be a service like WhatsApp which enables anyone in the world to phone each other for free using voice and video. Similarly, today we may not be able to imagine the level of innovation that will result from the emerging Internet of Value – and what this may mean for our profession.
The road to Web 3.0 will not be without challenges, ethical and technical questions and the need for professional guidance and advice – it is in meeting these challenges and providing sound advice that the accountancy profession may help the world usher in this next era of the Internet evolution.
Monica Singer, Consensys South Africa lead, board member of SAICA and Accounting Blockchain Coalition, and Gabriella Kusz, CPA MBA MPP, Principal for Strategic Initiatives at the International Federation of Accountants (IFAC)