By Jejhar Singh and Julian Rocero
On 16 September 2022, Advisory organized a ProNet Engagement Evening with moderator Ms. Jesley Chua, and panelists Mr. Barry Lim, Ms. Amy Zhao, and Mr. Hassan Ahmed. The theme was “Web3 and its Impact on Our Society”, where the key opinion leaders shared their insights on the future of Web3.0, its implications on their respective fields, and advice for those seeking to expand their horizons into the world of decentralised technology.
Web3.0 refers to the era of internet development where users can now read, write, and own content published online. In Web1.0, we could only read on static websites owned by various companies. Web2.0 introduced the ability to contribute content as well, such as through content creation on social media. Large corporations, however, continue to profit off this content and user interactions, and we remain hoping that they act in the public’s best interest. Web3.0 was coined by Ethereum’s co-founder Gavin Wood, and aims to shift power and ownership back to the hands of users. It is linked to the concepts of cryptocurrency and blockchain, which are particularly salient with the recent move towards decentralised infrastructure. Of course, its applications on the ground must still be fleshed out, but we believe there is value in owning your data and integrating it into your personal identity.
GovTech is indeed closely monitoring the space, and foundations are being laid to build Web3.0 applications. Back in 2018, GovTech embarked on a venture with Ngee Ann Polytechnic, now known as OpenCerts. A tamper-proof solution was needed to digitise their workflow that could simplify the authenticity verification process and efficiently provide replacements if the original copy were misplaced. Since the holder now owns their data, the downtime originally required to contact the issuer or obtain a certified true copy is no longer a concern. OpenCerts’ applications are also being expanded to other fields, such as health certificates and medical records.
Banks and financial institutions are certainly in the middle of the sea change that is happening. We can think of crypto as an investment class, financial system, and operating system. As an investment class, infrastructure has been developing to support institutional-rate access and use cases. We are also seeing more sophistication with staking services and allowing government proposals to be accessed by their end customers. At this point, it does seem to be a matter of when each bank decides to step in.
Much of the action lies in crypto as a financial system, as it is where the intersection of products lies. Web3.0 has taken all the mistakes we have made in the past hundreds of years and is ‘speed running’ finance; the result is that we are quickly seeing real use cases that are built on the blockchain. Payments and stable coins are the biggest ones currently at scale. The use of crypto addresses many customer pain points: for instance, transferring stored value from your Singaporean Grab wallet to your Malaysian one comes with a cumbersome cross-border experience, whereas there is no such stress with transferring the cryptocurrency USD Coin. The settlement rail on blockchain being geographically agnostic has helped stablecoins take root much faster and enhance experience improvement when pegged against traditional fiat transactions. Beyond this, we are all familiar with crypto’s propensity in income generation and money markets.
Naturally, consumer reception is integral to mass adoption. There may exist understanding gaps within the masses, and we should work towards closing them. For instance, the idea of decentralised data is counterintuitive as it runs contrary to how we currently store and retrieve data. Blogs, podcasts, and research articles are aplenty, and we highly encourage ambitious users to inform themselves on the field while it is early.
With the craze surrounding non-fungible tokens (NFTs) recently, many have already gone through the motions of setting up a wallet, converting fiat to crypto, getting on a different chain, interacting with their protocol, and storing their NFT. Through this, consumers have already gone through an experience of onboarding and gained exposure to the concept of defi (decentralised finance). Apart from this, users may be keen to join a DAO (decentralised autonomous organisation), trade on a test network, or even contribute to building on a chain.
Many feel that with the poor recent performance of Bitcoin (BTC) and Ethereum (ETH), the wave has passed and they are too late. However, from a macro perspective, we are still very early, and the playing ground has been leveled. Fundamentally, there should be nothing holding you back from giving it a try. You should remain open-minded and avoid becoming too used to the traditional world.
The two need not be mutually exclusive, and the growth of Web3.0 is still contingent on the reliability of Web2.0, which has served as the foundation on which information and research about the former has been circulated.
Beyond this, Web3.0 is a movement of anti-establishment, freedom of financial participation, and ‘trust lessness’. With the fiscal crisis of 2008-9, many lost faith even in storied financial institutions. Till today, even the true value of money is questioned in the face of quantitative easing and inflation. In this context, the decentralisation and community-governed principle of Web3.0 is undeniably appealing, especially against the backdrop of the current economic circumstances. We can always move into the Web3.0 space with money from the past, but with the spirit of problem-solving and drawing out the value it can offer for modern challenges.
Most of us are not blockchain maximalists and believe a natural equilibrium point exists. The defi system has witnessed much legal friction, and certainly for good reason — centralised finance has been a proven, reliable system that many are hesitant to move past. However, regulations are likely to also adapt to better gel with crypto as sentiments shift in the future. The equilibrium point should be where users have safeguards in place without hampering access too much, and regulations can help enforce this.