Exploring the Role of Web 3.0 and Crypto Services in India
Web 3.0, also known as the decentralized web, is the next generation of the internet that is designed to be more open, secure, and user-controlled than the current Web 2.0. It is built on blockchain technology and offers a decentralized network where users can interact with each other and with applications without relying on centralized servers or intermediaries. Web 3.0 has the potential to revolutionize the way we access and share information, conduct business, and even govern society.
A bird’s eye on the evolution of the web
The birth of the World Wide Web by Tim Berners-Lee in 1989 was the beginning of the Information Age. The first implementation of the web, called the Web 1.0 or the “read-only web,” allowed users to search for information and read it, but there was very little in the way of user interaction or content contribution. The early web had millions of static websites, which mushroomed during the dot-com boom. The lack of active interaction of common users with the web led to the birth of Web 2.0, which allowed users to contribute content and interact with other web users. This era empowered the common user with new concepts like blogs, social media, and video streaming. Web 3.0, also known as the semantic executing web, extends the Web 2.0 concept by combining semantic mark up and web services, promising applications that can speak to each other directly and broader searches for information through simpler interfaces.
Semantic markup refers to the communication gap between human web users and computerized applications. One of the largest organizational challenges of presenting information on the web was that web applications weren’t able to provide context to data, and, therefore, didn’t really understand what was relevant and what was not. Web 3.0, by combining a semantic mark up and web services, promises the potential for applications that can speak to each other directly, and for broader searches for information through simpler interfaces. The attributes that are going to be a part of Web 3.0 include contextual search, tailor-made search, personalized search, the evolution of 3D web, and deductive reasoning. Web 4.0, also known as the "Mobile Web," is an alternate version of what we already have. It connects all devices in the real and virtual world in real-time. As the global crypto ecosystem has grown tremendously in the past few years, Web 4.0 will bring new opportunities for block chain and crypto currencies, and the way they interact with the web.
The future of Web 3.0 and crypto in India
The crypto industry has been rapidly growing over the past few years and currently boasts over 200 million users worldwide, with around 10% of them hailing from India. Despite regulatory uncertainty, Indian investors have shown significant interest in the space, and Web 3.0-based businesses are starting to offer services that cater to the global ecosystem. In this we'll explore the role that Web 3.0 and crypto services can play in India and how we must prepare for this.
One of the key challenges facing the Indian crypto ecosystem is the need for timely regulations that will create a vibrant and transparent ecosystem. The government has already taken significant steps towards this, such as the TDS on sales and the recent anti-money laundering provisions under PMLA. However, some compliant Indian exchanges have experienced a significant drop in volumes since July 2022 as investors migrated to using non-compliant global exchanges for their trades. To address this, Indian businesses that operate with local offices should be encouraged to become the partner of choice for the government and the "platform of trust" for investors.
Blockchain Technology and its Role in Crypto and Web 3.0 Services
Blockchain technology is the core technology behind crypto and Web 3.0 and is already implemented across industries. It is also touted as the base of the next big Metaverse trend. In this context, crypto and Web 3.0 services originating from Indian businesses can serve a multitude of use cases globally. This can attract foreign investments into India and create new jobs that will serve the economy and the youth well. However, this needs a consistent approach in terms of education and incentivizing businesses. We must prepare our youth for 5-10 years ahead.
The eRupee and its Potential
Another key benefit of crypto is the ability to enhance payments infrastructure in terms of time and cost. Cross-border payments via crypto have already given a boost to some countries. India's retail Central Bank Digital Currency CBDC (CBDC-R) started its pilot stage in December 2022, and the eRupee has several benefits, including faster and cheaper transactions, improved financial inclusion, and reduced reliance on cash. It is also expected to make it easier for the government to track transactions and crack down on money laundering.
The eRupee can naturally become the de facto onramp for crypto and Web 3.0 transactions, allowing investors to transact with crypto and NFTs only via eRupee. This can also be extended to sectors such as online gaming. With the rise of blockchain technology, we expect the e-Rupee to be integrated into decentralized applications, making it an integral part of the Web 3.0 ecosystem in the future.
While blockchain technology has the potential to revolutionize many industries, it is still a relatively new and complex technology that requires significant expertise to navigate. Consumer awareness and educational programs in various languages can help bridge this gap. Additionally, the inherent volatility in crypto asset prices needs proper risk planning by individuals and companies. While we anticipate the asset class to mature over time and decline in volatility, it is still years away.
The adoption and success of the eRupee is dependent on its use cases and regulatory clarity that accompanies its usage. The move towards transparency will keep the ecosystem clean and trustable. The future remains bright for the crypto and Web 3.0 ecosystem in India with the right interventions. We must act soon to prepare for this exciting and rapidly evolving industry.
The emergence of Web 3.0 and the growth of the crypto industry offer immense opportunities for India's economy and its youth. However, to fully realize these benefits, there is a need for timely and transparent regulations, as well as education programs that can bridge the gap in expertise and risk planning. The eRupee, with its potential to become the de fact on ramp for crypto transactions, can play a pivotal role in shaping the future of the Indian crypto ecosystem. With the right interventions, India can position itself as a leader in this rapidly evolving industry and attract foreign investments while serving the needs of its citizens. It's time to act now and prepare for the exciting future ahead.
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