I started digging deep into the Web3 ecosystem a little over three years ago, and nothing in the last 20 years has excited me more. The last time I had such a moment was when I was teaching and realized that social media was going to change our world forever. I think there are clear parallels to the impact that Web3 will have on our lives.
The premium crypto economy is, in a sense, a gamification of Web3 developments. However, the endgame is not just speculation. The infrastructure currently being built has the potential to unify the world’s monetary system. (Shutterstock)
Web1 was meant to open up the world’s information. Web2 brought us connectivity: people, conversations, and democratization. However, Web3 emphasizes ownership of data, transactions, and assets.
Smart contracts and decentralized systems have the potential to empower users like never before, completing the story of democratization and disintermediation. Blockchains like Solana focus on five key pillars to revolutionize global transactions: decentralization, stability, security, speed, and low transaction costs.
However, the large-scale, mainstream use of Web3 has been met with skepticism, in part due to its association with cryptocurrencies. Governments around the world are still grappling with how to regulate cryptocurrencies, leading to increased uncertainty. However, it would be a grave mistake to limit Web3 to just a cryptocurrency. The real opportunity lies in building a highly efficient global financial system that goes far beyond the speculative trading of digital assets.
As we dive into the world of cryptocurrencies today, we’ll look at a few things. Many early adopters, or “degens” (short for degenerate), dominate the field. These individuals pursue high-risk, high-reward opportunities and often trade meme coins that can yield exponential returns. Gains of 10,000% overnight aren’t unheard of, but they aren’t completely gone in a few hours either. No wonder many of them are periodically erased and find themselves completely devoid of liquidity, only to be returned by a miraculous “airdrop” of a token or another NFT.
But it’s important that they come back. Their role is important to the ecosystem.
These degeneracy fuel the rapid and often chaotic experimentation required to build the Web3 infrastructure. The builders of Web3 are creating a whole new world. Think of them as modern-day Columbus. However, rather than discovering new continents, they work to unite our world into one. Crypto coins and tokens are “gold” that rewards you for your time, effort, and risk. Who would dig if there was no gold?
The crypto economy is, in a sense, a gamification of the development of Web3. However, the endgame is not just speculation. The infrastructure currently being built has the potential to unify the world’s monetary system.
The entire crypto economy is waiting for two things. An example of mainstream adoption and real-world use. The answer is staring at us.
I do not believe that cryptocurrencies will become mainstream currencies in the traditional sense, but their role will be very important. Sure, you can buy a car or a watch with Bitcoin today, but trillions of meme coins will never become a mainstream currency. What I see happening instead (or hoping to happen) is the convergence of fiat and cryptocurrencies in a seamless, frictionless Web3 environment.
Consider the current situation. You are traveling to another country and need foreign currency. You have to go through the tedious process of contacting your bank or foreign currency dealer, filling out paperwork, paying fees, and collecting your foreign currency. When you return from your international trip, repeat the process to exchange any remaining currency.
Now imagine an alternative that leverages Web3. Log in to a decentralized exchange (DEX) with your existing cryptocurrency wallet (KYC completed) and exchange INR Central Bank Digital Currency (CBDC) to foreign equivalent within seconds and pay all government taxes. Just do the exact same transaction and you’re ready to hit the road. You can pay for everything from train rides, meals, offline purchases, etc. directly from your crypto wallet with zero and minimal costs. Once you return home, you can instantly transfer your foreign currency back to the CBDC without going through any intermediaries.
This vision is not far away. India, for example, is already leading the way with both wholesale and retail CBDCs, aiming to streamline cross-border payments. The building blocks for this future are already in place.
Smart contracts go beyond payments. This eliminates the need for intermediaries in all ownership transactions, whether real estate or stocks. All transactions will be settled in seconds and taxes will be paid in real time, making real estate registries and clearinghouses obsolete. Since the KYC process has already been completed, the government will no longer have to worry about the source of funds.
The future of finance is already here and is being built within the crypto economy. What is missing is the integration of fiat and cryptocurrencies into an established blockchain such as Solana. Once this happens, Web3 will become the foundation of a truly global and frictionless financial system.
Just as the Unified Payments Interface (UPI) revolutionized payments in India, Web3 will reshape the world’s monetary system. The infrastructure is ready. We just need to drop the term “crypto” and embrace the Web3 revolution. A global financial revolution is approaching.
Rajesh Lalwani is the CEO of Scenario Consulting. The views expressed are personal
