Chapter 8: Web3 and Mainstream Adoption - Vision and Reality of the Next-Generation Internet

Introduction

With the success of DeFi and NFTs, a more ambitious and inclusive concept began gaining popularity—Web3. It was no longer limited to finance or art, but aimed to build a completely new, user-owned and controlled, decentralized next-generation internet. Under the inspiration of this vision, more and more traditional enterprises, financial institutions, and well-known brands began embracing blockchain technology with unprecedented depth and breadth. Blockchain was gradually moving from a marginal, niche technology circle to the center stage of mainstream society.

8.1 Web3: A Readable, Writable, and Ownable Internet

To understand Web3, we need to first review the evolution of the internet:

• Web1.0 (approximately 1990-2005): A "read-only" internet. Represented by portal websites like Yahoo and Sina. Content was created by websites, and users could only passively browse and consume information. This was a static era of unidirectional information flow.
• Web2.0 (approximately 2005-2020): A "readable and writable" internet. Represented by platforms like Facebook, Google, Twitter (now X), and Weibo. Users were no longer just content consumers, but also content creators. We could post opinions on social media and upload works to video websites. However, the core problem of this era was that all the data and content we created was owned and controlled by a few large tech platforms. Platforms controlled data distribution, captured most of the value, and users' digital identities and assets were fragmented across different "data silos."
• Web3 (2020-present): A "readable, writable, and ownable" internet. Web3's vision is to use blockchain, decentralized storage, and other technologies to return data ownership and control from platforms back to users. In this network, your digital identity, data, and assets all belong to you personally, can freely migrate between different applications, and the value you create can directly bring you returns. Blockchain is the "value layer" of this new era network.

Core Characteristics of Web3:

1. Decentralization: The network is maintained by nodes distributed globally, not controlled by a single company.
2. User Ownership: Users truly own their digital assets and data through private keys.
3. Censorship Resistance: No central authority can arbitrarily delete content or ban accounts.
4. Value Native: Value creation, distribution, and transfer are built-in network functions.

8.2 Metaverse: The Next Destination in the Digital World?

Web3's vision coincided with another concept that exploded globally in 2021—the Metaverse.

In 2021, Facebook made a high-profile announcement of its name change to "Meta" and went all-in on the metaverse, thoroughly igniting market enthusiasm for this concept. The metaverse was depicted as a persistent, immersive virtual world parallel to the real world. People could socialize, work, entertain, and create within it.

Web3 was considered the ideal technological foundation for building an open and fair metaverse.

How Does Web3 Empower the Metaverse?

• Digital Property Rights: NFTs can be used to define ownership of virtual land, avatars, and items in the metaverse. The land or equipment you purchase in a metaverse game (like The Sandbox, Decentraland) is truly your asset, which you can freely sell, rent, or use in other compatible applications.
• Economic Systems: DeFi can provide native, open financial services for the metaverse. You can make payments with cryptocurrency in the metaverse, mortgage your virtual land for loans, or invest in virtual projects.
• Identity Systems: Blockchain-based Decentralized Identity (DID) can give you a unified, self-controlled digital identity that works across different metaverse platforms without needing to re-register on each platform.

Although the final form of the metaverse remains to be explored, the combination of Web3 and the metaverse opened entirely new consumer-facing imagination space for blockchain technology applications.

8.3 Traditional Giants' Entry Tickets

If previous bull markets were mainly driven by retail investors and crypto-native funds, then starting from 2021, traditional world giants truly began entering as "participants" rather than "observers."

• Financial Giants: BlackRock, the world's largest asset management company, partnered with Coinbase to provide Bitcoin investment services to its institutional clients. J.P. Morgan opened a virtual bank in the metaverse. These all marked fundamental shifts in Wall Street's attitude toward crypto assets.
• Tech Giants: Google launched Web3 development tools and services. Microsoft acquired Activision Blizzard, which owns numerous gaming IPs, paving the way for its metaverse strategy. Traditional tech companies began viewing blockchain as an indispensable part of future technology stacks.
• Consumer Brands: Starbucks launched the NFT-based loyalty program Odyssey. Nike acquired virtual sneaker brand RTFKT and integrated Web3 features into its applications. Luxury brands like Gucci and Adidas also issued NFTs and held fashion shows in the metaverse. They viewed NFTs and Web3 as new ways to connect with younger consumers and enhance brand value.

8.4 Gradual Improvement of Regulatory Frameworks

As the industry became increasingly mainstream, regulatory frameworks worldwide began shifting from "one-size-fits-all" prohibitions toward more detailed and clear regulations.

• EU Markets in Crypto-Assets Regulation (MiCA): This was the world's first comprehensive, unified regulatory bill for crypto assets. It established clear licensing and operational rules for crypto asset issuers, exchanges, wallet service providers, etc., aiming to protect investors, maintain market integrity, and financial stability. MiCA was seen as an important milestone for the industry moving toward compliance.
• U.S. Regulatory Competition: The U.S. regulatory environment was more complex, with multiple agencies like the SEC and CFTC (Commodity Futures Trading Commission) still competing over jurisdiction for different types of crypto assets. However, the overall trend was that regulatory agencies were seeking to bring crypto markets into existing financial regulatory systems and strengthen consumer and investor protection.
• Hong Kong's Web3 Ambitions: In contrast, regions like Hong Kong actively embraced Web3, introducing a series of friendly policies to attract global cryptocurrency companies and talent, hoping to become a global virtual asset center.

The gradual clarification of regulation, while potentially increasing compliance costs in the short term, cleared obstacles for large-scale institutional investor entry in the long run—a necessary path for the industry to mature and go mainstream.

Summary

From 2021 to 2023 was a critical period for blockchain technology to move from "inside the circle" to "outside the circle." Web3's grand narrative connected different innovations like DeFi, NFTs, and the metaverse together, all pointing toward a more open, fair, and user-autonomous internet future. The successive entry of traditional giants and gradual improvement of regulatory frameworks marked that this industry was moving from a wild-growth era toward a new stage of deep integration with mainstream society. Although the road ahead remains full of challenges, the value of blockchain technology as next-generation internet infrastructure has begun gaining increasingly widespread recognition.