If you read some of the things in the press at the moment, you could be forgiven for believing that Web3 is all about shady cryptocurrencies and people paying stupid amounts for JPEG cartoons in NFT form. Elon Musk said that Web3 “seems more marketing buzzword than reality right now”.
What I hope to do in this article is to convince you that all the underlying technologies behind Web3 are real and available today and that those technologies have the potential to transform the way we work in the media industry. Done right, it has the possibility to bring massive cost savings, greater security and network and operating resilience. Which sound like good things.
We should start with a definition of what we mean by Web3. It is a new iteration of the web, built upon some key concepts including decentralisation, blockchain and token-based economics. The underlying concepts have been a part of our digital world for decades: what we are doing now is using the ability to freely communicate digitally to bring emerging technologies into the mainstream.
Decentralisation is at the heart of everything. Today you may have all your assets in your building, where you are responsible for maintaining the locks and keys, and all the cybersecurity needed to prevent intrusions.
Or you may outsource to one of the major cloud providers. They are pretty good at maintaining security, and I would definitely not want to criticise them in that regard. But a single corporation has control over your assets, and they could turn you off or change the terms of the contract. And your log-in details are held in a central register which is a high-profile target for data breaches.
Web3 moves from data servers to the concept of nodes. Anyone – including you – can own and operate one or a number of nodes. But your data is distributed in a highly resilient manner across large numbers of these nodes, in a way which is determined by the network, and creates security through the use of a consensus protocol (I’ll explain that in a moment).
There may be tens of thousands of nodes in the environment. And the more there are, the more secure and resilient it becomes.
Blockchains are new ways of managing data: the Web3 database if you like. A blockchain is, simply, a chain of blocks of data, where each block contains a number of transactions. What makes a blockchain different, and uniquely powerful, is that in a well-architected blockchain, once written, a block cannot be changed. Ever. That is where the consensus protocols come in.
So if your data is written across some unknown but potentially large number of nodes, in a form in which it cannot be changed, then you no longer need to trust the body looking after your data, whether that is your IT manager or a cloud provider. You have a trustless environment, which is at the heart of Bitcoin and other cryptocurrencies, but is obviously of benefit to any organisation with digital assets or looking to transact in globally available, open, public marketplaces.
Which brings us back to NFTs: non-fungible tokens. The high-profile cases have been around rich people buying artwork, but an episode of a television series could be an NFT. The ownership of that NFT could be stored on a blockchain; sale of the rights to the programme could be added to the blockchain; subscription charges to view it on pay-per-view could be recorded in the blockchain, and so on along the line.
From that, you will readily see that you can use the same Web3 environment to create smart contracts which, in our case, provide access to content including programmes. Once established, these contracts are maintained by passing tokens around, entirely automatically, including the financial reckoning at every stage. Consider the infrastructure OTT or pay-TV operators could lift out of their networks in a Web3 deployment or the ease with which one-off or new customers can be brought online.
If you have read this far, you may still be asking why you should be interested in Web3. Let me point out a couple of benefits.
The cost savings are astounding. Conversations with suppliers indicate that costs for both transcoding and mass storage for media files could be less than 20 per cent of today’s cloud-based pricing.
The nature of Web3 depends upon highly secure cryptography. The result is that you have complete control over your identity and ownership of your data, and can clearly identify the people and the assets with whom, and over which, you are doing business. Both sides of the transaction are protected. With the risk from hackers and even hostile governments, this provides a new level of security.
Resilience is boosted through its distribution across large numbers of nodes. You could lose access to 40 per cent of those nodes at any time and still be able to deliver the content. How many nines resilience do you want? 15 nines if you like.
I have only had space to touch on the absolute basics of Web3, how it works and what it can do. If you want a fuller brief for media companies I have written a short e-book, which you can download at https://three-media.tv/brochures-videos/. And of course my colleagues and I at Three Media are here to help.
But I would urge you to at least start thinking about Web3 and how you can benefit from it. We all know that the media industry reacts slowly: we have been talking about IP connectivity for more than 20 years, the cloud for over a decade. Now is the time to dig deeper into how Web3 can transform your business.