Forrester: Tech And Marketing Leaders Should Approach Web3 With Extreme Caution

Forrester has unveiled two new reports to demystify Web3:

The first, Web3 And Web 3.0 Are Synonymous Today — But This Wasn’t Always True, describes the interchangeability of the terms “Web3” and “Web 3.0,” despite many referring to them as the same concept. Learn more about how this shift took place — over a 23-year span.

The second, Web3 Promises A Better Online Future But Contains The Seeds Of A Dystopian Nightmare, assesses if Web3 can deliver on its promises. Forrester’s research suggests that turning Web3 theory into practice is proving difficult for two reasons.

First, today’s Web3 is dominated by speculators in cryptocurrencies and digital assets like NFTs, creating an unregulated environment in which scammer and fraudster actions derail the best of intentions.

Second, several core principles Web3 proponents advocate for aren’t practical today — and may never be. According to Forrester, these include, but are not limited to:

• “Decentralization.” (Complete decentralization is neither possible nor desirable.)

• “Trust in code, not companies.” (This means trusting (unknown) developers.)

• “Open protocols and transparent code.” (Vanishingly few people can take advantage.)

• “User-owned data and content.” (It’s easy to say but complicated to execute.)

• “User-managed identities.” (Most consumers can’t manage their own credentials.)

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"Web3 isn’t going to fix the shortcomings of today’s web."

Martha Bennett, VP, Principal Analyst, Forrester

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Forrester has unveiled two new reports to demystify Web3:

The first, Web3 And Web 3.0 Are Synonymous Today — But This Wasn’t Always True, describes the interchangeability of the terms “Web3” and “Web 3.0,” despite many referring to them as the same concept. Learn more about how this shift took place — over a 23-year span.

The second, Web3 Promises A Better Online Future But Contains The Seeds Of A Dystopian Nightmare, assesses if Web3 can deliver on its promises. Forrester’s research suggests that turning Web3 theory into practice is proving difficult for two reasons. First, today’s Web3 is dominated by speculators in cryptocurrencies and digital assets like NFTs, creating an unregulated environment in which scammer and fraudster actions derail the best of intentions. Second, several core principles Web3 proponents advocate for aren’t practical today — and may never be. According to Forrester, these include, but are not limited to:

• “Decentralization.” (Complete decentralization is neither possible nor desirable.)

• “Trust in code, not companies.” (This means trusting (unknown) developers.)

• “Open protocols and transparent code.” (Vanishingly few people can take advantage.)

• “User-owned data and content.” (It’s easy to say but complicated to execute.)

• “User-managed identities.” (Most consumers can’t manage their own credentials.)

Forrester’s report also outlines how CIOs, CMOs, and other executives should approach Web3 with extreme caution, even as firms collectively invest billions of dollars into this nascent space. When approaching Web3, executives should:

• Check whether a Web3 project is an enterprise blockchain project in disguise, given that a tendency currently exists to relabel all things blockchain as Web3.

• Understand that considerable technical challenges that remain, including maintaining privacy and confidentiality on public blockchains and preventing harassment, interconnectivity between different blockchains, and scaling and security issues at both the network and the application level.

• Be prepared to develop a governance model if one doesn’t exist, given that with public blockchain transparency, it isn’t possible to delete anything.