Whether you’re just stepping into Web3, or you’ve been busy paving roads for a while now, there’s no denying that it’s a vast and often confusing place to be.
“We are literally rethinking everything from the ground up,” Colette Grgic, Head of Startup Ecosystem, AU & NZ for AWS said at the recent Startups in the Web3 World AWS Summit 2022. “Like the world that we’re building, the way that we’re transacting, how we’re building community, how we live, how we spend our time, where we spend our money.”
Grgic went on to emphasise the importance of building community for Web3 startups. “Building this community and this ecosystem is really what’s going to enable us to all progress faster together.”
The AWS community itself includes huge success stories like Ethereum’s leading NFT platform Immutable, blockchain-powered fintech Block Earner, and Illuvium, a video game developer built on the Ethereum blockchain with collectible NFTs across the DeFi (Decentralised Finance) metaverse.
Then there’s A Township Tale, Alta VR‘s persistent virtual world where players journey together and interact in real time. And VeVe, which allows users to purchase, sell and trade digital collectables in virtual showrooms… if you know, you know.
“This is really where we need to start thinking about how are we enabling the entire next decade of entrepreneurs to build in a completely different way than what’s ever been done before,” said Grgic.
Trusted access to data
Despite the diversity of their products, all of these startups have a very clear commonality, one that’s at the heart of Web3: they are each solving a customer problem that Web2 couldn’t solve in the way they want.
At the Summit, Brendan Myers, Seniors Solutions Architect, AWS, described it as giving “trusted, unfettered access” to data.
“This thing that customers care about is that they can have data that exists outside of a system and they can use it however they want,” Myers explained. “They can take it from one place to another and they don’t need to go through a single gatekeeper to access it.”
He used the example of why NFTs need to sit on a blockchain. “At its core, all an NFT is, is a record of ownership,” he said.
In Web2 you could put that record on a server somewhere and provide access to it, but you’re relying on that service provider to make your record always available, to not modify it and to provide the essential trusted, unfettered access. Under a Web2 system, there’s no way of guaranteeing that what you upload is what others will download.
“By moving that record of ownership to somewhere like a public blockchain, it means we don’t need to seek permission to check the authenticity of that data. We can just read it,” said Myers. “We don’t need to go and sign up for anything [to] verify that it’s authentic.”
The benefit of transparent ownership
Democratising ownership is a key benefit of Web3 for Rob Moore, CTO of digital product developer MakerX, who spoke on the Startups in the Web3 World panel at the Summit. “Transparency, public respectability, mutability – it’s a no-brainer,” he said. “I think that’s particularly interesting, like compared to like corporate hidden private things, like Excel sheets and stuff. There’s no transparency there.”
Indeed, transparency of ownership has also solved a problem that has existed in the gaming world for years. As Alex Connolly, co-founder and CTO at Immutable elaborated, “Last year, players spent more than 100 billion dollars buying items inside video games… the trouble is that players actually own none of those assets. If you want to sell the assets you acquire in a game, you’re going to struggle.”
NFTs mean that the assets users buy inside video games can be now be represented as blockchain tokens, which can be bought and sold in an international marketplace. As Connolly pointed out, NFTs have managed to get everyone to agree on a global standard for digital property and that’s actually a huge step forward.
For Moore, this touches on two more key benefits of Web3. “You can use Web3 technology to either make [existing business models] more efficient or disrupt [them] in some way,” he said. “But I think the other interesting thing is where you look at what you can do with this technology that’s different from before and do things that weren’t possible otherwise.”
A hybrid approach often works best
Myers emphasised that any startup contemplating using Web3 needs to ask themselves two important questions:
1. Does your solution need to be a Web3 solution?
“If your solution can be built in a traditional way… you’ll save yourself a lot of effort by not needing to build a Web3 application,” he said.
2. What parts need to be built on-chain and what parts can be built in a traditional way?
“One of the most common myths… is that if you’re building a Web3 application or service or system, that everything needs to be decentralised, that you’d have to go all in on-chain,” Myers explained. “But you can just deploy the key features of your product that need to live on-chain on a blockchain, and you keep the rest built in a traditional way.”
Splitting out your service or system in this way will ultimately save you time and money and get you into market quicker.
To circle back to the NFT example, in an NFT marketplace, minting the NFTs themselves and the trading mechanism both obviously have to live on chain. However, auxiliary services like user management, data and analytics or the actual generation of the art, don’t need to be built in a purely Web3 way.
Take advantage of the efficiencies
On the panel, Tim Brunette, CTO at CryptoTaxCalculator emphasised how powerful the efficiencies of stepping up to Web3 can be.
“I think this is probably something that’s pretty underrated,” he said. “But we have a new financial model, a new way of thinking that can really disrupt a lot of the waste that we have in centralised processes.”
Experimenting with what components you need to build on and off Web3 is actually remarkably easy for any startup.
“AWS has a super good free tier,” said Myers. “It always surprises me how far you can get and how much you can build without actually spending anything. If you have an idea and you need to validate it, you need to start building it out, you need hands on keyboards. I’d recommend looking at that.”
Myers is referring to AWS’ slate of startup programs, which include opportunities for free credits, business and technical support and introductions to VCs. Their resources address all stages of a startup life cycle, from how to hire the right engineers to finalising a fundraising round. And if you’re delving deeper into blockchain and ledger applications, Blockchain on AWS provides purpose-built tools to support your journey into Web3.
It’s the sophistication of these systems that remind us just how far we’ve come – and the possibilities of where we’re going next.
This article is brought to you by Startup Daily in partnership with AWS.