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After years of serving as a hot spot for technology early adopters and innovators, Web3 is finally getting the attention it deserves. From Big Tech to traditional corporations and even government agencies, the advancement of blockchain technology is undeniable.
While this innovation remains complex, blockchain has proven to serve as a highly secure, transparent, and reliable infrastructure for countless applications. Like the US Air Force, for example tokenize parts of the supply chain and budget, FIFA even has a exclusive NFT series during the 2022 World Cup.
However, with a growing number of traditional organizations lining up to explore Web3, it’s clear the transition isn’t always an easy one. Attempts to track messages using blockchain have progressed more slowly than expected, while others have given up due to the high costs associated with developing blockchain applications from scratch.
Despite these setbacks, it’s important to note that organizations can mitigate the risks of experimenting with Web3 by structuring plans around a number of core considerations.
Related: Web 3.0 is coming, and here’s what that really means for you
Choosing the right strategy
Blockchain has numerous applications that help optimize workflows and visibility in trusted systems. Companies can use blockchain to improve internal processes such as budgeting, supply chain management, manufacturing and auditing – or they can use the technology to interact with consumers and build a fan base. These processes often require enterprise-grade solutions and are therefore usually separated from blockchain public use.
Getting started with blockchain is not always easy, several crucial decisions are needed before development can begin. For example, companies should think about what specific use cases blockchain can offer their organization, what data privacy and protection requirements they should consider (which can help determine whether a public or private blockchain is needed), what data should be stored on chain , as well as their current cloud and node infrastructure, among other decisions. These considerations should include how to scale or adapt, taking into account an organization’s future needs.
Not all infrastructures are created equal
Previously, most Web3 applications were built on Ethereum, the world’s first smart contract platform. But this dynamic has changed dramatically since 2017, with a plethora of options enabling organizations to successfully connect to the new internet era.
With access to multiple options, choosing the right infrastructure is critical to ensure compatibility with current systems and regulations, as well as future endeavors. Fortunately, unlike a few years ago, organizations can now choose a protocol that perfectly suits their needs.
This allows decision makers to choose between public, private and even hybrid blockchains. Public blockchains, such as Ethereum, often have high transaction volumes, are used by a wide variety of projects, and are popular with consumers. On the other hand, they are often quite expensive to run and lack privacy. As a result, public blockchains are best suited for consumer-facing projects such as NFT markets and gaming.
Private or permissioned blockchains, such as Hyperledger Besu, operate as closed databases, allowing only selected members to create and view transactions, smart contracts, and nodes. These systems are best suited for internal applications or pilot projects.
Hybrid blockchains, on the other hand, offer the best of both worlds. For example, Polygon is a relatively inexpensive public blockchain platform that integrates with Ethereum at a significantly lower cost, while also providing access to private environments through Polygon Edge.
Another option is to choose a solution that simplifies building with blockchain by providing exclusive tools, templates, and sandboxes to build enterprise-level blockchain applications. For example, SIMBA Chain automatically generates APIs that support private, public, or hybrid implementations. The powerful platform also supports a structured data feature that generates valuable business intelligence insights, while allowing organizations to easily migrate between supported blockchain protocols.
Perhaps most importantly, these platforms can significantly reduce development costs, shorten timelines, and use proven infrastructure, ensuring a high level of reliability and security.
Related: Web3.0: The Next Big Thing?
The road to success with Web3
Web3 has the potential to significantly improve key processes in many organizations, but it is also clear that not every company has the technical resources and talent to make an ambitious project a success.
When Meta (then Facebook) announced its plan for a digital currency called Libra, the company went from not having a blockchain connection to launching its own cryptocurrency. While hundreds of organizations have launched their own cryptocurrencies over the years, it seems that Facebook’s initiative was not given the time, resources and preparation it needed to thrive. As an unnamed government official told the Financial Timesthe company spent “years reverse engineering their project to fix all the bugs. But they could never fix being tied to Facebook. It was their original sin.”
Compared to such ill-fated projects, the US government has successfully expanded its blockchain applications across the Department of Defense (DoD). One of the United States Air Force (USAF) blockchain ventures began a Small Business Innovation Research (SBIR) contract in 2021 entrusting SIMBA Chain with developing a Web3 solution to manufacture, test and deploy 3D printed replacement parts for aircraft and other weapons on the battlefield. After this successful implementation, the USAF has slowly expanded its blockchain projects in collaboration with other US agencies, like the US space force.
Given the challenges associated with developing Web3, it is critical that organizations and governments take the time to learn the fundamentals of blockchain and weigh the opportunities and costs of each initiative. This practice is particularly important for large companies that already have a well-oiled business and that deal with a significant public interest.
Taking a step back to thoroughly consider specific solutions and their requirements, leveraging the right technology solutions to simplify the build process, and relying on experts to get the job done are the three core pillars of virtually any successful blockchain project – and thus the key to rewarding investments and a solid reputation.
Related: The Ultimate Guide to Navigating Web3 for Non-Technical Founders