Disentangling blockchain, NFTs, metaverse, Web3, and Web 3.0
By Nadežda Jakubková
Now that markets are down, some have been looking at Web3 projects with incredulity, believing it was all just hype and that there’s no need to care about it anymore. That would be a mistake. Yes, we are indeed experiencing a crypto winter, and myriad projects promoting blockchain, crypto, or NFTs are long gone. But that doesn’t mean the Web3 world will simply disappear because some people have lost millions. If you want proof, just follow the money. According to Pitchbook’s latest Emerging Tech Indicator (ETI), the Web3 and Decentralized Finance (DeFi) segment received the largest investments from venture capital firms in the five quarters leading up to the recent Q3 2022.
The technologies of Web3 are too powerful and revolutionary to simply fall into oblivion. Look at the current situation from a different perspective. Thanks to the crypto winter, we get to see which projects really do work and which ones don’t. That’s why now is the best time to dive in and learn both about the tech itself and from the mistakes of others.
Web3 technology tries to piece together a solution for the issue of ownership and centralization on the internet we are seeing now.
Web3 and Web 3.0 are merely concepts, albeit one less so than the other. As many of us own (or have owned) cryptocurrencies or NFTs, we have already participated in Web3.
Web3 or Web 3.0: Does the difference really matter?
Yes and no. It depends on who you ask. Since both are more or less conceptual, it is imperative to know the difference to fully understand what the future might hold for us. Web3 and Web 3.0 are being presented as the next big steps of the current web that will fundamentally change how humans and machines interact. But each of them does so in its own way.
It is all about content — both the creation and the consumption
Web 1.0 got its name after it was gone. The term now describes the first generation of the web, the static websites that looked like printed pages on a screen. Back then, the purpose of websites was to present users with content they could read. Period. No video or audio. The World Wide Web, as it was known then, excited little user interaction with the website or other users. Organizations used websites more as brochures and places of advertisement.
Web 1.0: Users did not create content or interact with each other, but only used the web to search for information
The Web 2.0 period started with online platforms that encouraged user participation, content creation, and user interactions. In short, the web evolved from read-only to read-write.
Web 2.0: Today, users go to the web to create and consume content. The control is held by platforms that aggregate and distribute content
Sure, the Web 2.0 setup has tons of advantages, but there are also downsides that Web3 and Web 3.0 try to address. The two main elements that brought the ideas of Web3 and Web 3.0 to life are data and ownership.
Web 3.0: The semantic web
Today’s web is filled with clusters of redundant data about facts and myths, things real and unreal, both the tangible and the intangible. There is just too much of the same stuff stored here and there around the globe. Web 3.0 aims to make the web smarter, more efficient, and more effective by linking web pages, making them interoperable and thus easier to read for machines. In Web 3.0, we would have a single point of entry and machine learning would benefit from less cluttered and more structured data, which in turn would mean more relevant information for us. Overall, it means more seamless interactions on the internet.
Web3: If it is free, you are the product
In Web 2.0, the system relies on our trust in the private companies that own all user content and our faith that they will act in the best public interest. As users, we sign up for platforms we do not pay for. Yet, in turn, we lose control of our personal information — ranging from our name and address to our preferences and personal views — and believe Big Tech will not take advantage of us by monetizing every single bit of us. The idea of Web 3.0 is for each user to be the owner of the data rather than the platform. The user can decide whether or not to share the data with the platform.
Web3: Putting power in the hands of the content distributors
We can all agree that not getting paid for our labor is not okay. Just like not paying someone else for their labor is not okay. From the perspective of content creators, the popular platforms we are all subscribed to aggregate content and pose as content distributors. And they are hardly fair.
From the statistics, we know that 90% of streaming royalties on Spotify go to the top 1.4% of musicians. According to the 2022 Creator Report, 46% of full-time content creators make less than $1,000 annually, while only 12% make over $50,000. A report on influencer statistics claims that 97.5% of YouTubers do not reach the US poverty line in terms of earnings. Content creators spend hours on their craft, while only a handful receive the royalties. The web as we know it (web 2.0) allows anyone to create and publish content. However, the money it generates often ends up in the pockets of those who aggregate and distribute it. In Web3, the idea is to tokenize all digital assets, which will have one distinctive owner. The ownership can easily be confirmed using blockchain technology. Sharing personal digital assets will be done on a case-by-case basis by granting permissions to organizations.
The main idea of Web3 is to give control of data back to its owners.
Today many industry visionaries only use the term Web 3.0 and use it to also refer to what we in this article call Web3. The reason for this distinction is that there is little indication that the semantic web concept will turn into reality. All the while, blockchain, cryptocurrencies, and NFTs are experiencing growth in popularity even through this harsh crypto winter.
The online space is currently undergoing many changes, such as a big user migration from Twitter and Facebook to Mastodon as well as massive spending by big technology firms like Meta and Microsoft on metaverse development. Moreover, the blockchain technology market is predicted to grow from $12.7 billion in 2022 to $23.3 billion in 2023 (statista.com), and we hear constant stories about AI capabilities like ChatGPT (openai.com/chatgpt) or DALL-E 2 by OpenAI (openai.com/dall-e2). So, at this point, it’s safe to say that blockchain, IPFS, cryptocurrencies, NFTs, AI, and natural language processing will be a part of the next evolutionary step of the web.
The Web3’s generation of the web is supposed to be:
- Decentralized — No central platform or middleman that owns and monetizes your data. Each digital asset will have one specific owner who can decide on who will have access to the asset.
- Permissionless — Everyone will be able to participate in Web3, and no governing authority will be able to restrict access to it.
- Trustless — No third party ensures trust. It is guaranteed by cryptography and economic mechanisms.
- Interoperability — Applications will run on any device regardless of the operating system, and it will be easy to customize them.
Where does the translation industry stand in all this?
In the olden days before Web 1.0, translation companies advertised in the Yellow Pages, distributed leaflets and relied on word of mouth. With the boom of the World Wide Web, companies started to use simple websites as places of advertisement. Add email, and the industry went through a wave of globalization. LSPs started to grow and offer more languages as they were able to connect to translators from different parts of the world and cater to a global clientele. But a more connected world meant more content. Web 2.0 became a meeting place where users actively participated and collaborated through all types of communication. User-generated content pushed the industry towards AI, allowing fast and relatively accurate translations.
In the Web3 ecosystem, users will interact with decentralized platforms independently and need to be supported while doing that. Web3 is going to take advantage of artificial intelligence on a whole new level by creating a system that understands the communication between users and search results. Businesses will create more engaging methods to capture the attention of potential users, as Web3 will be more immersive and personalized. All this means more content that does not require translation but, rather, curation.
Blockchain and the translation industry
There is hype around the use of blockchain technology, yet the technology is not well understood. It is not magical; it will not solve all problems. As with all new technology, there is a tendency to want to apply it to every sector in every way imaginable (NIST: Blockchain Technology Overview, 2018).
Blockchain is the first place to focus your research if you plan on kickstarting a Web3 project because blockchain is the data layer. Any Web3 application will either (fully or partially) send data to the blockchain or read from it. Blockchain does not have one definition, it can be defined as a data-recording platform, a publicly distributed ledger, or a distributed data structure that is replicated and shared in the network. In simple terms, it is a transaction log that is cryptographically chained, so no one can change the past recorded on the blockchain. There are other features that make blockchain very unique.
- Anonymous — All network parties can cooperate without establishing a relationship because cryptography ensures a basis of trust.
- Reliable — Blockchain does not need a third party to maintain or govern the network.
- Immutable — Once a transaction is accepted by the network, it cannot be reversed or altered.
- Transparent — All network participants see the transaction log in real-time.
- Distributed — All network members have a copy of the ledger, and any changes to the ledger must go through the process defined by the network design.
- Decentralized — The governing power is not centralized under one central authority.
- Trustless — A consensus mechanism is a decision-making process that is at the heart of blockchain. It ensures that nodes make reliable decisions without mutual trust. There is not just one consensus mechanism but many to choose from when designing a blockchain.
- Secure — Interaction on a blockchain is secured by asymmetric cryptography, more specifically by a combination of public and private keys.
These features make the technology revolutionary because they allow user cooperation without the need for established institutions to facilitate the interaction. With blockchain, trust between users does not need to be enforced by institutions or prior relationships. It is inherent.
Yes, blockchain is a revolutionary technology, but it is not the ultimate answer to every single issue. A considerable amount of projects that swore to adopt blockchain and change the world hit their upper limits. Some projects were utter scams, some found the use of Web3 technologies unfeasible to achieve the project goal, and for some, Web3 technology is too limiting as it is still under development. Current market cleansing will determine which projects are both sensible and useful enough for people to engage with them.
What it isn’t
Blockchain is not Bitcoin or any other cryptocurrency variety
The common confusion about the relationship between blockchain and Bitcoin most probably stemmed from the origin of blockchain. The first blockchain was launched when Satoshi minted the first Bitcoin. The genesis block (first block) gave birth to 50 Bitcoins and was recorded on the first blockchain. Since then, the technology has been examined by cryptocurrency enthusiasts who used Bitcoin as a template and built their cryptocurrencies, such as Ethereum, Polygon, Ripple, or the infamous Dogecoin. This, however, does not mean that all cryptocurrencies work the same way.
Blockchain does have other use cases
Another common mistake is to think blockchain is only suited for cryptocurrencies. In fact, many global financial institutions (e.g., J.P. Morgan, Santander, HSBC) and technology giants (e.g., SAP, Oracle, etc.) have launched research initiatives and are deploying blockchain technology across their systems to reap its benefits. Blockchain is used by real estate companies, logistics organizations, and many others that usually do not publicize its use in their internal processes for security, PR, or other reasons.
Blockchains are used by enterprises
In the 2018 Global Blockchain Survey by Deloitte, 29% of respondents (N = 1053) claimed to participate in a blockchain consortium together with their competitors. In the same report, 43% of respondents said blockchain is critically relevant to their businesses. As for the type of blockchain, 52% focused on permissioned and 44% on private blockchain. Many organizations already use blockchain, and more are researching the technology. They might not scream it out into the world, but even if you were not aware of it, it does not make it less true. Fortune 500 companies are adopting blockchain. Even business textbooks contain case studies of companies implementing blockchain (Maerks together with IBM in 2016; Essentials of management information systems from 2021).
Blockchain is not fully anonymous
To understand the extent of anonymity on the blockchain, it is important to see a transaction on a public blockchain. The picture below is a screen from Etherscan, an application that poses as a gateway to the Ethereum blockchain. There are no names but there are identification numbers, called addresses, which might refer to either a cryptocurrency wallet or a smart contract deployed on the blockchain. Basically, the record says which address is sending what object to which address. Unless users publicly disclose their ownership of the address, regular users will have a hard time finding out who the address belongs to. However, it is not impossible to find out. Due to blockchain’s main features like immutability and distributed nature, criminal investigators are able to uncover fraudulent behavior and the people behind it.
Not all blockchains are public
The reason why we do not know about all organizations that use blockchain is that they run a private blockchain or are a part of a consortium with other companies, which is typical of logistics companies. In fact, there are four types of blockchain — public, hybrid, private, and consortium. A public blockchain is permissionless, meaning there is no governing authority and anyone can join the network. Private and consortium blockchains are permissioned blockchains, meaning they have a governing entity that decides who gets in. Hybrid blockchains are a combination of permissioned and permissionless blockchains.
Blockchain can be hacked
Each system consists of multiple components, and each component can be exploited. Blockchain uses cryptography to be secure, but it does not prevent it from being hacked. As with any system, blockchain also consists of multiple components that can be attacked. In the blockchain, the common attack vectors are user wallets, smart contracts, blockchain networks, mining pools, and attacks on transaction verification mechanisms.
Why should the language services industry care about blockchain?
Due to its unique features, blockchain technology might make it into the current tech stack of larger LSPs. For example, in the translation processes, it can make the translation workflows more transparent and auditable to corporate clients from highly regulated industries. Also, blockchain and smart contracts could enhance trust between all parties and ensure the contract’s terms are respected. Another reason why LSPs should be interested in learning more about Web3 and blockchain is perhaps more tangible: the lingo.
Non-fungible tokens (NFTs)
A lot has happened in the NFT space since the introduction of this technology. A large slice of its history has been made up of scams that cost NFTs their reputation. But there are also positive sides that are worth exploring, so let’s start by breaking down the name, non-fungible token.
A token is a digital object operating on blockchain, and it can represent anything from a photo, video, music, meme, or article to a gaming character, metaverse avatar, medical record, government ID, or even a document for translation.
Fungibility is the ability to interchange assets of the same type, e.g., money. Non-fungibility then means that the asset is unique and cannot be replaced by an asset of the same type, e.g., any artwork in the Louvre. To sum up, NFTs are unique digital objects. They cannot be split into multiple smaller units. They can be sent around the network and their ownership is recorded in a public distributed ledger (blockchain).
What it isn’t
NFTs are not the only type of tokens in use today on the web
Both fungible and non-fungible tokens have found their use across different industries. The three main token groups are payment tokens, utility tokens, and asset tokens. Payment tokens are non-unique tokens, meaning multiple tokens can exist and all have the same value. Payment tokens are cryptocurrencies. The most well-known example of a payment token is Bitcoin. Utility tokens are supposed to grant access to applications or digital services. The third type is a non-fungible token, or NFT.
NFTs and the translation industry
Depending on the business growth strategy, NFTs can be used in different ways. They can be tickets to conferences with a special benefit the owner can take advantage of even after the conference is over. The benefit that comes with the NFT ticket could make the NFT worth buying and selling after the event. A simple ticket could turn into a collectible. NFTs could also pose as discount coupons for products or services or gateways to loyalty programs like Starbucks’ NFT collectible stamps. Different NFT rarity tiers would represent different sets of benefits the NFT owner would have. Recently, we witnessed an introduction of dynamic NFTs which change based on pre-programmed rules and remain unique. It is not hard to imagine dynamic NFTs being used in the translation processes as document identifiers in the translation process that runs on blockchain technology.
The metaverse is a multidimensional digital space that promises users a place in which they can collaborate, transact, and create. It is only fair to be skeptical about the metaverse’s future and the changes it will bring to the way we interact with the internet now. It all depends on what technology companies are capable of delivering and what benefits the regular users find in the immersive digital world.
We will want to spend time in the metaverse only if the experiences in the digital world are better than or at least as good as in real life.
This is not going to happen anytime soon. So far, most of the digital worlds resemble Minecraft or older versions of The Sims at best, and hardly anyone wants to spend hours with a heavy headset talking to colleagues as a pixelated 3D avatar. It will take time for the money pumped into the technologies that make up the metaverse to deliver the desired outcome — a digital reality that will feel better than our actual reality.
The metaverse is (supposed to be) the future of the internet, as it will change how we experience and interact with it. In the metaverse vision, we will go from two-dimensional flat screens into multidimensional forms. From on the internet to in the internet. The best way to describe the metaverse is through two categories: what it is supposed to be and what is pure myth.
The vision is to have a metaverse that is:
- Immersive, as it gives the user a feeling of a changed reality.
- Interoperable, as it allows users to interact with each other across different virtual worlds.
- Persistent, as it remains operational even after the user leaves the virtual space.
- Synchronous, as it exists in parallel with reality and is a continuous experience.
- Shared with other users who can interact with the elements in the virtual space and each other in real-time.
- Composed of main technology components that include blockchain, NFTs, VR/AR, AI, and possibly cryptocurrencies.
What is pure myth
- The web as we know it will not cease to exist. We will have the option of interacting with the internet using VR headsets, but not all activities we do online are suitable for multidimensional space. The metaverse and the current web interface will coexist.
- Some visionaries claim that the metaverse is a convergence of extended reality (virtual reality or augmented reality) and cryptocurrencies. Not necessarily. On the one hand, the metaverse can be a digital space in which every object (NFT) has an owner that paid for it in cryptocurrency, and ownership is recorded on a blockchain. On the other hand, if we were to use a metaverse where all objects would belong to a centralized entity, the user would not need to buy anything hence no need for cryptocurrency. However, the concept is still largely theoretical, and there is no telling as to what extent the metaverse will be decentralized.
- The metaverse is not Facebook (or Meta). After all the affairs and controversies surrounding Facebook, they were smart to rebrand the company in a way that both reveals where they are heading and also confuses people. Associating the new name with the whole metaverse concept makes people falsely believe that Meta is the one and only metaverse. In fact, all three technology giants — Meta, Apple, and Microsoft — have made large investments in the technologies that power the metaverse, and though Apple has yet to announce its version of the digital world, it is a public secret that they have been cooking.
- There is not one single and unique metaverse. Multiple technology companies such as Microsoft, Meta, Nvidia, Robolox, Unity, and others are working on technology for interacting with the virtual worlds, and they will all coexist. Possibly even interact with each other.
- The metaverse is not only for gaming. Brands such as Gucci, Louis Vuitton, Disney, Nike, Balenciaga, and many others have expanded into the metaverse by presenting digital collectibles and building stores and hang-out places for their virtual followers.
The metaverse is not as far away as many might assume
According to a Crunchbase report, 2021 was the second most successful year for VR/AR space in the last five years. It received $3.9 billion, and Q4 alone saw $1.9 billion in investment. Facebook’s rebranding and grand plans involving the metaverse had their share in the rapid investment growth, but they were not the only reason for the sudden interest.
Businesses are finding good uses for VR/AR. According to Statista, the main areas of VR/AR applications are training, logistics support, quality control, workflow management, and design activities. The development of VR/AR hardware and software does not solely rely on the metaverse, and the segment will continue growing and improving. That will eventually lead to cheaper, smaller headsets and better VR/AR software. Though more affordable hardware helps make a stronger case for individuals to buy headsets and fully immerse themselves in the digital worlds, it is not the sole guarantee of people actually falling all over the metaverse.
The experiences in the metaverse must be equally good or better than in real life for us to actually consider spending time in the digital world — let alone spending thousands of dollars on equipment. The scary and exciting part is that we are not that far from a great immersive experience. Even our smartphones can take a head scan and make a memoji that mimics our movements in front of the camera. The latest metaverse release by Meta shows users scanning their faces which then appear in the metaverse, not as avatars but as 3D images that mimic the person’s facial expressions. With that being said, the metaverse is not going to happen in the near future, but we will gradually move some of our activities to a more immersive virtual space.
The metaverse and the translation industry
The metaverse is an immersive virtual world made of multidimensional space that is meant for users to interact in and with. As far as the industry is concerned, businesses and individuals will have another dimension for content creation and content consumption. The digital worlds expect to accommodate millions of users coming from different linguistic backgrounds and cultures. What’s more, the vision is to have a personalized metaverse for every user. One piece of the metaverse technology stack is AI, a powerful engine that, among other things, allows multilingual interactions. The translations will not be in the hands of translators. Machine translation post-editing will become crucial to metaverse development and continuous maintenance. A primary challenge businesses will face in the metaverse is localization. The interactions between users as well as users and the environment will happen in visual, audio, and video form. All of which will require translation and localization. LSPs will take on the role of cultural consultants. The visual, linguistic, and technical elements will require localization to the culture of each individual user.
In the metaverse, we will interact with users, the virtual environment, and the metaverse application. The table below shows the types of content and technology necessary for the smooth functioning of the metaverse.
Web3 is already happening and the trend of decentralization will continue until it spreads to all corners of the web. The only unknown is the speed at which this will happen. The role of both blockchains and NFTs will be to secure digital rights to each and every user in the metaverse and Web3. Our transition to the metaverse depends on the quality of the digital environment and the actual benefits it will bestow upon users. It will happen. We just have to wait until the technology giants get the combination of both right.
This report first appeared in Nimdzi Insights’ Innovators Journal.
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