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After years of serving as a hot spot for early adopters and technology innovators, Web3 is finally getting the attention it deserves. From Big Tech to traditional companies and even government institutions, the advancement of blockchain technology is undeniable.
While this innovation remains complex, blockchain has shown that it can serve as a highly secure, transparent and reliable infrastructure for countless applications. For example, while the US Air Force works on tokenizing components of its supply chain and budget, FIFA even launched a unique NFT series during the 2022 World Cup.
However, as a growing number of traditional organizations line up to exploit Web3, it’s clear that the transition isn’t always easy. Efforts to track groceries 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 few basic considerations.
Related: Web 3.0 Is Coming, and Here’s What It Really Means for You
Selecting the right strategy
Blockchain has a number of applications that help streamline workflows and visibility into untrusted systems. Businesses can leverage blockchain to improve internal processes such as budgeting, supply chain management, manufacturing and auditing – or they can utilize the technology to communicate with consumers and build a fan base. These processes often require enterprise-grade solutions and are therefore often separated from the public use of the blockchain.
Getting started with blockchain is not always easy, requiring several critical decisions before development can begin. For example, companies should think about what specific use cases blockchain can offer their organization, what privacy and data protection requirements they need to consider (which can help determine whether a public or private blockchain is needed), what data needs to be stored on-chain, as well as your current cloud and node infrastructure, among other decisions. These considerations should also include how to scale or adapt to accommodate an organization’s future needs.
Not all infrastructures are the same
Previously, most Web3 applications were built on Ethereum, the world’s first smart contract platform. But that dynamic has changed dramatically since 2017, with the emergence of an abundance of options that allow organizations to successfully connect to the new internet age.
With access to multiple options, choosing the right infrastructure is critical to ensuring compatibility with current systems and regulations, as well as future endeavors. Fortunately, unlike a few years ago, organizations can now select a protocol that perfectly suits their needs.
For example, decision makers can choose between public, private and even hybrid blockchains. Public blockchains like Ethereum often feature high transaction volumes, are used by a wide variety of projects, and are popular with consumers. On the other hand, they are often very expensive to use and lack privacy. As a result, public blockchains are best suited for consumer-focused projects like NFT marketplaces and gaming.
Private or authorized blockchains like Hyperledger Besu work like closed databases, allowing only selected members to create and view transactions, smart contracts and nodes. These systems are best for in-house applications or pilot projects.
Hybrid blockchains, on the other hand, provide the best of both worlds. Polygon, for example, is a relatively inexpensive public blockchain platform that integrates with Ethereum at significantly reduced fees, as well as providing access to private environments via Polygon Edge.
Another option is to choose a solution that simplifies building with blockchain by providing unique tools, templates, and sandboxes to build enterprise-grade blockchain applications. SIMBA Chain, for example, automatically generates APIs that support private, public, or hybrid deployments. The powerful platform also supports a structured data feature that generates valuable business intelligence insights, allowing organizations to migrate between supported blockchain protocols with ease.
Perhaps most importantly, these platforms can significantly reduce development costs, shorten timelines and utilize proven infrastructure, ensuring a high level of reliability and security.
Related: Web3.0: The Next Big Thing?
The Road to Web3 Success
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 successful.
When Meta (then Facebook) announced its plan for a digital currency called Libra, the company moved away from blockchain connection to launch its own cryptocurrency. While hundreds of organizations have launched their own cryptocurrencies over the years, it appears that Facebook’s initiative has not been given the time, resources and preparation it needs to thrive. As an unnamed government official told the Financial Times, the company “spent years trying to reverse engineer their design to fix all its flaws. But they never managed to fix the fact that they were linked to Facebook. It was their original sin.”
Compared to these ill-fated projects, the US government has been successfully expanding its blockchain applications throughout the Department of Defense (DoD). One of the U.S. Air Force’s (USAF) ventures into blockchain began with a 2021 Small Business Innovation Research (SBIR) contract, which tasked SIMBA Chain with developing a Web3 solution to manufacture, test and deploy printed replacement parts. in 3D for aircraft and other weaponry on the battlefield. After this successful implementation, the USAF slowly expanded its blockchain projects in conjunction with other US agencies such as the US Space Force.
One step at a time
Given the challenges associated with Web3 development, it is critical that organizations and governments take the time to learn blockchain fundamentals and evaluate the opportunities and costs of each initiative. This practice is particularly important for large enterprises that already have very profitable operations and that deal with a high public interest.
Taking a step back to carefully consider specific solutions and their requirements, leveraging the right technology solutions to streamline the building process, and having experts to help get the job done are the three main pillars of virtually every successful blockchain project. – and therefore the key to rewarding investments and a solid reputation.
Related: The Definitive Guide to Surfing the Web3 for Non-Technical Founders