Internet of Things

Worldwide Webb founder explains the role interoperability will play in Web3 ecosystems

NFT Steez chats with Worldwide Webb founder Thomas Webb to discuss the future impact of interoperability in Web3 and the metaverse.

In the latest episode of NFT Steez, Thomas Webb, the founder of the interoperable avatar game Worldwide Webb, discusses the integration of interoperability in Web3 and the metaverse.

By definition, interoperability is a feature of Web3 whereby a product or system can work seamlessly across platforms with other products or services. Webb defines interoperability simply as “creating a token — a nonfungible token (NFT)” since, at its most basic level, no one can control it besides the creator.

But how does interoperability function presently in Web3, and what is its potential impact?

Executing interoperability the “right” way

When discussing how interoperable applications can create a profound impact, Webb described the creativity he has seen from NFT communities and brands.

Whether it comes from “creating a product, creating ideas or creating experiences,” Webb believes that enabling the creation of intellectual property (IP) allows users to display their loyalty and, in other ways, their achievement.

Interoperability also seems to function in tandem with token-gated experiences, according to Webb. In essence, users can get closer to authentic experiences by using the token they hold as an access pass to attend events and receive perks.

This integration enables brands to cross-collaborate, reach their users and create a proliferation of value — or, as Webb said, “infinite value.”

Interoperability will be borderless

“Interoperability could be the backbone of everything,” Webb stated when asked about the sectors that interoperability could seep into.

For Webb, the more transparent and data-driven platforms are, the more collaboration and engagement there will be across tech companies. Ultimately, Webb believes that e-commerce, creative experiences and even concepts like identity and self-sovereignty will be impacted by the concept of interoperability.

However, even with interoperability as a cornerstone of Web3, Webb did express the inevitability of risk and challenges associated with creating a standard that suits all countries.

According to Webb, the presence of centralized regulatory bodies could continue to inhibit experimentation and growth.

To hear more from the conversation, tune in and listen to the full episode of NFT Steez on Cointelegraph’s new podcasts page or on Spotify, Apple Podcasts, Google Podcasts or TuneIn.

Using blockchain technology to combat retail theft

Blockchain technology may be a solution when it comes to anti-theft measures for retailers.

The retail industry is one of the most important sectors of the United States economy. Unfortunately, the COVID-19 pandemic has left the trillion-dollar retail sector vulnerable to in-store theft.

Findings from the National Retail Federation’s 2022 Retail Security Survey show that retail losses from stolen goods increased to $94.5 billion in 2021, up from $90.8 billion in 2020. Some retailers also have to lock away certain products to prevent theft, which may lead to decreased sales due to consumers’ inability to access goods.

Retailers look toward blockchain to solve retail theft

Given these extreme measures, many innovative retailers have started looking toward technology to combat retail theft. For example, Lowe’s, an American home improvement retailer, has recently implemented a proof-of-concept called Project Unlock, which uses radio frequency identification (RFID) chips, Internet of Things sensors and blockchain technology. The solution is currently being tested in several Lowe’s stores in the United States.

Josh Shabtai, senior director of ecosystem practice at Lowe’s Innovation Labs — Lowe’s tech wing that developed Project Unlock — told Cointelegraph that Project Unlock aims to explore emerging technology to help curb theft while creating better customer experiences.

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To accomplish this, Shabtai explained that RFID chips are used to activate specific Lowes’ power tools at the point of purchase. “So if a customer steals a power tool, it won’t work,” he said.

Shabtai noted that RFID chips are a low-cost solution that many retailers use to prevent theft. According to the National Retail Federation’s 2022 Retail Security Survey, 38.6% of retailers already implement or plan to implement RFID systems. However, Shabtai explained that combining RFID systems with a blockchain network can provide retailers with a transparent, tamper-proof record to track in-store purchases. He said:

“Through Project Unlock, a unique ID is registered and assigned to each of our power tools. When that product is purchased, the RFID system activates the power tool for use. At the same time, the transaction can be viewed by anyone, since that information gets recorded to a public blockchain network.”

Mehdi Sarkeshi, lead project manager at Project Unlock, told Cointelegraph that Project Unlock is based on the Ethereum network. Sarkeshi elaborated that each product under Project Unlock is tied to a pre-minted nonfungible token (NFT), or a digital twin, that will receive a status change upon purchase.

“A product’s NFT undergoes a status change when it is either sold by Lowe’s, if it has been stolen, or if the status is unknown. All of this information is publicly visible to customers and resellers since it’s recorded on the Ethereum blockchain. We have essentially built a purchase authenticity provenance for Lowes’ power tools,” he said.

While the concept behind Project Unlock is innovative for a large retailer, David Menard, CEO of asset verification platform Real Items, told Cointelegraph that his firm has been exploring a similar solution. “Traditionally, RFID tags prevent theft, so this problem has already been solved,” he said. Given this, Menard noted that Real Items combines digital identity with physical products to ensure that stolen items can be accounted for. He said:

“If physical items are paired with digital twins, then retailers can know exactly what was stolen, from where and from which product batch. Retailers can understand this with more clarity versus information generated by RFID systems.”

According to Menard, Real Items currently has a memorandum of understanding with SmartLabel, a digital platform that generates QR codes for brands and retailers to provide consumers with detailed product information. He shared that Real Items plans to implement “digital product passports” with SmartLabel products in the future. “We view digital product passports as the foundation for storing information about a product throughout a product’s life cycle,” he said.

Menard further explained that Real Items uses the Polygon network to store product information. It’s important to point out that this model differs from Project Unlock since a blockchain network is only used here to record information about a certain item. “We use a product’s digital twin — also known as its NFT — for engagement. It can be tied to anti-theft, but it’s more about providing retailers with useful data.”

While the solutions being developed by Lowe’s Innovation Labs and Real Items could be a game-changer for retailers, the rise of the metaverse may also help curb retail theft. According to McKinsey’s “Value Creation in the Metaverse” report, by 2030, the metaverse could generate $4 trillion to $5 trillion across consumer and enterprise use cases. The report notes that this includes the retail sector.

Marjorie Hernandez, managing director of LUKSO — a digital lifestyle Web3 platform — told Cointelegraph that designer brands like Prada and Web3 marketplaces like The Dematerialised, where she is also CEO, are already using NFT redemption processes.

Hernandez explained that this allows communities to purchase a digital good in a metaverse-like environment, which can then be redeemed for a physical item in store. She said:

“This redemption process allows retailers to explore new ways to authenticate products on-chain and provide a more sustainable production process with made-to-order demand. This also creates a new and direct access channel between creators and consumers beyond point of sale.”

Hernandez believes that more retailers will explore digital identities for lifestyle goods in the coming year. “This allows brands, designers and users to finally have a transparent solution for many of the problems facing the retail industry today, like counterfeit goods and theft.”

Will retailers adopt blockchain solutions to combat theft?

Although blockchain could help solve in-store theft moving forward, retailers may be hesitant to adopt the technology for several reasons. For instance, blockchain’s association with cryptocurrency may be a pain point for enterprises. Recent events like the collapse of FTX reinforce this.

Yet, Shabtai remains optimistic, noting that Lowe’s Innovation Labs believes that it’s important to consider new technologies to better understand what is viable. “Through Project Unlock, we have proven that blockchain technology is valuable. We hope this can serve as a proof point for other retailers considering a similar solution,” he remarked. Shabtai added that Lowe’s Innovation Labs plans to evolve its solution beyond power tools moving forward.

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While notable, Sarkeshi pointed out that it may be challenging for consumers to understand the value of using blockchain to record transactions. “For instance, if I’m a customer buying a second-hand product, why should I care if it was stolen,” he said. Given this, Sarkeshi believes that a shift in customer mindset must occur for such a solution to be entirely successful. He said:

“It’s a culture building challenge. Some customers will initially not feel good about buying a stolen product, but we need this to resonate across the board. We want customers to know that when a product is stolen, everyone across the supply chain gets hurt. Building that culture may be challenging, but I believe this will happen in the long term.”

Unique Web3 tech primed to democratize Internet of Things industry

W3bstream, a MachineFi project, is using Web3 technology to decentralize the Internet of Things.

We live in houses that are capable of monitoring and controlling a wide range of internal processes — from heating and cooling to security and surveillance mechanisms. Our cars keep track of external conditions and are well on their way to driving themselves. Our phones are constantly gathering valuable data and recording our activities — both on our devices and in real life.

Smart homes, smart cars, smartphones — all of these and much more are part of the rapidly expanding Internet of Things (IoT), which serves as the foundation of the machine economy. The IoT is what connects all of our smart devices and machines, and while the industry has produced remarkable achievements that have improved lives around the world, it is also an industry that has been centralized for decades.

That centralization has left smart device users with little control over their personal data. W3bstream, a leading project in MachineFi — the decentralized machine economy — has the potential to challenge the current IoT monopoly, benefitting billions of smart device users worldwide.

The booming IoT industry

Mckinsey predicts the IoT is on pace to add anywhere from $5.5 to $12.6 trillion to the global economy by 2030. A huge chunk of that growth is attributed to IoT solutions in the retail, home and health sectors. There are many potential benefits to enhanced connectivity among our devices and the things we interact with, from health and safety improvements to time-saving advantages.

However, for all of the promise of the IoT, the proliferation of smart objects and the increasingly important role they play in our lives is raising significant questions tied to privacy concerns and the dangers of concentrated power.

One of the reasons that the IoT industry has proven to be so profitable is the increasing value of consumer data. While the IoT has brought improvements to human safety, longevity and quality of life, there are also downsides due to the sacrifices that come at the price of convenience. The privacy debate has been roiling for some time now in the tech sector, as a number of companies have gone to great lengths to acquire user data. The intrusiveness of these companies and the subsequent liberties they have taken in profiting off of the data they collect has drawn the ire of consumers across the world.

Despite the concerns that many share regarding privacy overreach, given how thoroughly embedded into our lives services provided by companies like Google and Amazon are, there has been a general sense that little can be done to change the tide and give users control over their data. However, there is an alternative approach to IoT development that has the potential to recalibrate the industry’s power dynamics.

W3bstream and the fight for the future of the IoT

MachineFi Lab, the core developer of the IoTeX Network — a project that is working to merge blockchain technology with the IoT — has recently announced the rollout of a new product called W3bstream. W3bstream is a chain-agnostic system that has been developed to disrupt the monopoly that has been formed around user data and smart devices.

The project has taken a leading role in the nascent MachineFi industry, which has emerged as more efforts are being made to decentralize the machine economy. Key to MachineFi is infusing the principles of Web3 into the IoT, so that users will be able to maintain control over their data and protect their privacy, while still enjoying the benefits of the vast interconnected network of devices and services.

Beyond just protecting the end user, W3bstream will give users the option to profit from their own data, reshaping the current state of the industry. The key to being able to do this is the platform’s decentralized approach, which takes the ownership possibilities opened up by blockchain technology and applies it to the full spectrum of the IoT.

The strong technological underpinnings of the platform allow it to penetrate into all industries that use and create smart devices. The full range of devices that can operate on W3bstream include sensors, smart TVs, smart homes, self-driving automobiles and even smart cities. Via the platform, Web3 tech can be implemented by connectivity services, supply chain operators, healthcare providers, manufacturing companies and environmental protection agencies, among many others.

The benefits without the compromises

The incentive to introduce Web3 paradigms to these sectors lies in the benefits it will bring to billions of people. Just like in the current iteration of the IoT, people will be able to use their devices to monitor and improve key activities and aspects of their lives. However, in the Web3 model, people also stand to get rewarded for participating in the collection of data, all while being able to maintain their privacy.

The way this works is through data pools to which participants can contribute without having to reveal their names or any other information they wish to remain private. In the health sector, this could greatly advance research efforts without participants having to cede unnecessary personal information to third parties that may use the information to profit. Instead, the process would be much more democratic and streamlined to focus on scientific advancement and communal benefit rather than perpetuating revenue flows for corporations that have accumulated sprawling control over various facets of modern life.

In addition to the advantages this kind of platform presents for end users, W3bstream is also remarkable for the ease it has introduced into the process of application building. MachineFi Lab’s one-of-a-kind data compute infrastructure enables developers, smart device makers, and businesses to build Web3 applications in less than 50% of the time — and at half the price — it takes to build similar applications with other comparable software.

Currently, there are about 42 billion smart devices in use around the world. As substantial a figure as that is, this is still just the beginning of the machine economy; by 2025, people will own about 75 billion smart devices and machines. The more developed this industry becomes, the more difficult it is going to be to make substantial changes. W3bstream and other MachineFi projects are trying to lay the foundation for a democratized IoT now while it is still possible.

How adoption of a decentralized internet can improve digital ownership

Web2 lacks ownership, but Web3 will provide users more control over platforms, websites and protocols.

Known as Web2, the current iteration of the internet emphasizes creating and distributing user-generated content. Websites like YouTube, social media apps like Instagram and Twitter, news sites, personal blogs and more make up a large part of the internet.

Web2 is a step up from Web1, which was mainly a read-only web version filled with simple static websites. Web3 aims to bring decentralization and token-based economies to the internet.

Web2 versus Web3

The development of several different web protocols at the beginning of the twenty-first century made it possible for programs and content to be linked via read-and-write interactions. Web2, in its present form, enables users to consume material created by other users and create their own content. Readers are probably best acquainted Web2. As a result of Web2’s autonomy in content production, the age of social networks was ushered in, and with it came the proliferation of blogs, online forums and online markets.

However, rent-seeking centralized corporations have taken advantage of this free flow of information to monetize user data and habits, despite the undeniable fact that Web2 has offered users significant advantages. The demand for a web that developers and users control has increased, primarily due to a breakdown of trust, user exploitation and data control.

The goal of Web3 is to encourage open services driven by decentralized applications (DApps) rather than centralized apps controlled by tech behemoths. Users of Web3 can connect to applications and protocols directly, removing the need for third-party intermediaries in the process. Web3 has been described as the “read/write/own” version of the internet. Open services built on Web3 encourage permissionless entrance, maximize value and ensure verifiability. These services are much more dependable, equitable and ethical.

Users are not required to pay recurring fees or provide personal information to use technological platforms; instead, they are invited to participate in the governance and operation of the protocols. Participants are stakeholders in the network, rather than just consumers or goods abused to satisfy economic demands.

Tokens or coins are used in this setting to symbolize accessibility, governance and ownership of decentralized networks. In Web2, the user plays the role of the product; in Web3, they take on the role of the owner.

Úrsula O’Kuinghttons, director of communications and partnerships at the Web3 Foundation, an organization that supports blockchain and Web3, told Cointelegraph:

“There are two primary considerations when we think of ownership in Web3. The first concerns how organizations are managed. The existing, flawed status quo puts ownership in the hands of the various powerful individuals fronting up organizations, institutions, and corporate entities.”

O’Kuinghttons continued, “A properly decentralized web ensures ownership of these monolithic structures is stripped of such hierarchy. It means networks and communities have much more power in governance and decision-making. It also means rewards are shared more fairly. The engineers are building Web3 to embrace the power of a peer-to-peer network to create lasting and effective solutions with blockchain.”

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“The other key issue surrounds sovereign ownership of data. Web3 seeks to safeguard the legitimate claims of individuals to have full control of their data and put privacy at the forefront of their online lives. This goal can be reached through zero-knowledge proof protocols, encryption, and private keys.”

How Web3 will bring ownership to users

Web3 will bring ownership to users in many ways, one of them being the ability to host websites that cannot be censored or taken down. The current web hosting system relies mainly on servers controlled by centralized organizations. These organizations can take websites down if they feel they have a good enough reason to do so.

Decentralized file storage networks allow people to build censorship-free websites using the InterPlanetary File System (IPFS) protocol. Instead of using a central server, with IPFS, every individual acts as a server by caching a piece of data from the site. Once another user visits that site, the data is loaded from one of the cached users. So, for example, if a million users visit a site to view a photo, the photo file can be loaded from any of those million hosts when the next person visits the site.

This process removes the need for a centralized entity, as the burden of serving the website is distributed between the users who have accessed it. This is possible because data files have a unique cryptographic hash as an address instead of a user-generated name like red-car.png. Once the file is requested, the unique hash is sought and recovered from the cache.

Organizations like the Web3 Foundation are providing support for the development of technologies and applications in the field of decentralized web software protocols. They provide grants to teams across the world who are helping to build out the Web3 ecosystem. The foundation currently supports 415 projects in the Polkadot ecosystem with its grant program. In addition, over 1,000 grant applications have been submitted.

Decentralized autonomous organizations (DAOs) also play a big part in Web3 infrastructure. The next wave of user adoption in Web3 ownership and accessibility will be driven by community-owned and governed DAOs, with nonfungible tokens (NFTs) helping to drive this adoption.

DAOs are self-governing groups whose decisions are carried out using smart contracts on the blockchain. DAOs eliminate the need for a governing body or single point of authority by bringing together individuals with common interests and talents. Furthermore, because of the blockchain’s distributed structure, all decisions and transactions can be viewed and confirmed by everyone.

DAOs may be used to facilitate collective ownership in the context of NFTs. Members make decisions by voting at regular intervals, and access to built-in treasuries needs member approval. The escalating cost of NFTs has unintentionally put many collections out of reach for individual customers. DAOs can enable users to share the cost and ownership of individual NFTs to level the playing field and foster the decentralized ethos of accessibility and inclusion.

DAOs provide a governance structure for Web3 that enhances involvement while reducing the chance of corruption or censorship. They may be found in several situations ranging from social media to play-to-earn games. The popularity of DAOs will spread to decentralized finance (DeFi), NFT collection and philanthropic organizations as DAOs gain traction. Furthermore, unlike hierarchical organizations, DAOs allow immediate decision-making once all members agree.

Nonprofits could greatly benefit from the DAO concept. Administrative expenditures and resource distribution hesitation are unlikely to offset the benefit of a charity’s outstanding work. Moreover, using DAOs enables the effective and timely distribution of funds to their intended beneficiaries. Consequently, NGOs may have a stronger influence on their end purposes.

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DAOs may also be utilized as a direct avenue for investment and quick DeFi adoption. DAO-conducted peer-to-peer crypto transactions are inexpensive, practically instant and unregulated by bank laws. As a result, members who take out loans or engage in other activities may earn better returns than they would have received at a traditional bank. This industry’s tremendous development seems to have no end.

Using NFTs and DAOs to buy and store these digital assets expands the creator economy, which is especially significant, given the present generation’s obsession with social media and content creation. Because the value of a creator’s work is inextricably related to their reputation, following and establishment, the creators gain. DAOs, like many large organizations and businesses, will most certainly enable user access to Web3 in the future.