Why does Web3 need Open Banking?

Background and history of the world wide web

Starting from the basics, Web3 is the term used to describe the evolving concept of the World Wide Web (WWW). It refers mainly to the concept of decentralization, blockchain technologies, and token-based economics with particular emphasis on user security and consciousness and individuality with power.

To fully understand the concept, we have to get back in time. The World Wide Web firstly was introduced in 1989 and became a reality in 1990. Since around that time to almost early 2004, people were only consuming the web as it was. The internet was, as to speak, the wild west. Users were hard to identify, and sites were static with design layouts straight from Microsoft Word. Of course,  you could not forget about funny clipart fonts slowly waving from the hero banner with unique and sophisticated text such as “welcome”. Sounds nostalgic? Of course, with big power comes great responsibility, hence It was the time of the first attempts to earn thorough speculation of fresh and unknown futuristic web technology. One example was so called the “dot-com” era, where people were selling www.com site addresses speculating concerning their future value.

After 2004 we jump into the web2, which is the current faze and the faze from which we are slowly moving forward. It was a huge breakthrough as this evolution changed completely the rules that were set in web1. From static, kinky websites, we jump into analytics, pixels, digital marketing, and e-commerce. It is considered that the internet became as to name “web as a platform” in which users have the power and ability to create content. It is also the time when social media and e-life emerge.

Web3 is the next step of the evolution of the internet and, as a term, is believed to be established by Etherium (cryptocurrency) co-founder Gavin Wood in 2014. As an idea, web3 is based on giving back to users the power of individual actions, e.g. having a currency that is operated without the supervisory of third institutions. The web3 will also contain the whole metaverse environment and NFTs. All of this has caused a lot of interest and gained a huge number of supporters, causing a “boom” of popularity in the crypto market.

What are the assumptions of web3?

Ownership is one of the main themes among enthusiasts of web3. Ownership means that not only we are the producer of the content, and interactions and generate our data like in the web2 but indeed we have the rights and the tools to actually own it. A good example of ownership is a model based on the blockchain. Data is decentralised and unitary across the web. So the only claim of ownership has a person with a specific token. There is no need for extra third parties to claim that.

Even though we are rapidly moving towards something new, which is web3 the whole case and idea of “what exactly web3” hasn’t been crystallized yet. As with every sizzling topic among businesses, it divides people. Some of them (e.g. Elon Musk) only consider it as a marketing buzzword. But to truly understand the potential of web3, we have to look much further than crypto itself. It is more likely that Web3 will impact crucial areas of our digital presence revolutionising it completely as it was with static websites years ago. The fact of buying different website URLs that was a scam back then doesn't mean useless of the websites themselves. Moreover, it was the first attempt to make the public notice the potential in that solution, which after a while, opened up by first pioneers an ocean of possibilities on which canvas we are operating to this day.

Changes that come with web3

  • ownership,
  • enriched data security,
  • scalability,
  • privacy for users,
  • combat the influence of large technology companies,
  • true paperless
  • digital identity

Why is the connection between traditional finances and decentralization crucial?

With seamless integration between traditional finances and crypto-wallets using a smart open banking scoring system, people can decide and plan their savings and expenses and get accurate prognoses based on substantial earnings. Therefore, open banking can provide a seamless and stressless customer experience (CEX) with all the safety needed during all operations.

On what exactly can crypto benefit from open banking?

  • customer safety
  • great and trustworthy UI
  • broad accessibility based on industry standards UX
  • wide range of implementation
  • first-party data that is upon user consent

Real word use-case based on existing pain points:

In the last couple of years, more and more people started being professional traders. Not only by the traditional stock but in a more dynamic and vigorous market, as is crypto. Imagine a scenario in which you are a professional who wants to change a career path and switch from wall street to “web3 street”. Sounds logical, right? Of course, you can do it without any tarriance at all, but… To have the cash flow needed to get future mortgages or incentives, you have to have I represented by the centralised currencies. Obviously, you need to do that transfers anyway, but most likely, that bigger part of your savings will be out of the crypto-stock and traditional banks.

With all of the current world affairs, the crypto market, like almost every asset-related platform, is endowed with a big uncertainty. On the other hand, open banking is well-known, highly secure and established idea that needs some energy and vitality as the crypto market has.

To have the best of both worlds businesses should look up for a better way of asset consolidation. As we can undoubtedly see, open banking could be the way to go. It is on the market for a few years and more and more companies have started to notice its leverage. It is a well-tested tool that can really shine through current uncertainties with its bright light of almost endless integrations.