Author Tom Barrett, Founder & CEO, AltRoots
Brands better be paying attention to the massive intellectual and financial capital being invested in Web3 technologies. Web3 is the next iteration of the internet with a focus on individual digital identities and privacy. Whereas with Web2, where every business interested in ecommerce needed to establish a website, in Web3, every individual will want to establish their own digital identity. Both Web2 and Web3 will exist in parallel, but most of the growth will be occurring in Web3.
These digital identities will be the future point of communications, ecommerce and data sharing. A new ecosystem, including social networks, called metaverses, web3 browsers, and digital wallet apps will enable anonymous payments and interactions. Digital identities will be portable and compatible across the Web3 ecosystems, eventually become a universal single-sign-on for Web3.
Just as brands followed consumers to social networks such as Facebook and Twitter, brands will also want to follow consumers to metaverses.
There are over 6 million Web3 extensions! The leading Web3 domain name projects is Ethereum’s Ethereum Naming Service and the .ETH extension, with over 2 million domain names. But there are countless others, including Unstoppable Domains’ ten extensions, such as .CRYPTO and .NFT with nearly 2 million domains.
A clear difference between Web2 and Web3 is the trend for individuals and organizations in Web3 to move up from a second-level domain, for example: my company’s Web2 address is encirca.com, but on Web3, we could simply use .encirca.
Every Business interested in securing their Web3 domain name should consider getting their own extension. The leading option is the Handshake blockchain with over 6 million extensions. In addition to the Handshake project, this feature is offered by Decentraweb and Nexbloc and others.
But beware of the risks with Web3 domains. The policies and regulations for Web2 domain names have not evolved to cover Web3 domain names. Thus, the explosive growth in Web3 domains has the feel of the Wild Wild West times of the early web in the 1990’s. In particular, there are few safeguards to prevent trademark abuse and cybersquatting.
In Web2, domain names are registered with resellers such as GoDaddy. All domain name owners must agree to an acceptable use policy and are at risk of forfeiting their domain if they violate the rights of third parties. There are rules about ownership disclosure and agreeing to participate in trademark disputes. None of these rules apply yet to Web3 domains and it will be several years before any meaningful regulation emerges.
Thus, businesses must proactively secure their Web3 domain name or risk losing it forever to cybersquatters. Since Web3 domains are accessed using blockchain keys, a malicious actor could secure a business name and then destroy the keys, thereby rendering the Web3 domain unusable forever.
Another risk is that many of the blockchain projects will inevitably fail. When a blockchain fails, so also do any applications using that blockchain, including associated Web3 domain names. This failure risk is mitigated Web2 domains by the ICANN regulator but not for Web3 domains.
Finally, another significant risk is that it is possible that there are multiple occurrences of the same Web3 domain names that map to different blockchains. In Web2, there can only be one .com extension and every .com domain name, like ibm.com, is unique. But this uniqueness is not assured in Web3, leading to possible confusion and malicious activity.
Eventually, these problems will get addressed and facilitate mass adoption of Web3 domains. IN preparation, entrepreneurs and trademark owners should act now to secure their preferred Web3 address.
About the Author: Tom Barrett
Tom Barrett is Founder and CEO of AltRoots.com, the first trademark search engine for the decentralized web, and EnCirca, an ICANN-accredited domain name Registrar. Encirca was founded in 2001 and focuses on providing custom engineering services for new domain extensions, such as .BANK and .CPA. Tom serves as Chair of the Blockchain Subcommittee for the International Trademark Industry where he leads policy efforts for leveraging and protecting Intellectual Property on blockchains. Tom has engineering degrees from WPI and MIT.