Web3 also called the next Internet, is growing rapidly. However, it’s still not as robust or easy to use as traditional platforms like PayPal or Venmo. Web3 is in an early stage of development, which means there are still a lot of issues that need to be solved before they can reach their full potential. One of the first widely successful use cases of Web3 is Bitcoin, digital currencies, and digital assets.
Here are some of the biggest challenges facing Web3 and digital assets today:
Web3 comprises several new concepts and technologies, such as blockchain, 3D, and distributed computing. While technology has existed for a while, new adopters have a big learning curve. It is not as easy as becoming a web developer. However, more and more tools, frameworks, and applications are being developed to make this learning curve smoother.
Another problem is not having enough good content. The majority of the content on the Internet is written by promoters, marketers, and project owners, which may be biased.
Web3 and cryptocurrencies
Web3 is often related to Bitcoin and digital currencies. Digital currencies, digital assets, and decentralized autonomous organizations (DAO) are an integral part of Web3. In an ideal Web3 world, digital currencies are a mechanism of rewards and payments. Hence, many issues in cryptocurrencies have affected the adoption of Web3. Many businesses and serious business folks are staying away due to some of these problems, such as rug pulls, scams, and security.
You may have heard the term "rug pull" before, but it can feel vague. It refers to scams that use cryptocurrency hype to trick people into sending money. As with most scams, these are common on social media platforms like Facebook and Twitter, where there's less accountability for nefarious behavior compared to more established platforms like Reddit or Medium.
Rug pulls are tricky because they're often targeted at people who don't know much about cryptocurrency—and because it's hard for people who know their way around crypto not only to spot these traps but also avoid falling into them themselves!
Scams are a big problem in the cryptocurrency space, and they're only getting worse.
ICOs—Initial Coin Offerings are often scams that prey on investors who want to get in on the next big thing but don't understand what they're investing in.
Exchanges—Many exchanges operate outside of regulations, allowing users to deposit funds without any guarantee that those funds will be protected.
Bots and marketers - Lof to data and volumes of digital currencies are made up of bots, market makers, and marketers. Since there are not enough regulations, many bad actors are getting away with it.
Security is a major issue for cryptocurrencies and web3, and it's important to consider security as you build your dApp.
If you're creating a cryptocurrency app, use a secure contract code. If you're building a web3 app, ensure that the data your application deals with is always encrypted (including when it's being stored). It's also important to protect yourself against denial-of-service attacks by using an API like IOTA's Tangle instead of Ethereum or Bitcoin.
When it comes to the current state of crypto, the biggest challenge is volatility. The cost of bitcoin tends to fluctuate widely. If you want to use bitcoin as a currency and not just an investment opportunity, this can be a big problem because it makes it hard for users and businesses alike to predict how much things will cost if they pay in cryptocurrency.
In order for cryptocurrencies like Bitcoin to have long-term viability as a currency, there needs to be some level of stability or predictability about their value (or else people won’t feel comfortable using them).
Cryptocurrency is a difficult topic to understand, let alone use. The technology behind it is complex and new. Businesses are still figuring out how to incorporate cryptocurrency into their products and services. In some cases, it can feel like there's nothing for you to do with your crypto other than hold onto it until someone comes up with a good idea for how you can spend it in real life (or maybe just on Amazon).
We need to make the process of using cryptocurrencies as easy as possible for everyone—especially non-techies who might not be comfortable with things like private keys or public addresses.
User experience (UX)
User experience (UX) is a user's overall experience when interacting with a product. This includes how easy it is to use, the way it looks, and what the user feels when they are using it.
UI means “user interface” and refers to how the product looks and feels. For example, if you have ever used Instagram or Snapchat before, then you are probably familiar with their UI: there are pictures of friends, stories from brands that you follow, and ads every once in a while (but not too many).
UX refers to how well your product works for users. You might think that this is just about whether or not people like your app or website, but that's just one part of UX! If people don't feel comfortable using your app because it makes them think twice about pressing buttons, then that would hurt your UX score.
One of the biggest challenges facing blockchain technology is scalability, or how fast it can grow and process transactions. Bitcoin and Ethereum are struggling with this; they're already slow, expensive and not scalable enough to support IoT devices. The good news is that there are projects underway to make blockchains faster and more efficient without sacrificing security or decentralization—like the Lightning Network on Bitcoin and Plasma on Ethereum.
In order to make Web3 a reality, we need to solve the interoperability challenge.
What is interoperability? It’s how different blockchains and applications can work together seamlessly. This means that you should be able to send Ether from one Ethereum-based application to another without having to resort to using an intermediary like Coinbase or Binance — or if you do, it should be optional and convenient rather than mandatory and annoying.
Ideally, this would also work for other cryptocurrencies: You could send Bitcoin from your Coinbase wallet directly into a Lightning Network payment channel or trade ETH for EOS tokens on Radar Relay without a middleman involved in the transaction at all. And if this sounds far-fetched now, consider how far we have come just since 2017: It was commonplace only two years ago for exchanges like Poloniex (which has since been acquired) not only not support fiat currencies but also charge exorbitant fees as high as 15% per transaction when users wanted their funds sent directly there!
As you may have noticed, the world is currently looking at Web3 with some trepidation. We've got our hands full in trying to solve these problems and get there. UI/UX, scalability, bad actors and hype creators are some common challenges Web3 faces today.