Potential risks posed by Web3 innovations

• Using the Metaverse in education has broadened the scope of practical learning for medical students, flight training and other jobs.
• AI can create masterpieces simply by analyzing previous work causing significant controversial options in the art world.
• If implemented poorly, a web3 social media platform can render the right of removal obsolete.

We here at Web3Africa.news have showcased the vast potential of a blockchain network through information distribution and practical applications. Africa’s web3 community has ushered in a new wave of decentralized applications, each seeking to ensure the complete adoption of digital currency.

The facts are clear that the impacts of web3 are evident and exist. However, much, we only have highlighted how blockchain innovators have used web3 to inspire others and tackle real-world issues. Unfortunately, it is crucial to remember that technology is neutral. Its only functions depend on its creator and how its users implement it. If executed poorly, blockchain technology can have disastrous results both at an economic and social level having the potential to cripple the nation and render privacy obsolete.

This article will highlight the other side of the web3 coin. It is crucial to remember that we are not claiming that web3, the technology itself, has risks, depending on its use, and can potentially cause much more harm than good. In addition, the transformative functions of web3 are evident in Africa, and we advocate for its proper deployment and development.

Web3 Industry the Haven of Change

The Web3 Industry houses numerous elements, all of which have transformed the very definition of the Internet. Blockchain technology, digital currency, Artificial intelligence, and the Metaverse have practically improved most industries known today. The crypto market is by far the most well-known among the group.

Being the initial implementation of a blockchain network, it has significantly highlighted the impacts of web3 on the financial sector. The basic mechanisms of Bitcoin led to the development of various iterations, each having a unique addition. It’s also responsible for creating the first generation of blockchain developers, a tike before it was considered a valuable skill.

Also, Read Truths and misconceptions of AI possibilities in DeFi.

Innovators had to learn the creation of smart contracts from scratch, and it led to significant progress from digital currency. Furthermore, Bitcoin’s Blockchain network led to the development of Ethereum. They set their primary goal to improve the entire web3 industry by providing the necessary support and environment for blockchain developers. 

Gradually from the immutability and traceability of digital currency came NFT. This new decentralized application took its fundamental functioning and brought us digital ownership, a concept previously unheard of. This turned the art industry upside down as a wave of NFT artists shifted from brush and paint to a stylus and a tablet.

Furthermore, digital ownership paved the way for new identification systems whose applications would have a significant social and economic impact. With NFT growing, a two-futuristic concept soon became a reality, and man deemed this new evolution as the 4th Industrial Revolution. Advancements in the Metaverse and AI soon played a crucial role in bolstering the web3 industry.

Redefining Other industries

Other industries, such as the medical sector, real estate, and even the mobile network, incorporate blockchain networks, ushering in a new wave of Decentralized applications. With the web3 industry finally having robust, logical and practical elements, innovators began expanding their usability to their enterprises.

This led to numerous innovations, such as Blockchain in energy, which implies using mini-grids to provide decentralized power on a blockchain network. Using the Metaverse in education has broadened the scope of practical learning for medical students, flight training and other jobs. AI has automated several functionalities making tasks much easier to accomplish. 

The benefits of decentralized application led to our decentralized website in web3africa.news. Its concept, practicality and flexibility prove that using digital currency and blockchain networks has positively impacted the web3. Unfortunately, due to its redefining vision, many have opted to view the web3 industry as the “messiah” of the Internet.

This is, unfortunately, very far from the truth. Others within the tech industry have pointed out that web3 has potential positive impacts. Still, due to its utterly redefining concept, most have tried to take control of it and are succeeding. This line of thinking led to creating the web4 and the web5, each claiming to provide proper user empowerment and digital ownership.

The dark side of the Web3 Industry

Despite all the good it has done, thee still exists negative impacts of web3. In fact, due to the revolutionary concept of web3, if implemented poorly, it could have disastrous effects setting back networking prowess back decades.

The new nature of web3 is its undoing

Many have claimed that the web3 industry provides some level of cyber security compared to its predecessor. This fact is accurate, but it natively protects against fraudulent activities, and average web2 hacking skills are almost useless against it. However, the web3 industry is still relatively new. Refrain from letting the hype of decentralized applications and blockchain networks fool you; fully adopting web3 is no simple task.

Also, Read AI NFTs: The downfall of NFT artists.

In 2022, the crypto market suffered heavy losses from crypto hacking and blockchain vulnerabilities. Its complex nature sometimes works against it since smart contracts are prone to human error. Once a developer deploys a smart contract, it instantly kicks off its immutable nature. This means any flaw in its coding will still exist and is prone to potential exploitation. This has been one of the main factors that have led to crypto exchanges losing millions to hackers.

In addition to improving the blockchain network, its complexity also increases. Ethereum is known for hosting decentralized applications on its native blockchain network. However, if configured correctly, most people need to realize that any deployed blockchain network can deploy yet another blockchain technology.

This created layer three blockchain networks stacking up on the Ethereum network. This might be an easy concept from a technical perspective, but it remains cumbersome for non-technical users. For instance, decentralized applications often have complex features beyond digital currency. Thus, explaining fully-collateralized loans, staking on PoS networks or even staking liquidity pool tokens takes a lot of work for the average Joe to comprehend. 

Africa suffers greatly from this since the main hindrance to the continent’s web3 industry is a need for more knowledge. Web3 is still new to them, and existing blockchain developers fresh out of graduating need help deploying user-friendly interfaces. 

The web3 industry can breed illegality

The entire concept of digital currency revolves around empowering the user and keeping facts anonymous. Due to this, the crypto market has become a haven for crime lords and syndicates to pull and transfer their money. For instance, it is common knowledge for crypto hackers to use Tornado cash, a crypto mixer mixture, to make a clean getaway with millions. Because Tornando Cash prioritizes privacy, tracing users within its blockchain network is impossible.

Now imagine if crypto hackers openly use Tornado Cash to “clean” their tracks. Imagine how many more go unnoticed. According to Chainalysis, criminals alone laundered $8.6 billion in crypto in 2021. This issue is way up the governmental ladder as well.

According to sources, North Korea has used digital currency to fund several government operations, including heavily sanctioned nuclear weapons programs. Remember that a nuclear bomb has the power of 10 tons of TNT, enough to eradicate an entire city. The Palestinian terrorist group Hams used a site called cash4ps to solicit Bitcoin donations in 2020. Despite the positive impacts of web3 on transparency, it also can hide an individual since they don’t create any real trace.

The web3 Industry ushers in chaos with AI

This year the entire technical industry was in an uproar as it became clear that AI will soon render some jobs obsolete by 2030. One of the significant adverse impacts of web3 is the introduction of AI to its primary functionalities.

In a previous article, we depicted how AI and blockchain technology are like bread and butter. The same bonding agent between both technologies can cause catastrophic damage to a nation’s economy if it goes unchecked. Incorporating technology has led to the creation of concepts such as AI NFT.

Also, Read Crypto Coins vs Crypto Token: Are they the same?

AI can create masterpieces simply by analyzing previous work. This caused significant controversial options in the art world; what provided them with an ample market could soon render them useless. Due to the decentralized nature of the Web3 industry, implementing a smart AI could give it exponential power. The creation of ChaptGpt has made work easier for most tech users, but it’s advancing nature has proved to be a threat.

These days students and professionals use its functionalities to create entirely new work with the tap of a button. This may seem like an advantage initially, but it has corrosive repercussions in the long run. Elon Musk once stated that AI is more dangerous than any nuclear warhead. Many people might assume he meant that AI could take over, like in “Terminator the Movie”, but it’s far from his perspective.

AI learns, and injecting it into social media platforms can cause political strife and propaganda simply by conversing with individuals. AI these days sound more human with each interaction, and its primary goal is to blur the lines between itself and human speech. If you cannot tell whether a chat is generated by AI or by a person, the AI has accomplished its goal.

Web3 Industry blurs the lines of privacy and control

In a previous article, we highlighted how the Metaverse and privacy could not mix efficiently. For instance, public blockchain networks record every transaction. Although it cannot accurately trace the owner, their activities are open to the world. Cyber security can track down a wallet’s owner with the right tools and legal permissions. One of the few negative impacts of web3 also comes into play with the development of blockchain-based social media platforms.

If implemented poorly, the web3 social media platform can render the right of removal obsolete since it would require consensus to remove specific data. Fortunately, there are ways to go about this. Still, ultimately, if an entity of a blockchain developer desires for information to exist indefinitely in a decentralized application, they can easily configure the smart contract to do just that.

Digital currency also heavily depicts the negative impacts of web3. There are different types of digital currency, but CBDCs pose the greatest threat. Due to its centralized nature CBDC, governments can build a dictatorship system without its user’s knowledge if it lands the wrong.

These digital currencies implement centralization, meaning the government can monitor and track their movement. Its implementation does bring financial inclusion but also leads to centralized control. Theoretically, if a government wanted to lock your assets, it would take an actual procedure. Unfortunately, a government can switch off your funds if CBDC is in place without ethical policies and guidelines. This represents a significant infringement of privacy, portraying the greatest negative impact of web3.

Also, Read Crypto Altcoins built on AI in 2023(Opens in a new browser tab)

Conclusion

The web3 industry has the potential to revolutionize the world. Implementing digital currency, blockchain networks, and decentralized applications can give users the required control. Unfortunately, not everyone is happy about such a change. Various entities have tried to control the very concept of the web3 industry, and thus, alternative iterations have sprouted over the years—for instance, many view hybrid blockchain networks as a front for controlling web3.

For this reason, influential parties such as Jack have stated indiviudals trying to control decentralization have corrupted web3; this has led to the development of web5. Despite this, the Web3 industry could revolutionize or rule the world, and it generally depends on how and who oversees its implementation.

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• Source: https://web3africa.news/2023/05/21/featured/risks-in-web3-industry/