Building Web 3.0 Infrastructure – Moving to a Decentralized Architecture | Blog

Web 3.0 offers great promise for enterprises and service providers. Moving to a decentralized internet can provide users with many benefits. The foundational infrastructure needed to create this truly open technology is evolving. Read on to learn about the features and requirements for the web’s next evolution.

Web 3.0 (or Web3) – a new intelligent and decentralized internet that will be more responsive, interactive, and tailor-made to enhance customer experience – is poised to take off. By allowing for advanced user and device interaction, the next version of the internet will recognize and interpret content and contexts.

Web 3.0 will enable newer business models based on data ownership where owned digital assets will be the key to unlocking access to the richer areas of the internet, moving away from the concepts of “trust” and “permission” presiding in the current internet version.

Seamless lending and borrowing that does not rely on creditworthiness, transaction-based user identification (goodbye Know Your Customer), intelligent marketing, and much more are on the verge of becoming a reality – all enabled by Web3.

Despite its many promising benefits, the transition to Web3 has been slower than initial estimates. But with the underlying technologies’ rising maturity, applications by startups and other enterprises are surging. Established firms also are rapidly exploring Web3 and innovating their existing business models.

Building blocks of Web3

As the industry experiments with Web3 to unlock benefits, the supporting infrastructure that enables the next internet version also is evolving. While creating and interacting with content on websites will continue to be done on existing web servers, the underlying network will facilitate owning and controlling created data.

Let’s take a deep dive into the building blocks of Web 3.0 infrastructure to better understand the following ideal core features required to create this truly open technology:

  • Smart contracts: These pieces of code stored on the underlying blockchain technology get executed when conditions are met. Smart contracts play a critical role in authenticating certain outcomes without needing an intermediary. The automation can continue the governance-free workflow and, once authenticated, update the blockchain. These contracts are enforceable by code, maintaining transparency and autonomy.
  • Tokens (fungible and nonfungible): Monetary incentives like these are vital for Web3’s growth. Tokens can be offered to anyone who contributes to the platform’s governance and improvement. Digital assets lie at the core of the decentralized internet vision and serve as authenticity and ownership proof.
  • Artificial Intelligence (AI): Contextualizing interactions will be critical for hyper-personalization in Web3. AI can bring about increased accuracy, enhanced security, and greater scalability. To achieve these outcomes, Machine Learning (ML) will be used to filter and analyze content to gain meaningful insights, prioritize content, and create user-friendly interfaces in web apps. AI is already changing internet usage in the current Web 2.0 version and will become more dominant in Web3.

Underlying infrastructure requirements

The foundational elements unlock an ecosystem of decentralized, open infrastructure for everyone to use and build Web3. While AI remains an essential building block, smart contracts and tokens are implemented using blockchain. The underlying infrastructure that can seamlessly run blockchain applications and AI/ML models has the following requirements:

  • Computing: Although the Web3 model can converge excess computational resources, running blockchain nodes will require access to high-performance computing infrastructure. Running AI/ML models to serve customized results requires quantum computing to be prevalent. Moreover, running 3D graphics over Web3 in real-time in use cases such as Metaverse would require high-power Graphics Processing Units (GPUs)
  • Storage: AI in Web3 will feed on vast amounts of data to enable personalization. Storing such huge amounts of data requires larger disk sizes. Extremely fast disk read speeds are essential to leverage stored data. The underlying Web 3.0 infrastructure would need to support data of applications that leverage Augmented Reality/Virtual Reality (AR/VR) and other media/video use cases. Finally, Web3 will require decentralized storage solutions to preserve the technology’s sanctity
  • Network: High speed and low latency are foundational requirements to enable Web3. Higher network speed will determine the data transfer and blockchain update speed, enabling real-time processing. Maintaining low latency and high throughput also becomes critical for the transactions and interconnections to prevent delays and enhance the user experience. However, the decentralized nature is concerning because it inherently increases latency and the latency data of leading blockchain networks need improvement

To summarize, all the infrastructure elements must be upgraded to create an efficient Web3 network. Different types of nodes (servers that run blockchain applications) will have varying requirements for computing, storage, and speed.

Edge centers thereby become a natural choice for this ecosystem as they will bring computing and storage closer to devices with varying configurations. These centers will enable cost-effective analysis and processing of Web3 application data.

As far as reliability, the default peer-to-peer nature of blockchain networks enables Web3 to withstand physical hardware failure and network outages. Thus, the extra cost of redundancy would not give enterprises any sizeable operational benefits.

Evolving landscape

Both cloud providers and dedicated server providers have recognized this space’s potential and have made inroads with various startups such as Ankr and ChainSafe. The higher computation power of bare metal servers makes them a natural choice for multiple Web3 projects and protocols. Without redundancy and resiliency concerns, enterprises can easily grow their applications. Firms that are developing performance-sensitive applications will prefer dedicated hardware resources.

Cloud computing’s established reputation and market stronghold will create tough competition for physical server providers and may be able to attract more enterprises. Cloud computing models can strengthen blockchain and increase Web3 security.

Even leading cloud vendors such as AWS and Google Cloud are launching node services. Their Web3 units will provide support for blockchain developers with tools and platforms that can enhance their blockchain journey. However, expanding presence in the Web3 space will require a lot of effort from these hyperscalers to dismiss centralization concerns of using public cloud computing services.

Since all service providers are promoting firms to enhance their applications on their blockchain infrastructure offerings, those who can help enterprises build the next set of innovative applications will stand out as leaders.

With investments pouring in from venture capitals, hedge funds, private equity firms, and other investors, Web3 holds great opportunity that strategy, technology, and consulting providers can cash in by building 3.0 businesses for clients.

To discuss the evolving cloud and Web 3.0 infrastructure, contact  Mukesh Ranjan and Kaustubh K.

Learn more in our webinar, Web 3.0 and Metaverse: Implications for Sourcing and Technology Leaders.

Subscribe to our monthly newsletter to get the latest expert insights and research.

How can we engage?

Please let us know how we can help you on your journey.

Contact Us

"*" indicates required fields

Please review our Privacy Notice and check the box below to consent to the use of Personal Data that you provide.