Southeast Asia: The World's Gateway to Web3 Innovations in fintech have proven to have found a large niche in the Southeast Asian market as the population is very adaptable
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It's 2022 and we won't be seeing our grandpa's world wide web much in the future anymore. And these days the hype in Asia, especially Southeast Asia is definitely not about surfing the interweb, but it's about creating content and monetizing it. Enter Web 3.0 or some call it Web3. It is the next phase of the internet which is more decentralized; using blockchain, artificial intelligence (AI), and machine learning techs. But why is Southeast Asia so hyped up about it?
Before getting into that, first of all, let's touch on an oversimplified explanation of the web's evolution:
- Web1.0 is the early stage of the internet in the early and mid-90s where people were able to set up their own websites using simple coding. Most activities done in Web1.0 were "surfing" the internet.
- Web2.0 is the stage of the internet in the mid-2000s where most people have started to search for information (and do everything else) using Google, and connect with other people using the Facebook platform. These platforms monetize these interactions through targeted advertisement. This format is dubbed the "centralized" web system.
- Web3.0 is currently at its early stage and trying to take control back into the people (users) and make the internet more decentralized. Blockchain is the system that allows such decentralization and its success will pave the way for how humans in the future will live in this hybrid lives of online and offline worlds.
While the world today is more connected than ever through the internet, through this, we can also see that the world is politically and technologically divided. For decades, the western world had more of an advantage in wealth and technology invention which has created a very tech-based western-centric economy. As a result of this, major tech corporations that became the Web 2.0 giants such as Google and Facebook (Meta) are based in western countries.
The trade war between US and China, and now with US-Western sanctions against Russia, will result in the creation of a more "neutral" socio-economic-digital block in Southeast Asia where the people are more detached from the ongoing scrimmages of the giants. In this region, many have been put under the "unbanked" in the conventional financial system, and many are not yet on board with the then "modern" financial and banking systems. However, innovations in fintech have proven to have found a large niche in the Southeast Asian market as the population is very adaptable; enabled by smartphones. But in what form? Definitely not in the traditional banking and finance type products and services.
Southeast Asia is one of the breeding grounds for decentralized finance, but the entry points into DeFi is what makes the region so interesting. One example of the increasing prominence of Southeast Asia's Web3 rise is cryptocurrency adoption, and also the colossal number of players of the play-to-earn game Axie Infinity. Singapore alone has more than 400 blockchain-related startups, and P2E (Play to Earn) games such as Axie Infinity is picking up more users along the way. Western investments into the Asian players are also making the news, such as US billionaire Mark Cuban's "sizeable" investment in Indian blockchain company Polygon.
Meanwhile, regional blockchain company Emurgo has established more presence in Singapore, India, and Japan as well as Infinity Blockchain in Vietnam and Taiwan. WIR Group in Indonesia is also making its presence known in the online and also offline world as well as developing its metaverse. WIR Group went public on the Indonesian stock exchange last April and one of its units namely AR&Co focuses on deploying augmented reality projects in more than 20 countries. Tokocrypto and Indodax have also been present as Indonesia's crypto exchanges.
The discussions on how and when Web3 will "take over" Web2 will probably never conclude in this decade. The timeline of its partial and total inception will be clearer in the future; most likely when we're already in Web4. But let's not get ahead of ourselves. For sure Web3 is at its dawn and the movers and shakers will come from parts of the world that previously were not the early adopters. Decentralization of the internet and other geopolitical polarization (trade wars, etc) will open more opportunities for Asia (and especially the Southeast Asian nations) to be the first movers into this new frontier.