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Sourcengine’s Tech Angle: What is Web3 and How Does it Affect Electronic Components?

Sourcengine’s Tech Angle: What is Web3 and How Does it Affect Electronic Components?

An illustration representing a digital chip and circuit board

The World Wide Web has gone through many transformations since its inception. Technology is in a state of rapid innovation and evolution. It should come as no surprise that the internet experiences the same. With the continued development of augmented reality and the popularity of artificial intelligence, the discussion of the internet’s next form continues.  

The next configuration of the World Wide Web is primarily theoretical. The metaverse, an imagined digital ecosystem built on various types of 3D technology, real-time software, and blockchain-based decentralized finance tools, is one of the more popular discussions. Meta’s CEO, Mark Zuckerberg, rebranded Facebook and its suite of social applications to prioritize and position itself as one of the leaders in the developing metaverse.  

However, the metaverse is still a long way off. So are other variations of a new World Wide Web era, such as one utilizing the power of quantum computers. Another theoretical internet possibility is that of the World Wide Web 3 or Web3. This incarnation, however, like the metaverse, is already changing the way original component manufacturers (OCMs) and technology giants approach the creation of the components that help power the web, theoretical or not.

What is Web3? Blockchain and Decentralization.

Like the metaverse, there is no singular definition of Web3. It is more of an idea based on the possibilities evolving technology has to offer. Since the introduction of blockchain and how this technology has changed the way information is stored, shared, and owned alongside the rising use of artificial intelligence, understanding how the web would evolve to adapt leads to the creation of a new embodiment of “the internet.”  

Web3, in essence, would be a rewiring of how the web works. A blockchain-based web would disassemble the current monopolies that control information, leading to new economies, new services, and simple cryptocurrency that gives users greater ownership over their data. In Thomas Stackpole of the Harvard Business Review’s own words, Web3 will define the next era of the internet, “Like the Marvel villain Thanos, Web3 is inevitable.”

Blockchain is more commonly associated as the underlying technology used in cryptocurrency, such as Bitcoin. That is only a portion of what blockchain technology can accomplish. It is expected that blockchain technology will spearhead the next evolution of the web as it offers users an immediate and transparent way to store information. Blockchain is a “distributed ledger,” a database hosted by a network of computers instead of a single server.  

It is most commonly used to create digital deeds of ownership for unique digital objects, otherwise known as NFTs or nonfungible tokens–which exploded in popularity over 2022. Blockchain technology is also utilized in decentralized autonomous organizations (DAOs) that operate like “headless corporations.” These, according to experts, mark the beginning stages of Web3.  

Despite these initial efforts, Web3 is still far from any true initial phase one of implementation. It’s only been within the last few years that companies have begun experimenting with the possibilities of Web3, which has quickly led most to the realization that most people don’t know what Web3 even is, let alone how it would work.  

Most evolutions of the web, including Web and Web 2.0, have been defined by a main trait that acts as the catalyst for the next stage. For the initial version of “The World Wide Web,” it had been the physical infrastructure itself, the combination of HTML and URLs that made it possible for users to navigate between static pages. Web2 has been marked by the growing interactivity through user-generated content and the introduction of social media alongside data centralization, with some companies making it big almost overnight.  

Calls for decentralization of data, taking ownership out of the hands of multi-million organizations, has led to the evolving idea of data ownership and, by extension, Web3. Blockchain would be the main tool of this transformation. That said, the early conceptual ideas for Web3 still have much hashing to do. There are challenges, especially if one looks at the controversial history of crypto and NFTs, with government bodies debating the use of regulations or outright bans entirely.  

That said, the exploration of the possibilities of Web3 is significant for specific industries and sectors. For OCMs--as tech giants and other industries explore the options of integrating Web3 into their business models--the need for specialized components to meet the demands of blockchain technology rises.  

How Web3 Affects the Electronic Component Industry

Artificial intelligence has again propelled the semiconductor industry to the forefront of mainstream news. Only this time, it’s for a more positive reason than the aggravating global semiconductor shortage from months past. The popularity boom for artificial intelligence has contributed to a “breakout moment for Web3 infrastructure because these protocols offer solutions to the GPU shortage and data challenges faced by AI startups.”  

GPUs, graphic processing units, are in extremely high demand. Generative AI applications, such as OpenAI’s ChatGPT, use multiple buses of high-end GPUs to function. The GPUs are only needed for a short period for each AI model, but supply continues to grow more constrained and expensive as corporate demand rises. Some of Nvidia’s most popular GPUs can run upwards of $30,000, making them a far too expensive investment for upcoming AI startups.  

A GPU shortage is likely on the way. Demand for artificial intelligence has shown no sign of slowing ever since ChatGPT went live. Very few manufacturers can reproduce the types of GPUs Nvidia has spent over a decade improving. Only recently has one OCM posed a significant threat to Nvidia’s GPU dominance, AMD, and its MI300X series.  

With the lack of GPUs available or accessible, it is more likely this shortage will propel the mainstream adoption of Web3 infrastructure among companies. AI startups will be able to move past clunky experiences through the help of protocols like Akash, also known as the “Airbnb for GPUs.” These are decentralized marketplaces for GPU owners willing to rent their resources, democratizing AI innovation by “making high-cost resources accessible to smaller players, all while allowing hardware owners to generate passive incomes.”

Other protocols, such as file storage through companies like Arweave, will provide payment models for permanent data storage for AI training data that aids in making machine learning open and verifiable for anyone, enhancing the trust in future AI models. Web3 will be the way companies can gain access to the components they need, such as Nvidia’s powerful GPUs, without having to pay for and train their own.  

Similarly, the competition to take Nvidia’s crown has incentivized many OCMs to release their own lines of AI-capable components. In the coming months, more product launches similar to AMD’s MI300X product line will come as OCMs try to carve out their own space in the large AI market clamoring for GPUs. As they do, protocols that share these components on a pay-for-service scale.  

Find What You Need on Sourcengine

As the web enters its next stage of evolution, whether it be a Web3 based on blockchain or new emerging technology within generative AI, chips will continue to play an important role. To help industries begin incorporating portions of Web3 into their operations, components able to handle the massive demand of these new AI algorithms will be on the rise. A shortage of these coveted parts could be on the horizon.  

For those that need components for their upcoming projects, it can be hard to source parts by few and between manufacturers. Luckily, with the help of a global marketplace for electronic components, that task is relatively easy.  

Sourcengine is the leading e-commerce site for electronic components, with over 3,500 suppliers and 40+ franchise lines that are verified and traceable. With a team of experts worldwide, you can quickly search for offers and search for parts without having to search multiple sites for price comparisons. If you can’t find an offer, you can send Sourcengine’s team an RFQ for your own personal part offer.  

Ready to get started with your next project? Send us an RFQ if you have a specific part in mind!

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