web3 decentralisation by fauveish
TL;DR Web3 is the name for the decentralized web and is the evolution of the current internet Web2 protocol based on open source protocols. Web3 is a rethinking of the relationship between users and platforms on the internet today where artists and creators own what they produce on a platform and the platform itself. Users and builders own a piece of the platform with the use of tokens like non-fungible tokens (NFTs) on the Web3 ecosystem. NFTs are portable and interoperable representations of value which can be used across multiple networks and platforms.
How we got here
how we got here by fauveish
In the beginning, the Internet used open source protocols. You may recognize these protocols as IP, SMTP, TCP, and HTTP. A protocol is a standard way for multiple computers to communicate with each other. These protocols control the flow of information and messages on the Internet, and using these protocols to build apps and services is free.
How it went
A free and open source protocol called Web2 was the next evolution of the Internet. In contrast to Web1, which is read-only, content can now be added to the web. Over 2 billion Facebook profiles now use this microblogging platform that started as a Digg board. Other subtle but significant changes also occurred. Web2 paid to host the site instead of users maintaining their own servers. As a result, they gained reams of user, behavioral, and behavioral data to create a more valuable social graph for advertisers. Web2’s product is the individual user.
How it’s going
For Web3, ownership means that the builders, operators, and users own a piece of the platform with Ethereum and Bitcoin being the earliest examples of cryptocurrencies: for securing the network, they receive a bonus in BTC or ETH for maintaining the ledger (the blockchain) and keeping other participants honest. New ownership models have emerged as a result of token-based networks based on Ethereum and other smart contract blockchains. It is possible for a token to provide ownership of a service and also to govern the network’s future changes. Members and participants of the network own a portion of the products and services they use every day.
The Money Layer
the money layer by fauveish
One of the most impactful disruptions of the internet was the creation of a source of easily attainable, affordable, and reliable information without boundaries. As the first protocol to introduce scarcity to the internet, Bitcoin solved the infamous “double spend” dilemma which troubled initial pioneers of digital currency. Double spending refers to using duplicate digital money at multiple locations simultaneously. To eliminate the risk of double-spending, traditional financial institutions like banks and other payment processors validate transactions themselves. The network of miners or validators ensures that an account does not double spend with decentralized cryptocurrencies. As a result, verification and validation no longer depend on the services of a trusted third party. Anyone can examine the ledger and contribute to the peer-to-peer network if they have an internet connection and some hardware. Having social consensus can prevent a coalition from reversing or censoring transactions.
Fungible or Non-Fungible
Scarcity is characterized by whether one unit is substitutable or ‘fungible’. This means that you can substitute an item with another because they have the same value. For example, 1 BTC is worth 1 BTC. Irreplaceable or ‘non-fungible’ means individually unique. Non-Fungible Tokens allow users to own their creations including game components, music, text, security credentials, administrative rights and much more. How can a token be non-fungible if I can right-click to save an image to my computer? Basically, it is important for the blockchain to keep a register of ownership from one account to another. This allows a creator to produce an original and, like the core problem that blockchain solves, prevents another person from claiming or “double-spending.”
The excitement around NFTs as proof of digital ownership is based on their compatibility with the Web3 ecosystem as smart contract blockchain tokens; NFTs allow for the collection of royalties, can be divided into any number of smaller parts allowing for multiple owners, can be used as a pledge or collateral in other transactions, and can even provide an identity.
A Web3 identity
Photo by Markus Spiske on Unsplash
Alienation from our personal data brought us Web3
Most of your social graph data is owned by Facebook. Even if you cancel the service, the data remains connected to the meta-servers. Web3 is reimagining the way we see the Internet. But in fundamentally different ways of communication. We publish information that we believe is divisive between parties. Suppose we put the agreed information into the agreed ledger. The 2018 Cambridge Analytica scandal revealed that the company harvested the personal information of 87 million people to create psychological profiles of voters and influence elections. Massive data breaches affecting hundreds of thousands of people affect millions of internet users as revelations make headlines and allow companies to store and share our data with other services.
The lack of an open source public identity layer was one of the biggest limitations of early internet protocols. Since then, Facebook and Twitter have monopolized this layer as closed-source applications. Within Web3, you own your online identity, and should only disclose parts of it if you choose. Ethereum identities are very simple to create in practice. Think of it as a unique repository for associated claims. It is possible for a government to confirm your date and place of birth without knowing anything else about your digital identity. Moreover, your digital identity may be transferrable between social networks.
ENS and 3Box Labs
The closest thing to a global identity level on Web3 today is the Ethereum Name Service (ENS). You can purchase a unique name for ENS (eg janedoe.eth). Ethereum tokens as non-ERC-721 non-fungible tokens that are then sent to an Ethereum address. Ethereum addresses are generated in natural language and can be used as a convenient way to host NFTs, display tokens, and see who votes on DAO proposals. Web3 is undeniably attractive, which is why many popular world figures such as Matthew McConaughey, Jay-Z and Gwyneth Paltrow have already embraced it. Many celebrities also have .eth usernames on Twitter. It is similar to the first internet protocol in that ENS has no early investors and the protocol itself is an open, decentralized standard. For example, with 3Box Labs you can manage your digital identity and connect your wallet to IDX and Self.ID.
global identity by fauveish
Your Ethereum addresses may be associated with existing social media accounts and other information that identifies you. As with ENS, the vision is for people to be able to choose what information and data about themselves to share when they join new services and platforms. Digital identities that use blockchain are more attractive now in the Web 3 world — linking your Ethereum address to your social media profiles — but the long-term goal of Web 3 is for real identities like government IDs to be verified on the chain as well.
Consent
Web 3 applications are built on the principle that people “send” information to trusted sources, not applications that receive information from sources that store your data. This is why Metamask, for example, is called a cryptographic consensus manager. Currently when you “sign in with Google”, for example, applications can collect personal data that you do not consent to. The lack of transparency of the data that you provide to various applications on the Internet is largely why social networks have taken such a dominant position — this information is valuable and in most cases we agree to give it up in exchange for a service. Web3 can be seen as a reflection of the changing relationship between users and websites on the Internet today, where users are constantly changing what they want to share and what they want to keep private.
Platform Ownership
cooperative governance and ownership by fauveish
A recent tally has the total trading volume of NFTs at $23 billion (DappRadar, 2021). Digital artists have found that NFTs are the first reliable way to support their art full-time. Since NFTs are decentralized, you can create NFTs using your own tokens or the NFT market. Unlike the Web2 social network, this service allows you to buy tokens, sell them on secondary markets or use them in applications or games. NFT is a portable expression of network value that inherits the characteristics of Ethereum.
Ethereum applications now use tokens to reward participation in the network and manage results. NFTs are general-purpose tokens that are portable and interoperable representations of value. SuperRare issued the $RARE management token and created the SuperRare DAO to reward its former artists and collectors and encourage the public to participate in their art.
DeFi protocols like Uniswap are already creating a positive pool dynamic by encouraging liquidity providers to fund trading pairs for almost any Ethereum asset. Even Web2 social networks like Reddit are experimenting with using tokens called “community points” so that active members of a subreddit can “own” part of the social network.
Creator to Supporter Pipeline
Internet spaces meant to help creators monetize in new ways are referred to as the “creator economy.” In contrast to ad-driven, attention-based monetization models, platforms such as OnlyFans, Twitch, and others allow platform users to earn directly from fans. Unlike Web3 networks, creators are not allowed to own the content they share, and can be booted removed from the network at the platform administrator’s discretion.
Using platforms like Substack, Ghost, and Lede AI, writers and journalists can earn money directly from their audience. In spite of this, none of these facilitates direct interaction between writers and their fans. With “crowdfunding”, Mirror redefines the writer and patron model as a Web3 blogging platform. A crowdfund feature allows patrons to deposit their ETH in exchange for tokens that represent their proof of patronage, which can be used for access to a DAO or future rewards from the publication. As more people contribute to the crowdfund, the token becomes more valuable as it signals your early support for the writer or idea.
“Subscriptions are definitely a sustainable business model for many forms of media, but they don’t necessarily fit all forms of content or experimental work, which collectors and patrons are best suited to,”
writes Kyle Chayka, a New Yorker staff writer who funded Dirt.xyz through Mirror
“Mirror’s $ESSAY token and Emily Segal’s $NOVEL token are examples of NFTs that can support collector and patron relationships. It would be great to see blogs, series, and think tanks funded by tokens and NFTs rather than just readers and recurring payments, with rewards for creators and patrons alike.”
In addition to the patron-artist relationship, artists have the ability to engage their earliest supporters directly with fungible or non-fungible tokens — a collection of Ethereum addresses and ENS names that artists can use for mailing lists, entry passes, and payment systems to engage their fans on any platform.
Photo by Joshua Earle on Unsplash
Cooperative Governance and Ownership
Several reasons could have led you to join a group on Telegram or Discord with internet strangers in 2021: You can vote on DeFi governance proposals, choose a project to fund, attend a concert, participate in a residency program, or as some have buy a copy of the U.S. Constitution.
“Decentralized Autonomous Organizations” are community-led entities that use Ethereum smart contracts to establish rules and execute decisions. Ethereum is home to some of the largest and earliest decentralized autonomous organizations (DAOs). The top 20 DAOs hold nearly $10.5B in digital assets.
There is more to DAOs than DeFi. Public funding entities like Gitcoin and media organizations like Bankless use DAOs for financial management, governance, and coordination. DAO token holders in Web3 now exceed 1.3 million. A NYTimes journalist jokingly described DAOs as “chat rooms with bank accounts.” Having the ability to gather, pool capital, and make decisions collectively is Web3’s undeniable appeal.
In the works..
Photo by h heyerlein on Unsplash
Web3 ecosystem veterans are familiar with the design tradeoffs engineers have to make when trying to adhere to maximally decentralized architectures, easy-to-use applications, and scalable infrastructure. As the founder of Signal, Moxie Marlinspike recently wrote about his own exploration of Web3:
“The premise for web1 was that everyone on the internet would be both a publisher and consumer of content as well as a publisher and consumer of infrastructure. We’d all have our own web server with our own web site, our own mail server for our own email…However — and I don’t think this can be emphasized enough — that is not what people want. People do not want to run their own servers.”
Ethereum’s applications often call data from trusted APIs, so he shouldn’t have been surprised. The number of Ethereum full nodes is currently 5,433, of which 40% are in the United States. As one of MetaMask’s first design decisions, they decided that rather than requiring all users to run their own Ethereum nodes, they would instead connect to Infura to serve Ethereum data, so that developers could focus on building applications rather than running network infrastructure. “This enabled users to get started right away without constantly draining their laptop batteries,” writes MetaMask founder Dan Finlay. As Moxie said here, it was a game changer for adoption: People don’t really want to host their own server (certainly not one that is designed to consume a full laptop of capacity).”
In the meantime, Ethereum and the Web3 community are still thinking about ways to reduce trust on every level, such as decentralized data centers like W3BCloud, or bringing light clients to Ethereum 2. MetaMask uses Infura by default, but users can always choose their own blockchain connection instead, and Snaps offers alternative interactions between wallets and servers. Dan Finlay explains, “A snap may allow users to run lightweight clients, select alternative runtimes such as zk-STARK chains, or use new friendly languages.”
While Ethereum has a lot of teams dedicated to improving decentralization, some newer, more centralized crypto networks have proved to be more popular. Despite this, there is no reason to believe that Web3 infrastructure will remain the same in the future — especially as more people experience the benefits of fully decentralized networks. You might have joined a Telegram or Discord group in 2021 for a number of reasons: Attending a concert, joining a program for developers and artists, or even (as has become popular) teaming up to buy a copy of the U.S. Constitution.
Hope you enjoyed this overview journey into Web3. If you’re interested in a deeper dive into a specific topic mentioned above, let me know!
And for more in-depth detail about this topic,
Ethereum.org: https://ethereum.org/en/developers/docs/web2-vs-web3/
Digg Board: https://digg.com/
The Verge: https://www.theverge.com/22310188/nft-explainer-what-is-blockchain-crypto-art-faq
Delton Rhodes on Medium: https://medium.com/the-green-light/https-medium-com-the-green-light-moving-from-web2-to-web3-cf3cd4ac1a62
Spiceworks, Web2 vs Web3: https://www.spiceworks.com/tech/tech-general/articles/web-2-vs-web-3/
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