13 Aug 2022 starting note.
Thoughts about web3....
Disclaimers:
- my thoughts only. I may be wrong.
- I am a believer
- a part of my investment portfolio is invested in 30+ coins & tokens
I have started using Bitcoin in 2010. At the time it was still understood as "digital cash", which is what I have used it for, for many years.
It is not until later, that it became clear that Bitcoin was going to be the "digital gold", other cryptos better fitted for the role of "digital cash" and that the underlying technology of it all - blockchain - would enable new use cases, now under the umbrella term "web3".
I thus have started investing in Bitcoin and other tokens (ie web3 projects) late in the game - also linked to when I had some investable cash for risky assets.
Using this space to collect and crystallise my thoughts, especially right now in the middle of a crash and huge backlash of naysayers about the fundamentals (ie value/use) of the underlying technology.
09 Sep 2022
The way I see it:
- web1 (2000s): static internet (information only)
- web2 (2010s): apps internet (platforms & "everything-as-a-Service, eg SaaS), powered by company-owned architectures
- web3 (2020s): trust internet (transactions & ownership), powered by blockchains
Pitting one against the other is not the right approach.
I see each as a layer of an evolving internet.
- web1 layed down fundamentals - TCP/IP, HTML, CSS, etc.. - used by both web2 & web3
- web2 added a layer enabling interactivity, apps, platforms, etc.. but gave rise to centralisaton of data
- web3 adds a layer of trust and automation, potentially for anything where transactions and proof of ownership are required.
web2 will not "die". It will continue as a layer of what internet will become in the years ahead.
What is web3
web3 is additional "plumbing" for internet, able to support the flow - automated or not - of transactions in a secure and decentralised way, keeping track of ownership in an undisputable way.
It is the umbrella term for anything that uses blockchain technology - as the technology is generic, it is quite vast, and mostly untapped/unrealised/unthinkable yet.
To understand web3, it's important to understand what blockchain is, and the potential of it.
blockchain
And to understand, it's important first to understand what a ledger is.
This is a ledger:
TODO analogy.
It is using Peer-To-Peer logic - transactions can be made directly between 2 entities (human or machine), without a human intermediate (financial institution), with the trust that comes from a shared (ie decentralised) and open (anyone can access it) ledger, powered by maths (ie algorithms) which is more reliable than humans, who are costly and more prone to mistakes.
smart contracts
company-owned architectures vs community-owned (ie decentralisation)
I'm defining web3 as "community-owned", in contrast to "company-owned", though this can be argued.
My instinctive thinking is that machines can be trusted more than humans, when it comes to logic, record keeping, reliability, consistency, etc...
how trust & ownership work in web2 (and why web3 is needed)
TODO
DeFi
Decentralised Finance.
First obvious space where blockchain can have an impact.
Finance institutions are humongous cost centers in all transactions.
Everyone is basically paying, with each financial transaction, for those companies' fancy offices, huge staff, crazy bonuses, wrong decisions, marketing, etc...
The premise of disintermediating (ie removing) legacy financial institutions is
From experience having worked with financial institutions as client, they are:
- extremely inefficient, leading to overstaffing
- working
Inefficiency: look up revenue/employee ratios. Though because
NFT
NFT = Non Fungible Token
Awful acronym/name for what is basically a digital certificate of ownership.
It has been surprising to see that one of the first use case to blow up in web3 is art!
Potential use cases for web3
Listing some use cases I believe make sense to showcase web3's (blockchain's) potential:
| Use Case | Benefits |
|---|---|
| solar panels can sell excess energy automatically to neighbours, instead of back to the grid | --- |
| --- | --- |
| --- | --- |
| --- | --- |
| --- | --- |
| --- | --- |
Learning
Book: The Truth Machine
Good book to help understand the potential of Blockchain:
Pages: 320
Published: 27 Feb. 2018
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