Leftovers; and web3 Acronyms

Every bubble, once it bursts, leaves a few things behind.?First, some very disappointed investors; second, those who say ‘I told you so’; and third, infrastructure.?Reflecting on the internet boom (and bust) of the 2000s, we can comfortably confirm this tendency: many investors were disappointed, there were plenty of “I told you sos”, but the capital that flooded into the .com world left us with a functioning internet. Similarly, the real-estate boom that landed us in the Global Financial Crisis left us with a lot of, well, buildings and homes.?In the case of today, the crypto volatility, following the crypto gold rush, is a natural progression and the bubble(?) we witnessed is a necessary part of the cycle that builds the web3 infrastructure that we will continue to use for generations to come (just like the internet, or real estate).

So what exactly are the leftovers in this case??The infrastructure and launch of web3; and the following acronyms:

deFi: decentralized finance

This is the group of solutions that enable financial services and instruments which do not rely on intermediaries such as brokerages, exchanges, or banks.?The disintermediation of these ‘middlemen’ increases the privacy of financial transactions.?Additionally, it provides security for users that may not have access to stable economies and banks.?Finally, it is a great way of banking for the unbanked and underbanked (still 31% of the world’s population).

dApps: decentralized apps

These are the apps that are being built on web3. ??They are ‘preferred’ to apps on web2 since the service/product is decentralized so incapable of going ‘down’ due to server misfunctions or being shut down by a large corporate.?The data they accumulate and manage is on a distributed chain and so, in the absence of a corporate server, is more secure and private.

NFT: non-fungible tokens

These are tokens that prove ownership: of art, music, or anything else that is digitally recorded on the blockchain.?They exist as a record of ownership of a digital asset.?This is instrumental since web2 never allowed this in a non-fungible fashion. To better grasp NFTs, I often extend my imagination: consider the year 1863, the first time a deed was created to prove the ownership of a house.?The arguments would have been numerous: it could burn, get lost, be forged.

DAO: decentralized autonomous organization

These are social groups with no central leadership, governed by a community that has agreed on a set of rules which are then enforced by a blockchain.?Proposals and decisions are made by voting.?The ability to build these is predicated on the smart-contract and rules that web3 makes possible.?These are valuable to the users since they are simple, eliminate the middle-men (no need for lawyers), and allow incontestable enforcement of the rules.?

Play-to-Earn

These are games that are built on the blockchain that enable players to earn money as they game and advance to new levels.?This is made possible with micropayments and web3 technology.?It also means that, as an increasing number of people spend time playing these games in virtual worlds, and since time is a limited asset, players can start monetizing their time, effort, and audience.

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In 1690, when coins (in circulation since the 7th century BCE) were beginning to be replaced by paper money, the thought must have been nearly impossible to understand: how could something, made from silver or gold, be represented by paper??Similarly, the question we now have with crypto is: how can something, backed by governments and sovereignty (and is physical most of the time) be represented digitally and be unbacked??

Whether or not crypto increases or decreases in value at this point in time, I find one thing certain: the infrastructure it will leave behind, as in most other booms and busts, is here to stay.?The acronyms symbolizing the application of web3 in a value-add manner to society are here to stay for a while; and they will likely proliferate.