WAGMI in Web3

Decoupling a few queries about the Web3 eco system as simple as possible based on the attempt of deploying a couple of dApps as a hobby project, investing in crypto coins and owning a few NFTs.

IRL, people who holds BTC(Bitcoin) can be assumed to be a citizen of the Bitcoin Country. Because they can use the coins to exchange it to other users on the digital world for a physical item. Bitcoin is accepted as a legal tender by the country El Salvador. BTC is literal equivalent of fiat currencies but for the digital world. The person who holds ETH(Ethereum) belongs to Ethereum country. But unlike Bitcoin country, ETH is a union of multiple regions which runs its owns Cryptocurrencies(ex: Matic, Loopring) and also it is interoperable within Ethereum eco system. Other than Bitcoin and Ethereum, there are thousands of other coins available in the market.

The idea behind the Web3 ecosystem is to build an Internet that is beneficial for everyone(inclusive in nature) which is open, trustless and permissionless. It is ensured through network of computers which eliminates current human processes by solving NP complete programming problems to validate every transaction. Cryptocurrency eco system is cleverly named as Web3.0 to make it easier for people to understand. It gives first hand experience to developers and hackers to be an early adopters into the system since it is difficult to understand for a common human on the Internet.

Web3 in nutshell revolves about decentralising the authority of the system and everyone will have a say in the system unlike traditional systems and institutions. Web3 is mainly driving new business models and incentive mechanisms rather than changing the current Internet architecture.

Web3 doesn't mean that every other system which is alive currently will be replaced by a new system. At least we are not there yet.

All the Web3 apps or dApps(Decentralised apps) are built on alt-coins (Coins other than Bitcoin) like Ethereum, Solana, Polygon, etc.,

Every new technology enters into the world with a big push from a company or a community. For example, Reactjs became popular over the past few years due to its active developer community and the eco system around it. For another example, even though companies like Meta(Previously Facebook), Google and others are heavily investing in Virtual Reality(VR) market, it is still struggling to enter into the consumer market because of a non-existent consumer use case. Oh yeah, Metaverse is coming. Hopefully that brings in a use case for daily usage for an end user. The point here is, Web3 is at the similar stage of being pushed by the community around it. But the push is happening in a pace we have never seen before for any other technologies.

Building communities are the core strength of being in the Web3 eco system. Every other product/coin has its own trusted communities which upholds its value.

Do I have a say in the system if I own a cryptocurrency?

Logically Yes but practically No. Say, you are buying Solana from a Crypto exchange(ex: Coinbase, Binance). Will you be able to say anything in the Solana eco system? Nopes. Some of the DAOs(explained below) giving voting powers to the users on any decisions they make but that depends on your coin holdings.

Can I run Web2 apps on Web3?

Yes, it is possible. But not needed.

TBH, all the Web3 apps are just Web2 apps at this moment with a different hosting provider other than current cloud service providers and built by a smaller developer group unlike Web2 systems. The current trend evolves around trading cryptocurrencies on higher valuations by attracting developer & user communities.

Building Facebook.com or Amazon.com app on chain is an expensive and unnecessary operation to validate every transactions. Companies like Meta and Google might have realised by now on how can they adapt their systems to support the future. It is pretty much possible that Ad re-targeting can be done more precisely on a Web3 system across multiple platforms as well as companies can share advertising revenue with the end users which is not possible right now since the control is centralised.

Where can I start as a developer?

The best part of the Web3 eco system is that the whole execution part of the network is kept open. Look at Bitcoin, Ethereum or Polygon, their complete codebase is open sourced and built around the community of developers and users. Every community in the eco system owns a discord channel as the main communication medium to propagate information.

• The applications run on the chain is called Smart Contracts written in Solidity(ETH based coins) language. There are many resources if you closely follow "Web3 twitter/reddit" space.
• If you are a python or javascript developer or even if you are a non-programmer, checkout: https://thirdweb.com/
• There is a course on coursera
• To start as a blockchain developer from the scratch: https://openquest.xyz/ & https://buildspace.so/ They have an awesome dev community around them
• Documentation for DIY developers: https://docs.openzeppelin.com/openzeppelin/

Is DeFi(DAO) a threat to current financial Institutions?

There are a lot of speculations around this topic. On DeFi aka DAO, anyone can build a company aka DAO(Decentralised Autonomous Org). DAOs are nothing but smart contracts as a company to execute transactions to solve a specific use case. Big tech organisations are already aware of the growing shift in this sector. Best example is Meta(previously Facebook) tried launching Diem(previously Libra). It didn't go as expected probably due to the fact that it is still controlled by one centralised organisation. Governments are still in discussions to amend regulations to bring into the eco system.

DeFi(Decentralised Finance) apps need DAOs to back as an organisation. Governments and other institutions can definitely benefit from the technology as it unfolds and grows. Everyone in the system have a say in making decision through voting process based on their token holdings.

P.S: Web3 companies are still registered as a regular Web2 companies to run their business and to pay their employees. They are still paying taxes to their respective Govts. The founding team generally holds more ownership on tokens with them during ICO similar to a public company IPO.

Is NFT a scam?

No, there are many artists who were making money in the real world, made more money in the digital world by selling digital version of their creations(music, drawings, digital arts). But they are all early adopters into the system. Some of the digital creations are worth millions. Twitter founder Jack sold his tweet for millions(link). Is it actually worth that much? We can't say. But certainly all the currently trending animal pic NFTs(Apes, Gorillas, Cats, Dragons) will have its pivot and the actual use cases emerge.

NFT is the main reason how people are getting onboarded into the Web3 world(shown in the google trends below). But NFT art sets bad example for the eco system. Use cases will evolve. Look at the following NFT from the popular collection "Bored Ape Yacht Club". Images are not actually stored on the chain but only the meta data due to its high gas fees(transaction cost). It means that the picture can be altered anytime by a third party controller. You own the NFT until someone hacks the system. This core problems needs to be addressed ASAP.

Anything you see or you have on your computer can be an NFT and you can claim you are the only owner. This is very early market for NFT. There are many use cases. It can be used as an authentication and authorisation mechanism to let a user into a house, group, event, concert, etc., Even academic degree certificates can be replaced by NFTs.

NFT brings in one aspect that you can own a digital asset and trace its origin which was not the case earlier.

NFTs has an awesome use case in the Metaverse(virtual alternative to physical world) to build props for the environment. It is same as building your own farm in Farmville game with collectibles and paid properties. There are a few communities building platforms on creating digital equivalent of real estates and virtual worlds.

How secure is your Crypto wallet compared to the money in a bank account?

Cryptocurrency as an investment instrument seems very lucrative due to its incentives which is subject to multiple risks. Crypto wallets holds a private key which secures your data in the local machine and enables your interaction online. There are new type of thefts happening every day. There is a huge list of thefts in the history (Wikipedia). You can use a physical hardware wallet to keep your coins safe. But you need to read more from official sources and be very careful especially when you do any transaction in the system. A lot of privacy and security standards are yet to be established.

Does Bitcoin and other chains consume more energy?

Yes, it does. Earlier Internet connection sucks, remember dial up connection. Look at the average connection speed across the globe. Try calculating the power consumption of Meta's new AI super computer - RSC stack is going to have 21000 Nvidia V100 GPUs to run their new platform. In fact this problem pushes companies to innovate on faster processing speeds as well as the need for alternative energy sources. Technologies will evolve and optimise.

Cryptocurrencies doesn’t have anything behind to justify valuation

Except Bitcoin, almost every other coin has its own utility and backed up by a team similar to a public company. At this moment, all the Web3 conversations are driven by discord, twitter and subreddit where the communities are thriving.

Web3 is difficult to understand for a new entrant

It was difficult to understand Internet 25 years ago. Mobile based Web3 use cases will onboard users in a rate higher than we ever imagined. Web3 is still catching up with user's interest compared to other terms in the eco system.

Web1 - Opened up Internet. Services built and was made common for all the users across the internet?

Web2 - Closed Internet. Services built and made money to who owns user’s data

Web3 - Opening up the Internet again to make it inclusive. Wait till then please

Here you go for another take on Web3 ??,

Web3 is here to stay and in its nascent state. Web3 challenges existing policies, systems & institutions and pushes the tech world to innovate further on faster computing speeds. Hit me up if there is anything misquoted in the article :)

The article is published in medium here.