If you have stumbled upon this article you have probably seen the term web3 being mentioned around the internet. Especially on Twitter at the moment it seems to be the latest buzzword.
With all the hype around NFTs and crypto at the moment, a lot of people are assuming that this is all web3 is. However, web3 (or web 3.0) has a lot more to it than that.
Before I go into more details, let us look at how we got here and what we consider web 1.0 and 2.0.
When the internet first went mainstream it consisted of static HTML pages that were uploaded to servers using FTP.
People who had the technical skills were the only ones that could contribute to the internet at that time. The internet was limited to news sites and technical sites and wasn’t of great interest to the general public.
This stage of the internet is now nicknamed the read-only web.
Soon websites started to be backed by databases instead of static files. It was now possible to interact with websites and not just read them.
Websites started allowing people to comment on their articles and soon we had online stores that we could buy from.
As traffic to these websites increased people started looking for ways to monetise their work. As with traditional media such as magazines and newspapers, the solution was to sell advertising space on their website to companies looking to advertise their products and services.
In the early days of Web 2.0, apart from comments the content on the web was still mostly produced by website owners.
In 2003 MySpace was launched. People now had a space to create their own content and share it with others. By 2005 MySpace was seeing 16 million monthly users and was acquired by News Corporation for $580 million.
Facebook was already out but limited to university students. This all changed in 2006 when Facebook opened up to everyone over 13. It didn’t take long for everyone and their Mum to have a Facebook account and sharing everything about themselves with the world.
With everyone using Facebook and Google, these companies amassed a large amount of data about their users.
Facebook was looking for ways of monetising its site. As selling the user data was morally wrong (although it didn’t stop some) they instead went with allowing people to target users with adverts.
Instead of paying for advertising space on a website and hoping your target market was looking, you could now push adverts directly into people’s Facebook feeds based on age, sex, location and interests.
Social media companies started reaching billion-dollar valuations even before they started monetising due to the information they had on their millions of users.
If the product is free, you are the product.
Tech companies didn’t need to sell products or charge for the use of their service. Instead, they could collect data on their users and sell access to that anonymised data to companies.
The users became the product.
Of course, with there being so much value in user data these companies became targets for hackers and over the last decade, there have been a lot of high profile data leaks.
If you have used any of the major websites chances are your details have been leaked.
In some cases, it hasn’t been the result of hackers but the companies outright selling your data.
If you are an active internet user like me, chances are you have lost track of the number of websites that you have given your email address and other information.
There are so many services that I have signed up to but later decided it wasn’t what I was looking for. Most of these sites don’t have ways to delete your account and there is no way of knowing they do delete your details anyway.
Let’s take the example of buying something from a trusted website.
Chances are you would have agreed to all this in the 20 pages of terms and conditions you agreed to but didn’t read.
Of course, to be able to have a credit or debit card you would have had to hand over all your details and money to a bank. They also would have used a bunch of third parties to be able to validate who you are and print the cards you are using.
With cryptocurrency, it is now possible to send money (or crypto tokens) from one wallet to another without sharing any personal information. No third party is involved it is purely peer-to-peer.
Now if this blockchain was hosted by a single company it wouldn’t be much better than the payment system we have now. However, the blockchain is decentralised, not owned by a single entity and impossible to take down. All the payments are immutable and verified by the network.
If something is completely decentralised then it cannot be taken down as it doesn’t exist in a single place. Of course, this is useful for more than just payments.
The power of web3 is the ability to be able to create applications and websites that live and work with the blockchain. Completely decentralised and available to everyone.
NFTs or Non-Fungible Tokens are assets that can be bought for cryptocurrency and stored in your crypto wallet.
You will probably be familiar with NFTs from people talking about NFT art. NFT Art is about ownership. Yes, it might just be a JPEG that you are buying but you own it and can prove that you own it.
It is the digital equivalent of owning the Mona Lisa versus owning a print.
The uses of NFT go far beyond the artwork. It provides a trustless system for ownership. Anything digital that you own can be represented as an NFT and then verified by a third party that you are the owner.
Nearly every website you log into requires a username and password. With web3 all you need is your wallet connected with your NFT. No personal information needs to be transferred.
Not only that but you can transfer your ownership to someone else. This is something that the digital space has been sorely lacking.
Let’s have a look at a few examples:
At some point, you have probably bought a digital copy of a book, game, song or movie.
Chances are it wasn’t much cheaper than buying the physical object. However, with a physical book, you can donate or sell it once you are done. With a digital copy, you don’t have that option.
However, if that book or game was an NFT in your wallet you would be able to donate or sell it when you no longer wanted it.
An NFT can also be used to provide access to a resource. By having the NFT in your wallet a web3 website can check whether it exists before granting you access.
Let’s say you bought an online course. You might be given lifetime access to this course but if you find you no longer need it you are stuck with it.
However, if course access was granted via an NFT then you would have the ability to sell or donate that course when you were done with it.
This can be used in the physical world too. Any event that requires a ticket could be sold as an NFT. Only those with that NFT in their wallet have access.
I love the scene at the start of Ready Player One where they all fighting in one of the game rooms to try and get the special item (I think it was a sword but I need to watch it again).
In the online gaming world, there are already unofficial markets for gaming items. I never played WoW but I remember people selling their rare items on marketplaces.
The problem is you can easily be scammed as you are trusting the user to hand over the item once you have paid. Or trusting the marketplace to verify that the money and items have been transferred.
If game items were NFTs they would be yours to own and transfer.
There are already some games coming out that rely on NFTs and these are being coined Play-To-Earn games. Axie Infinity is the most popular at the moment.
In some cases, it is possible to earn several thousand dollars a month playing this game.
This game is particularly popular in some countries in Asia at the moment as people can earn more playing this game than they can from local jobs. What would you rather do, work in a factory, on the fields or at home playing a video game?
Unfortunately, you need to own 3 Axies to start playing and with prices starting at 0.034 ETH ($129) per Axie it can be steep for some.
Axie Infinity has started offering sponsorships as an option. Where people can pay for the Axie’s for someone else and in return get a percentage of the profits.
The other aspect of web3 is how the physical world is going to merge with our digital one.
We now have a few VR (virtual reality) headsets on the market as well as AR (augmented reality) built into our phones.
Facebook is also currently working on AR glasses, I am sure other companies too.
As more devices get released, there are sure to be more uses for them. The same way everyone has come to embrace wireless payments at some point the same will be true for AR and VR.
You can read more about the spatial web in the book The Spatial Web.
Imagine wearing your AR glasses to the supermarket and being shown a route to the items on your shopping list.
AR could also be used to subtly highlight the products on the shelves that meet your dietary requirements. No need to look at labels to check for wheat or dairy.
Looking online for clothes but not sure how they would look on you? Well, your AR glasses could help with that too. Augmenting the clothes you pick onto your body, maybe even helping you pick the correct size.
Can’t get out at the moment? Wellm why not visit the same shops but virtually and pick the items from your shelves in VR.
The problem with these uses at the moment is it is dependent on device support. It isn’t going to work if some stores only support certain devices.
Imagine being able to use your Apple Glasses in Waitrose but you need Samsung Glasses in Asda. It just won’t work. This is where the metaverse comes in.
The virtual world (or worlds) and the augmented world is being collectively called the metaverse. The metaverse is an interconnected network of worlds that allow continuity of identity and objects.
Currently, the apps and games we use are often dependent on the devices we have.
Some games are only available on XBOX or Playstation while others can be played on all devices.
Even online games available on all platforms have limitations between them. Sometimes you can’t see other players on a different device than yours and you certainly can’t transfer your saved game between different types of devices.
The metaverse is completely connected so not only would you be able to move your identity between different devices but also between different virtual worlds. Everything is interconnected. Say you win a sword in one game, you could then take this sword with you and use it in another game.
Again, I am going to reference Ready Player One here. Where no matter what virtual world they were in, their identity travelled with them, as did their inventory and they could use that in any of the other worlds.
Where do you think your identity and inventory would live? You guessed it, your digital wallet on the blockchain.
With the help of AR you could even see your VR items in the real world too.
With everything else being decentralised then why not businesses. Instead of a business being owned by a CEO and its founders, a DAO is own by all of its token holders. Each token holder is given voting rights and can decide on the direction the DAO will take.
Any profits made by a DAO are then evenly distributed to the token holders.
There are a few DAOs going around at the moment. It is worth having a read about them and see if you want (or can) join them.
This all sounds great but we are only at the beginning at the moment. We are a little way off chasing keys to the kingdom in the Oasis metaverse just yet.
So we have our decentralised currency that, will work across all our virtual worlds and soon the physical world. Bitcoin is the main candidate and now being legal tender in El Salvador.
However, we also have a mind-boggling array of other cryptocurrencies. Ethereum is the most well known. It builds on Bitcoin by having smart contracts and assets which give us NFTs. It is currently hindered by the expensive “gas” fees that are needed to do anything.
Until cryptocurrency is accepted in physical stores we are still reliant on exchanges to convert the currency back into local fiat currencies. This usually involves handing over a lot of personal information before you can make the conversion.
At some point, we may select a winning cryptocurrency but for now, we need to cope with all the different varieties and rely on exchanges to convert between them.
Web3 websites are starting to crop up here and there mostly around the NFT space. If you own an NFT you gain access to their community and unlock areas of their website. I expect we will see more websites using NFTs for access soon.
Currently, web3 is still browser-based. You will need a browser extension to be able to access web3 features.
You need the Metamask extension, that we allow you to connect your wallet to web3 websites. Provided you have funds in your wallet you will be able to mint NFTs on their websites as well active the owners only features.
If you want to get started with web3 development there are some great resources out there already.
I am still getting started myself with web3 but it is an interesting space and I am sure to post more content here soon.
Software Developer, Entrepreneur, Father, and Husband. Engineering Lead at Checkout.com.
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