Things That Can't Exist Without Web3

The lead image for this article was generated by HackerNoon's AI Image Generator via the prompt "web3 metaverse"

Web3, a familiar and unfamiliar word, has recently appeared repeatedly in major media reports and corporate publicity. However, how many people have really entered the world of Web3, and what are the things that are not accessible without Web3?

I believe that the first step for most people to enter Web3 is to use a CEX to create their first Bitcoin trading account, or to use the Metamask wallet to create their first Ethereum address, thereby opening their own BTC and ETH story.

After that, they slowly touch more digital currencies, begin to pay attention to their price movements and soon feel ready to hold them. We hope to realize the dream of financial freedom through such an emerging market. Some speculators who have tasted the sweetness have begun to publicize their belief in Web3, hoping to influence more people around them to join this “game”.

However, this is by no means Web3.

If you want to explain Web3 in the simplest language, I think it is a decentralized collaboration model. This model completely subverts the traditional rules and gameplay, enabling everyone to remove the shackles of centralized institutions and truly control their own data and identity, thereby promoting the development of a value-driven economy. Although many people still have reservations about the necessity of blockchain and Web3, it is undeniable that there are indeed many scenarios that cannot be separated from the necessary elements of Web3.

Decentralized storage ensures information security

Since the advent of the ARPANET in 1969, the Internet has enabled the interconnection of the global world. At the same time, tens of trillions of data are also generated. It is increasingly difficult for personal PC devices to support the storage of these data, and hardware devices with powerful storage capabilities are often difficult to carry. Cloud storage emerged as the times required, providing a shared data storage platform for all kinds of users to manage and use their own data through uploading and downloading. Google Drive has reached 120 million users. Moreover, with the diversification of user needs, these cloud storage services have further expanded their business scope, such as Google Cloud, AWS, etc., by providing customized SaaS services to help enterprises achieve business transformation, improve agility, reduce costs, and accelerate innovation. While fully enjoying the convenience brought by these services to individuals and enterprises, various information leakage incidents are emerging one after another, and personal data trafficking has even become an industry.

The rise of major public chains in 2018 also stemmed from the awakening of this problem to a large extent. Unlike cloud storage, public chains refer to consensus blockchains that anyone can read, send transactions and obtain valid confirmations. The public chain is usually considered to be “completely decentralized”, all data is open and transparent, and no individual or institution can control or tamper with the reading and writing of data. It has the characteristics of protecting users from the influence of developers, low access threshold, and default disclosure of all data.

These are all impossible to achieve with traditional Internet services. With the development of the past five years, from the becoming of an Ethereum killer to today’s embrace of EVM, major public chains have gradually realized that it is unrealistic for one to dominate. Contention is the choice that is conducive to the development of the entire industry. On the basis of ensuring the security of node operation and optimizing TPS and other infrastructure, it has become a consensus to consider interoperability with other chains to the greatest extent possible. On this basis, each chain must also maintain a certain degree of focus. Whether it is DeFi on BSC, NFT on Flow, or DID on Ontology, they have gradually formed their own differentiated advantages and unique brand labels.

Decentralized identity protects personal privacy

In the traditional world, passports, ID cards and other documents are the certificates to prove our true identity, and they are issued by the authoritative institutions of the country. When we need to handle some specific business, we need to provide all our information to the institution as required. Take the matter of buying a ticket for example, we need to provide the airline with information such as our name, gender, date of birth, ID number, etc., and the ticketing process will only be entered after the airline has verified that the passenger meets all the boarding conditions. This information is often stored by airlines and used in other business scenarios of the company, which is why when you haven’t gotten off the plane, you will receive all kinds of airport shuttle services and travel advertisements on your mobile phones.

In fact, this is not a necessary operation. What they need to know is only important information such as whether the passenger is over 70 years old and whether there is a disease that is not suitable for the flight. So how to ensure the orderly progress of people’s daily life on the premise of protecting personal privacy? Decentralized identities offer a great solution.

Generally speaking, users can choose a public chain as the carrier for creating their own DIDs (such as creating ONT IDs on the Ontology chain) according to their own preferences, and then all the information uploaded by themselves will be recorded on this chain in a decentralized manner, to ensure that your information is safe and not leaked. For some chains that do not yet support DID, the wallet address on the chain can also be used as an identity identifier under its own specific dimension. Next, users can use zero-knowledge proof technology to authorize their on-chain and off-chain information to generate different verifiable credentials (VCs), which can be customized according to different business scenarios. As a result, users are no longer disclosing their naked personal information, but only large-scale VC results. If Alice originally filled in the airline’s information of being born on January 1, 1990, it can be converted into Alice’s age of 18.

The scene is transferred to the world of a crypto native, and DID is also an excellent tool for users to manage various on-chain addresses, assets, applications, etc. in a unified manner. With the support of decentralized domain name services, everyone can create their own domain names on platforms such as ENS in a personalized way and bind their own wallet addresses. Some new Web3 projects have also begun to extend services to Mirror blog, various on-chain DeFi dApps, and the binding and invocation of traditional Web2 social applications such as Twitter and LinkedIn. They provide users with integrated management tools that integrate Web2 and Web3, and some of them also provide various data analysis functions on this basis to optimize user experience.

In addition, all on-chain behavior records of users can also form their own on-chain reputation, which can be applied to more scenarios through KYC to open up the off-chain world.

Web3 creates a new personal income model

Since Web3 is a new mode of collaboration, individual contributions to collaboration also require a new mode of giving back to incentivize continuous investment. For a single blockchain platform, the individual participation method can be to operate a node in the POS network and obtain a share of the platform transaction fee. These divisions are often based on parameters such as the number of platform coins on individual operating nodes, and the operating time. Another hot scene is decentralized finance. The DeFi Summer in 2020 once triggered a wave of mining for all people, by staking their own tokens to different DeFi protocols, or through ghostwriting operations to obtain project parties. The incentive tokens provided can realize the appreciation of their own digital assets at one time.

When DeFi faded from the short-lived bubble, it was replaced by NFTs as the new sweet and pastry. An important concept is introduced — the creator economy. Whether it is a writer, graphic designer, any type of creator can cast their works into NFT, set their own prices or release them to the NFT market in a way that allows public auctions, buyers can buy according to their own aesthetics and preferences, and choose whether to carry out secondary circulation. In this way, it provides creators with new revenue channels and accelerates transactions in a peer-to-peer manner. On this basis, creators can also gradually build their own fan community, and these loyal fans are likely to become their regular customers and continue to buy their art.

Various types of X-To-Earn, which were popular some time ago, have organically combined blockchain with online games or applications, and while fully ensuring playability, superimposed various token earning modes. Then it is extended to application scenarios such as item purchase and transaction, and builds its own independent ecosystem for each application. Through cooperation with major IPs, the user interface will be expanded to non-Web3 groups. Although I don’t know what blockchain is, I want to come and play.

Another personal income model scenario is in Decentralized Autonomous Organizations (DAOs). Unlike the collaborative model of traditional organizations, the biggest advantage of DAOs is their permissionless nature. In the traditional world, to join a company, an individual must prove academic qualifications and relevant experience, and then go through multiple rounds of interviews. There is no restriction on joining a DAO, it requires you to find a suitable role in the DAO, and you can get corresponding rewards according to the rules of each DAO for completing specific tasks, and this collaboration is global, not subject to physical space limits. Furthermore, this collaborative model is “bottom-up”, which avoids authoritarian problems. Each DAO member can put forward his own suggestions on DAO’s governance rules and incentive distribution methods, and make decisions through community voting. This realizes the healthy iteration of DAO to a certain extent, and encourages DAO members to contribute ideas and suggestions to the organization.

The above parts are only part of the changes brought about by Web3. With the gradual improvement of modern people’s awareness of the security of their own identity and data, the need to control their own time and space is becoming more and more intense, and Web3 will be effectively applied to more scenarios. On the other hand, the supervision of data security and privacy in various countries is also becoming more and more sound, including the EU General Data Protection Regulation (GDPR), the Personal Information Protection Act (PIPA), and the China Data Security Law, etc. The promulgation of the bill, the big Internet companies will also face more challenges, only by embracing Web3 can they find the balance of interests between themselves and their users and achieve sustainable development.

Web3 has arrived, Let’s BUIDL together!