Web3.0 is a gold mine or a bubble?

“We’ve got a gold mine in Google’s backyard, so to speak.”

More than ten years ago, when Internet companies in the Web 2.0 era represented by Google and Yahoo were in full swing, Spivak put forward the idea, “Google has too many daily affairs to deal with, which is our advantage. The final version of Web 3.0 is like the brain of the world, and every Internet user is a part of it.”

Regarding what exactly Web3.0 is, no one can clearly define it at present, and it exists more as a conceptual vocabulary. In some people’s eyes, Web3.0 represents a new trend of future Internet development, involving Decentralization, users have actual control over data and information, and online asset construction.

Musk also recently talked about his views on Web 3.0. He believes that the Metaverse and Web 3.0 are more like marketing terms at present, and they are bubbles created by speculators. From Bitcoin, blockchain, NFT, to Ethereum, various public chains continue to rise, and new concepts such as DApp, DAO, IOT, and earn also emerge as the times require. The changes in the investment market are confusing. To this end, in this article we will mainly discuss:

  • From Web1.0 to Web3.0, what changes have the Internet experienced?
  • The hot Web3.0, is it a tuyere or a bubble?

From Web1.0 to Web3.0

In 1989, Berners proposed the concept of the World Wide Web.

This has fundamentally changed the perception that Internet services are only assembled into “information silos”. To be precise, the static pages of Web 1.0 are the first stage of the development of the World Wide Web. The media forms are mainly portal websites such as Sina, Sohu, Yahoo, and Baidu. Some specific groups or enterprises publish information to the Internet in one direction. , and feed it to users to browse and read.

In other words, Web1.0 only solves the needs of users to obtain and read information. In this process, users can only passively receive undifferentiated information released by the website, but cannot upload their own feedback, conduct online real-time online communication with others Communication, websites and audiences are in an extremely unequal state.

With Web 2.0, it has become a readable and writable Internet with strong interactivity.

At this time, users are both receivers and publishers of network information, and people can conduct two-way and multi-directional exchanges through the network. From website portals to personal portals, from information online to user online, Web 2.0 has formed a human-centered communication and interaction method, and has also boosted the rise of social networks. The software has also begun to jump out of the PC side, and apps such as WeChat, Weibo, and Douyin have appeared one after another.

But in fact, Web2.0 is still a centralized network form. The Internet platform controls user data and information, and operates user groups. There is a certain risk of information leakage and loss. Passively contributing data to the platform to provide advertisers with cash, The value of a single user is often difficult to reflect. Another normalization problem is that it is not easy to trace the source of virtual objects and physical information under centralization, and it is inevitable that there is a possibility of fraud.

So what about Web3.0?

As early as 2006, before Web2.0 was hot, Radar Networks (Radar Networks) was still in the period of secret preparation. Chief executive Nova Spivak said that with the help of government technology, Radar Networks will have the ability to change Internet users’ search for information. In this way, the network can not only understand the concept of words and sentences, but also judge the logical relationship according to the semantics, which is the semantic web function proposed by Tim Berners-Lee in 1998. Radar can be said to be the pioneer of Web3.0.

In addition to the outer packaging of the Semantic Web, Web3.0 is a new Internet form developed by combining blockchain technology. Its core lies in decentralization – “giving users the ability to truly own the Internet” , Brian Brooks explained, In the era of web 3.0, the data and information in the Internet have been confirmed from the moment they are published, so there is no need to worry about being stolen or the data being lost in the database being deleted.

Web3.0 is a gold mine or a bubble?

Figure: Schematic diagram of centralized and decentralized network structure (Source: Dongxing Securities)

However, the significance of Web3.0 is not limited to this.

Whether it is Web1.0 or Web2.0, users often need to register different accounts on different platforms, and the information is isolated from each other. For a simple example, in the past, we could not directly jump from one App to another, because Different platforms need to build their own huge user groups and take security precautions.

Web3.0 has undergone a paradigm reversal. Through the underlying logic of Web3.0, the user and the platform are independent. When registering or logging in to the website, there is no need to fill in the identity information and agree to the privacy agreement. The network goes directly to creating accounts and has a token protocol that maintains the Internet. Ideally, you only need to use your own digital wallet and key to log in to any website, and at the same time use the key to manage your own assets and obtain economic incentives.

The Internet of Value, is it a scam or the future?

From the current point of view, the most direct attraction of Web 3.0 to most people is “making money”.

As mentioned above, in the era of Web 3.0, single users can realize and distribute value and obtain better user experience.For example, let’s start with the relatively early NFT (non-fungible token). As a derivative of blockchain technology, foreign star Curry once bought an avatar for $180,000. Artist Beeple’s digital work “Every “One Day” sold for US$69.34 million, which is also true and magical; domestic Internet leading players Ali and Tencent also joined in one after another to issue digital artworks.

The blockchain is equivalent to a distributed ledger. The creation and transaction information of these digital files are recorded on the blockchain, which means that the recording method is not only to store the ledger data in each node, but also each node will Synchronization, sharing, and data replication are realized, and the IP is printed on the chain to implement the provenance, so it is guaranteed that the works and ownership will not be tampered with.

At present, NFT has been applied to media, clothing, music, film and television and other industries, which is very attractive to creators. While realizing the freedom of creation, the same work can be re-sold every time. For buyers, NFT is very attractive. The value is reflected in scarcity and status symbols, but this is also based on a cognitive consensus of them.

In addition to NFTs, ENS (Ethereum-based Distributed Domain Name Service) has also attracted much attention.

In October of this year, the largest domain name transaction to date occurred – someone purchased the domain name paradigm.eth for 420 ETH. In 2017, the ENS log in Ethereum simplified the Ethereum wallet address of more than 40 digits. Through the bidding mechanism, any user can register the Ethereum domain name ending with “.eth”, thus optimizing the user experience of using cryptocurrency . Since ENS is built on the ERC721 protocol, each domain name is equivalent to an NFT.

In the era of Web3.0, we can get a business model that starts from the input side, crowdfunding and tokens realize the value cycle of creators. All in all, blockchain technology explains why identity is independent and provides underlying technical support for Web 3.0; NFT provides digital currency with indivisible and non-replicable transaction value on this basis, and realizes the creator economy, the latter It acts as a series of decentralized components built to maintain users’ ownership of their digital identities and data, and becomes the ark to the Metaverse.

Focusing on practical applications, taking Monaco as an example, as a blockchain social project mainly based on Web3.0 socialFi (social+DEFI) and supporting “content mining”, Monaco is known as the encrypted version of Twitter. At the beginning of its launch, the hype of invitation codes brought by hunger marketing made the Monaco market hot.

From a functional perspective, users publish valuable high-quality content on this platform similar to Weibo, and can display NFTs under their names; in addition, they participate in “Write to Earn” for mining, and they will receive corresponding rewards every week. According to the number of users’ fans, comments, forwarding and activity are proportional. Monaco wants to use SocialFi (social finance) as a breakthrough to return the ownership of data to users, and give users creative benefits, and promote the transition of the Internet from Web2.0 to Web3.0.

It should be noted that Monaco’s model is not the first. As early as 2017, the social media platform DApp Steenit deployed on the Steem chain has appeared. Users can earn Token income while publishing popular posts, which makes it also once Become the largest on-chain crypto community.

For now, the idea of ​​Web 3.0 is indeed utopian, but the actual implementation is still up for debate. 

Before entering Web3.0, you must first register an encrypted wallet, for example, find the Ethereum browser wallet plug-in MetaMask, set the transaction password after adding it, and complete the creation after confirming the account mnemonic, but the way of saving the mnemonic and the key is not very good. It is convenient (it is best to record it in kind, such as a memo); the transfer process of Ethereum is also more troublesome, not only to enter a very complicated account address, but also to transfer a long time. Even if you can apply for ENS in the future, it is not the same as the current payment Compared with software, the experience of Web3.0 is not excellent.

Due to the subsequent sharp drop in tokens, the participation of new users has declined, and Steeni, like Primas, clubhouse, etc., the descendants of the socialfi track, have all disappeared. At the end of November, Monaco officially issued a statement saying “English mining only”. This clearly differentiated tweet not only caused dissatisfaction in the Chinese community, but also contradicted the concept of “decentralization” it emphasized. Said that, on the one hand, the freedom of creation is realized, but on the other hand, the dissemination of malicious information will inevitably occur.

From a technical point of view, the high threshold for use of blockchain and encrypted applications discourages ordinary users. Even the largest decentralized application Metamask has only a few million monthly active users. On the other hand, whether it is personal data or social relations , all lead to users unable to leave the original Web2.0 platform.

Another example is DeFi (decentralized finance) running on the public chain. These products have immutable smart contracts. Liquidity mining in the DeFi field is the process of depositing or lending designated token assets as required to provide liquidity for the product’s capital pool to obtain income (native tokens or governance power). Liquidity mining is to encourage users to Deposit tokens in your own trading pool to increase liquidity to gain users and traffic, and further issue native tokens to expand the project’s community reach.

Web3.0 is a gold mine or a bubble?

Figure: “Impossible Triangle” of Blockchain Technology (Source: CSDN Blog)

Because of the high yield of liquidity mining, it was once supported by capital.

However, in the blockchain public chain, it is difficult to achieve both good “decentralization”, good system “security”, and high “transaction processing performance” at the same time. The “Blockchain Impossible Triangle”.The loopholes in the project contract code will always attract hackers and even cause assets to be stolen. During the liquidation process, network congestion, impermanent loss risks, system design and liquidation risks may all cause investors to lose their collateral assets.

Will Web 3.0 be the next outlet?

Many people’s expectations for Web 3.0 come from the more possibilities brought about by its decentralization.

Brian Brooks once mentioned in the hearing discussion, “Our digital assets on the network, all programs are built on this new network. Ethereum is the proof of ownership of the Ethereum network, which is owned by the Ethereum network. There are countless running programs, just like the programs in the collection need the underlying network to run, people will guess which underlying network will win in the end, and they will buy the tokens of these network protocols to invest, trigger the voting mechanism here, in the proof of equity Under the mechanism, you can vote to influence the future development of the protocol, and under the proof-of-work mechanism, users who maintain the network can be rewarded with tokens, and any decision on the decentralized network is made by investors.”

In 2018, Gavin Wood published an article “Why do we need Web 3.0”, which mentioned that “Web 3.0 will give birth to a new global digital economy, create new business models and markets, and disrupt companies like Google and Facebook. platform monopoly and generate a lot of bottom-up innovation.”

In order to solve the problem that Web2.0 users can use Web3.0 without leaving the familiar environment or dealing with complex wallet passwords, Mask Network, the gatekeeper of the new Internet, has successively released a series of DApplets, such as ITO (Initial Twitter Offering ) mode, this move made the Mask Network explode, which means that Internet users do indeed have an urgent need to use Web 3.0.

Looking back at the past, it is not difficult to find that since 2017, the successive investment booms of ICO, DEFI, and NFT are closely related to Ethereum, and this year’s Web3.0 and Gamefi are no exception.

After Musk angered Web 3.0, Sequoia issued a document firmly optimistic about Web 3.0. Jeff Morris Jr., founder and managing partner of Chapter One, a Los Angeles-based venture capital institution, said that at present, Chapter One has completed a $40 million early stage Fundraising for a fund that focuses on Web3.0 investments.Although Musk denied Web3.0, he did not deny its market potential. From the perspective of capital, the favorable wave of Web3.0 seems to be approaching.

Chris Dixon, partner of top VC A16z, believes that Web3.0 will go a different path. Since the value and control are not held by the company at the center, but distributed to the people who actually build the network, what Web3.0 needs is self The ability of marketing and the emergence of social media provide the impetus for the transition from Web2.0 to Web3.0. When people in the community really have some tokens to obtain economic benefits, they will actively spread in the community: on the one hand, the user churn rate will increase. lower; on the other hand, in good cases, the architecture of the network will be more robust.

But the so-called “good situation” here is also a pain point of the current Web3.0: the current technology has not yet fully realized the requirements of Web3.0, the number of participating users is limited, and the degree of sub-engineering of all production and life in the human world has not been refined. To a certain extent, AI has not achieved an absolute dominant position, and the limitations of mobile phones are also difficult to carry blockchain information and users’ high concurrency requirements, and the inefficiency and security of the transaction process cannot meet the needs of commercial applications.

To a certain extent, we really cannot predict the first successful use case of a new platform, and there is no need to generate FOMO sentiment due to the drive of capital. Whether it is Web1.0 or Web3.0, it is just that Internet technology continues to deepen. And a trend of refinement, nothing more.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/web3-0-is-a-gold-mine-or-a-bubble/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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