What the hell is Web3?

Web3 is a very fashionable term in 2021, mainly for alternative financial cartoon characters (alluding to the big V of the financial circle whose profile picture is a cartoon NFT) and the super V of the technology industry.

It is one of two cheat code phrases that you can use to bypass LP’s critical thinking when raising your first fund in 2021, and the other is “Metaverse”. Congratulations, you now have a $1 billion valuation that can get dry, because you have learned this buzzword, plus you have a good education, then Good Luck Have Fun.

What the hell is Web3?

Although today’s monopoly investors have published a large number of featureless thought articles for market brainwashing, no one can really define what Web3 actually is. It depends on which circle you belong to. Is web3 a scam?web3 is the future? Is web3 tokenizing the world? Does web3 make VC exit more liquid? web3 is just another name for cryptocurrency? You know what I’m talking about. Even the cryptocurrency community cannot judge whether Bitcoin is web3.

What the hell is Web3?

What the hell is Web3?

If no one really agrees on what web3 is, and the word has only become a buzzword in the past six months, I think it can be concluded that web3 does not really exist yet. However, it is clear that there are many ideas and experiments that continue to go out of the circle during the process of fusion. These ideas and experiments arouse inspiration, creativity or complete disappointment among the observers.

What is the meaning of web3?

In order to avoid accepting the uselessness of this kind of argument, instead, think about what web3 might be more useful? Do we need to reshape from web2? Or is there any specific problem that web3 needs to solve?

There are two topics that I think are important:

  • Decentralization of power-people are increasingly distrustful of centralized power. Whether it is the government, the central bank, or the global omegatech company, they have become stronger than the country. The trends of decentralization, behavior authorization, and censorship have created a new interest in building trustless and censorship-resistant platforms that can empower ordinary people and divide existing power structures.
  • Value ownership–With the advent of Web2, the network has changed from “reading” to “reading and writing”. The web has become social and participatory; the era of user-generated content has begun. Modern technology companies host content from users and then monetize it privately. They use our desire for social interaction, compound it with addictive product models, weave advertising, and extract all these user-generated value for shareholders. When you can become a shareholder of these companies, their valuations have reached billions, and insiders have already made a fortune.

An open and fair network

I understand the excitement of the supporters.

An idealized future network may be able to solve these problems, not only make a positive contribution to these social problems, but also enable founders to have powerful growth and retention tools to compete with existing companies.

We can build a network that allows users to share the value they create and enhance usage scenarios. In such a network, most technology-driven managers will not decide what we are allowed to talk about, or how many advertisements we must watch every day.

Maybe it can empower ordinary people who have spent thousands of hours working as batteries for large companies, whose attention is harvested for private shareholder profits.

Maybe the network can become more cooperative instead of squeezing.

Everything will vanish

Perhaps more, I understand the fear of critics.

A pessimistic future network may be full of tokenized microtransactions, seeking rent on all possible user behaviors, and requiring users to own the project’s tokens to properly operate their “toaster (generally referred to as SCP-426, no Do more explanations, you can Baidu by yourself)”.

It may be a network built on selling worthless ERC20 to retail investors to fund failed projects and extract value more directly than spending a few years selling advertising.

It may be a network that lacks supervision and is difficult to deal with evil behaviors such as harassment or child abuse.Online crime has become more difficult to prevent.

Perhaps all financialization can only benefit the complex algorithmic hedge funds and the huge early giant VCs, who become the main owners of these tokens in the private seed round.

Which way to go?

If you can imagine an expectant future and a utopian future at the same time, I won’t blame the one you most anticipated most likely to become the worst reality. Obviously, modern enterprises often make the Internet more… annoying. Cookie permissions, gdpr requests, banner ads, paywalls, grabbing games and selling skin & equipment games or krypton gold games-it is easy to expect sub-optimal or anti-user changes.

And if you look at cryptocurrency from the outside, outsiders really can’t blame you for seeing something very similar to a scam. The wealth effect promotes the prosperity and arrogance of market participants, while the self-satiric nature of cryptocurrency culture is alien to non-locals.

I understand. It used to be bad sometimes, and now it is also bad, so the urge to reject ideas that you can poke holes in the theory is very strong. You don’t have to bother to imagine the ways in which a decentralized system might be used, and you don’t have to look far to find examples of ordinary people being used by token projects.

But at the same time, you don’t have to look too far to see the power of ownership and self-governance in the existing owner-operated system.

In ten years, Bitcoin has changed from “dark web drug money” to an institutional-level store of value asset without the guidance of a central agency.

Ethereum has evolved from a “techbro Ponzi scheme” to a large-scale owner-operated network, transacting billions of dollars in funds every day.

Enterprises, users, and third parties have contributed to the incremental value creation of these two networks, and the rewards of doing so have been shared among them. Anyone can participate, and value can be given back to them, not just the founders or financiers.

Even a purely interesting social consensus project like ConstitutionDAO (Constitution DAO) may be an example of user-generated value creation being shared among all people. Although it failed to bid for a copy of the constitution, the constitutional DAO became more valuable, and this value accumulated in the participants.

Perhaps this shared ownership can become a mandatory function, breaking existing conventions about how technology companies can or should operate.

Inequality

The rise of inequality has become more and more obvious. During the COVID-19 pandemic, asset prices skyrocketed, and people who were already wealthy became richer. At the same time, small businesses are struggling, and the working class almost immediately ran out of their stimulating cash. Obviously, more than 50% of Americans have less than 3 months of emergency savings.

Wage growth has almost stagnated, but in the past 40 years, the cost of housing has risen by more than 400%. People have begun to feel trapped in a system that is not good for them, and the opportunity to afford the future they want is quickly slipping away.

No wonder the number of RobinHood retail options traders and Dogecoin buyers will increase. For those who fail to see their financial goals achieved through savings and investment, lottery investment has become a viable option.

Perhaps a more socialist equity or token ownership model can serve as a capitalist response to universal basic income.Rather than let the state print a little cash for the family and levy taxes on future generations to pay this generation, maybe people can create a fairer world by sharing the wealth they create.

If users vote with their wallets to choose companies that will allow them to be rewarded for the value creation they have already participated in, these companies will find huge network effect tools that will quickly grow and overthrow incumbents. Real people can choose to own part of the value they collectively create instead of giving it up to founders and investors.

If all other conditions are the same, then users who provide two identical services will be incentivized to use one of them, and the value of it will be given back to them.

Perfect idea

When Bitcoin was created, it was another perfect concept. Satoshi Nakamoto provided what might prove to be one of the most important creations in history, and provided it to the world on fair terms, allowing everyone to participate. They did not take the share of the tokens privately, nor did they give it to any private investors. They mine their tokens on equal terms with all other participants. Yes, they have mined millions of tokens because they are early participants, but they don’t have more advantages than others who know Bitcoin.

When Ethereum was created, they pre-mined the tokens and held an open and freely competitive ICO. They sold 60,000,000 ETH to anyone who wanted to participate. The price of Ethereum is approximately $0.30 per ETH. The founder of Ethereum did reserve some tokens for himself and the Ethereum Foundation. V God, the founder of ETH, is also the largest prepayment recipient, obtaining less than 1% of the entire ETH supply, which is a fairly small ownership share compared with traditional stocks.

Although the establishment of Ethereum is slightly “fair to everyone” compared with Bitcoin, it still has a relatively fair and open participation model. Throughout 2017, ICOs replicated this model, but with pre-sales and private sales to insiders, they began to degenerate.

By 2018/19, fair terms of free competition among participants became a thing of the past. The US Securities and Exchange Commission enforces the enforcement of ICO projects in an attempt to protect retail investors. Regulatory pressure and lack of clarity have caused cryptocurrency builders to raise funds privately from venture capital firms rather than the general public. It is no longer possible for non-insiders to buy on the early cheap terms that VCs can now buy.

You can pay attention to the trend of the transition from a freely competitive and fair startup network without founder rewards to the privatization proceeds with a large number of VC funding distributed by the founders, and be very pessimistic. It seems that the purity and beauty created by Satoshi Nakamoto has been corrupted by greedy people.

But the truth is that cryptocurrencies are very popular now. When Bitcoin was launched, it was not obvious to many people that cryptocurrencies might have value. Bitcoin proved that it can be very valuable. Ethereum intensified this belief.Although Bitcoin’s rise can only see the 10-year K line on the icon, it does attract a lot of capital seeking risk.

When Satoshi Nakamoto launched Bitcoin, the difficulty of mining was very low, and people were able to mine 50 BTC block rewards with personal computers. The undiscovered nature of Bitcoin makes it a wealth accumulation tool for hobbyists rather than a playground for hedge funds. If a project tries to launch in the same way today, the already wealthy will simply take over all the hashes and accumulate all the tokens to pay the electricity bill for the share of this new project.In such an environment, the founders might as well sell them directly to ensure long-term funding.

I prefer to open sales to everyone under the same conditions, but I understand that founders do not want to take unnecessary regulatory risks, so dealing with professional investors is easier and generally cheaper. Not to mention the abusive vectors and most ICOs in 2017 have gone to zero.

If some people can make a fortune while building the future, this is very important, right?

I don’t think anyone will argue that V God does not deserve to own 0.7% of the supply of ETH because of his contribution to Ethereum. I don’t think anyone would think that Satoshi Nakamoto’s 1 million tokens were unfairly mined.

However, it cannot be ignored that the biggest supporter of web3 is the successful venture capitalist in history, which is ironic. Yes, not surprisingly, these entities are trying to become superfinanciers in the economy owned by this apparently utopian shared community by buying majority stakes in a discounted seed round.

It is also impossible to ignore the cash-grabbing founders and investors using existing market dynamics to create behemoth bull market projects to enrich themselves.

Therefore, I think four points are true:

  • It is unanimously agreed that the founders deserve to be rich when they create great value for the world, and they are also worth looking forward to.
  • There is a rough consensus that venture capital companies or angel investors fund something in the early stage to provide services, and when the things they fund create great value for the world, they should be rewarded.
  • Many people believe that these financing opportunities should be open and fair, rejecting the existing accredited investor rules, believing it is too patriarchal or counterintuitive (yeah, now we can buy top-notch things from VCs!).
  • Everyone absolutely fucking hates founders or venture capitalists from getting rich from things that don’t contribute any value to the world.

It is undeniable that the latter’s barrage is now prevailing in the cryptocurrency industry. Many CEOs of early products have become billionaires overnight by launching tokens and making some promises about NFT-driven chain games, or establishing a “web3” platform that attracts only double-digit active users.

all in all

Web3 does not really exist yet. However, assessing its value in a super-abundant bull market may be a kind of harm to it, and likewise, ignoring these market dynamics is also dishonest.

I think the world’s social problems and web2 problems are effective and worth solving. In the promise of web3, there are many exciting things to consider.

I think that an open, transparent, and permissionless system that replaces trusted central institutions is good for the world, and can rebalance and decentralize power.

I hope that the financial prosperity of the cryptocurrency market can attract smart minds and no longer sell ads to people, but to build a more fair and cooperative future.

However, if the founder of cryptocurrency is too rich to care about technology, and a new network is established by late-capitalist greedy people, letting you buy a piecemeal micropayment NFT on Cardano to operate your electric toothbrush, I Will not be surprised.

postscript

I know I was tempted into a philosophical and rather powerless debate. They are all tech billionaires who got rich in the Facebook era. To be honest, the outcome of their debate is not important, because they are no longer future adventurers and builders. Maybe they are financiers, but their power-law curve model already assumes that they will make more mistakes than they are correct.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/what-the-hell-is-web3/
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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