Happy Halloween weekend, my fellow crypto nerds! A lot more has happened since I was in your inboxes last week. Since then, CryptoCurious has grown a whopping 89%!
Well…we went from 9 people to 17 on the mailing list. Still a big jump for a 3-week-old newsletter in my opinion! As the saying goes, wagmi (we’re all gonna make it). Seriously though, thank you to everyone who has signed up, read my posts, and shared this newsletter for the past few weeks. You lot have made my week.
Some more big news…I’ve started a Discord server for the CryptoCurious community! It’s not much of a community yet, but I want it to be! There are so many cool people in this space, it’d be a shame to not have resources for you all to learn more. Keep in mind, there are no experts in crypto. Everyone’s still learning. (I got that from this guy; he’s cool)
So, if you want to join the CryptoCurious Discord, you can join all 5 of us over at discord.gg/KuRh4bBQ. Can’t wait to see you there!
Now, on to the newsletter 👇
Before getting into this: I know there’s a difference between the World Wide Web and the Internet, but for this newsletter, I’ll use them interchangeably.
Web3: Wait…there are 3 of them?!
Yes, friends. We’re talking about Web3. And no — there aren’t 3 different internets; that was just clickbait. There’s still just one, but there are now three different iterations of it. But that’s probably still confusing, so let’s dive into what those iterations are and how they manifest.
…but first. It’s important to remember that there aren’t 3 distinct time periods called “Web1”, “Web2”, and “Web3”. That’s something of a misconception. In reality, these iterations of the web happened (and are happening) very much like versions of a program. It’s much more helpful to think of them as 1.0, 2.0, and 3.0, each with different sets of features and functionality.
Web1, or 1.0, was a very static kind of web. You could go to a website, click around, explore some pages, and that was all. People often describe it as read-only. Some examples of Web 1.0 websites would be aol.com and yahoo.com.
Fun fact: those link to the 1998 versions of the websites!
Web2 on the other hand was and is very interactive. If Web1 was read-only, Web2 is read-write. I.E. you can interact with a website in meaningful ways. Examples of these kinds of sites are youtube.com and twitter.com.
So what’s Web3?
Because of how the internet has evolved over its existence, services like websites, hosting providers, and companies have become centralized. Meaning they can do whatever they want, whenever they want, however they want. They can censor anything they don’t like or promote anything they do like. It lends itself all too easily to the biases of those running the services.
This has been a huge problem lately, with companies like Facebook (now Meta) making changes to their algorithms without regard for the consequences.
If you recall last week’s edition (here), the blockchain has enabled a true consensus-based system where anyone can have a say in how things play out. A collection of nodes on a network each have a vote, and without a majority vote, nothing can happen.
This is the idea Web3 is built on. Web3 is a user-owned internet where every single person can have a say in the state of the network.
Let’s take an Ethereum DAO (Decentralized Autonomous Organization) for example. In a DAO, there’s no “CEO”. You can still have the founder/founding team, but there’s no leadership or head of the organization. The entire thing is based on something called smart contracts stored on the blockchain.
Smart contracts are very similar to legal contracts, but are written in code and executed automatically.
Explaining Web3 with DAOs
Let’s say you and I are in a DAO with the mission of teaching as many people as possible about crypto. For the sake of time, let’s say all of our mission and values stuff has already been verified on the blockchain, so we have to hold ourselves accountable to staying as close as possible to those things we agreed on.
I come along and propose we use the DAO’s funds to buy a CryptoPunk. I go through the process of submitting a proposal for a vote and put it up. I reason that if we buy a CryptoPunk for the DAO, then we can use it to teach other DAO members about NFTs and what it’s like to own one.
You and the other DAO members look at me and think “is he serious?”
You all vote against me and it doesn’t happen. I’m bummed because I couldn’t get ahold of that CryptoPunk I wanted, but I’ll be fine. We all go about our lives and the DAO saves millions of dollars worth of Ether.
But what if that were at a company?
You and I are now in a large corporation where I’m the CEO. Our company has the same mission and values and I want to buy the same CryptoPunk. Instead of going through the process of making a proposal, I simply go to the owner of the CryptoPunk and buy it from them using the company’s funds. Millions of dollars down the drain for an NFT I wanted for myself.
The board finds out, fires me, and brings in a new CEO. The fiasco is all over the news and the company’s reputation is tarnished. But the damage is done. Using my power as the CEO, I spent millions of dollars on something I wanted for myself. No one else at the company would’ve allowed that!
This is the essence of Web3. Instead of central authorities, decentral groups control everything based on the good of the whole. There’s not much reason for a bad actor to come out of nowhere and act in their own interest.
What can Web3 enable?
I recently listened to a fantastic podcast by Tim Ferriss about this exact idea. He talked with Chris Dixon and Naval Ravikant about Web3 and its many uses. I highly recommend you check it out. The gist of the episode was that Web3 enables those who have been screwed over by the internet to now take advantage of it and earn a real living.
If you remember the NFT piece I did a few weeks ago, I talked heavily about art. Art is currently the most bubble-y thing in crypto (second only to SHIB, I’d guess) because of the ease of access to collectors, investors, and artists alike. Using OpenSea.io, anyone can buy or create an NFT in about 3 clicks, provided you have the Ether to pay for gas.
Taking an app like Instagram for example, creators are paid $0 to create very high-quality content. Yet Instagram makes billions of dollars per year advertising to users who come almost exclusively for content that could very easily be considered art.
In Web3, an artist can take a picture or make a painting, upload it to OpenSea, and be making real money as soon as someone finds their work even mildly interesting.
The same goes for music. If a musician writes a piece that a superfan deems worth $1 million, the fan can buy that piece for $1 million and the artist goes from starving to wealthy overnight.
These are, of course, edge cases. Very few people will become millionaires overnight. But I still find this whole thing incredibly exciting. Web3 will enable so many new ways of doing things that we can barely even imagine what next year is going to look like, let alone 5 years from now. Isn’t that cool?