Web3 is an internet owned by users and builders orchestrated with tokens - Chris Dixon @cdixon
A few months ago, I became really interested in NFTs and Web3, and I began exploring the space. Then, in October, the CEO of the company I work for wanted me to write an article on the rise of Web 3.0, and I dived headfirst into the space. Over the last few months, I have learned a lot and leveraged that knowledge to earn thousands of dollars in side income.
However, at the beginning of my journey, it was really hard to find reliable sources that were easy to understand.
I ended up binge-watching several crappy youtube videos, diving into obscure Twitter threads and random message boards to understand what Web3 is about and how it can change the world. While I do not claim to be an expert, I decided to pour everything I’ve learned about Web3 into a resource that hopefully gives other people a headstart.
Note: I am not an expert in cryptocurrencies, blockchain tech or any other related fields. I am simply sharing my thoughts as I was able to synthesize them. None of this should be construed as financial advice of any sort.
As always, please DYOR and make the best decisions that suit you.
In this first article of a 2-part series, I’ll be sharing on:
Web3.0 and the evolution of the internet.
The unique position of NFTs in this new ecosystem.
Web 3.0 and the evolution of the internet
The internet didn’t start the way it looks today. We’ve had three major shifts, which are:
Web 1.0 (1990 - 2004): This was the first iteration of the internet, and it was primarily read-only. You couldn’t do much online apart from reading already generated content. This era was characterized by a few creators and some consumers.
Web 2.0 (2004 -2020): This is the version of the internet we’re familiar with. Social media, web apps, and the cloud are all features of this iteration of the internet.
Web 3.0 (2020 to date): This is the latest version of the internet. It’s built on the blockchain and is open, decentralized, and secure.
Each generation had a problem that the next generations have tried to solve with new technologies. So, Web 1.0, for example, was boring and uninteractive, and Web 2.0 attempted to solve this. Behind the transition from Web1 to Web2 and now, Web3 was the advancement in the underlying technology. This is fundamental to understanding the evolution of the internet. As more innovations are adopted and become mainstream, the structure and fabric of the internet, and the world, continued to change.
Three main technologies marked the move to Web 2.0: Mobile, Social, and Cloud. Mobile put the internet in your pocket and made it more accessible, social connected you to your friends and made the internet more interactive, and cloud made data management easier. The main problem with Web 2.0 is centralized control. Companies have way too much power over the value created and shared on their platforms. Companies like Facebook and Twitter make billions off our data and the value we create, giving almost nothing in return. Your account can be banned at any time, and you don’t really control anything on these platforms.
This is what Web3.0 is fixing.
Built on the blockchain and other technologies like AI, IoT, and AR, Web3 is pioneering an open world, where creators and users have more control over the things they create and share. Web3 is much bigger than just NFTs. It encompasses cryptocurrencies, DeFi, GameFi, the metaverse, and many others.
How NFTs work
One of the most significant features of cryptocurrencies and blockchain technology is that its open, secure, and unchangeable. Any transaction made on the blockchain CANNOT be changed or edited ever, and it’s open for everybody to see.
NFTs are similar to other crypto tokens except for one significant change. They are Non-Fungible. This means that they are not replaceable. Other crypto tokens act like currency because they are fungible - the ability to be exchanged for another one of the same type. So, 1 BTC in my wallet is not different from the 1 BTC in your wallet. Also, I can decide to spend 0.001 BTC out of the 1 BTC if I want to.
An NFT, or Non-Fungible Token, on the other hand, is the only one of its kind. It’s unique and cannot be exchanged for any other one. It’s like Messi signing a shirt and giving you. It becomes unique because of that signature, and there is none else like it. It’s one of a kind.
The process by which NFTs are created is called minting To mint, you take a digital file, like a picture, a song, or anything, and encode it on the blockchain. This acts like a digital signature showing that you own that digital asset. So, that piece of art becomes digitally signed, and it’s yours, and you’re the only one that owns it. It’s like a famous painter painting something then signing it. That makes the painting valuable, even if you make copies of it.
This is what is the most confusing to most people.
What makes a simple picture valuable? Can’t I take a picture of it and download it to my phone?
I’ll answer with this: What makes the original copy of the Mona Lisa that’s in the Louvre so valuable. You can download a simple picture of it online, can’t you?
Simple, you don’t “own” it, you only have a copy of it. The implications of NFT technology now mean that artists, and anybody really, can create any piece of digital art, mint it on the blockchain and earn royalties on it.
But there are so many possibilities.
Because of their uniqueness, NFTs can be used as a secure key.
For example, imagine your voter’s card being an NFT. You’re the only one that can access it, only you can use it. It can never be altered or manipulated. What of school results? Concert tickets? The same way many physical tickets are now QR codes is the same way they will become NFTs in the future.
This is why I am most excited about NFTs and its potential. Not necessarily for the hype flying around. That will die down real soon. I’m talking about the long-term implications of a unique digital key that is personalized and can be used by only you.
That is the future. Not necessarily monkey pictures or cat memes.
So, to recap on tonight’s session:
✅ The internet has gone through multiple iterations, and we are currently in Web 3.0.
✅ Web 3.0 is about giving control back to users and creators rather than platforms. It’s about authentic value creation and sharing.
✅ Web3 is built on the technology of the blockchain and has multiple uses, like cryptocurrencies, DeFi, GameFi, and NFTs
✅ NFTs or Non-Fungible Tokens are called so because they are tokens created on the blockchain that are unique, irreplaceable, and unchangeable.
✅ NFT technology can and will change the future because it allows anyone to prove ownership of anything in a way that can’t be doctored or manipulated.
In part 2, I’ll explore what makes NFTs valuable and how you can start making money from this remarkable technology that can and will change the world.
See you soon!