Top 5 Concepts to Help Your Parents (or you) Understand Web 3.0
This is post 2 of 4 for the Bankless DAO writers’ cohort.
Let’s be honest: For many people (myself included), Web 3.0 can be a complex topic, especially for those with little to no knowledge of space. Even for those who think they “understand” it, I bet there are times when people ask you questions about Web 3.0 (cause they are genuinely curious), and you don’t know how to respond (myself included, again).
This situation happened to me the other night when I was at a family friend’s house for a delicious meal of steak, pasta, salad, and the freshest baguettes outside of France. The table conversation got around to me and what I was working on, and I got ambushed with critical questions about Web 3.0 and was given little to no time to respond. Although I could convince the table about some use cases, such as remittance payments, I was getting grilled as much as the steak I ate that night (I wasn’t well done, but definitely at least medium).
When I got home, I asked myself, “what are the main concepts and ideas I should nail down to help someone understand Web 3.0?” Thus, this blog idea was born. So, whether you are a Web 3.0 native trying to convince your Karen mom that this stuff is revolutionary, or if you are a newbie who is genuinely curious and wants to learn more, here are five concepts to better understand Web 3.0:
The Three Stages of the internet
This concept is where the idea of “Web 3.0” I routinely mention comes from. Since Tim Berners-Lee invented the World Wide Web in 1990, there have been three versions of the internet:
Web 1.0 — Read (The Information Economy)
- Went from the ’90s to the mid-2000s; most Millenials and Gen Zers won’t know/remember this, but parents will (unless you are on TLC’s newest season of Unexpected)
- In this stage, web pages were just information put online to read (like a library)
- No way of interacting (i.e., no posting, sharing, commenting, etc.)
- This version of the web was decentralized and open-source (anyone could build on it)
Web 2 .0 — Read & Write (The Platform Economy)
- From the mid-2000s to the late 2010s (and still thriving today)
- Allowed anyone to publish content on the internet, even if they had no technical skill (i.e., coding)
- Helped spawn popular products like Facebook, Twitter, Instagram, and less popular things like this blog 🙃
- The web became much more centralized, with major corporations such as Facebook having a monopoly over the internet and user data
Web 3.0 — Read, Write, & Own (The Ownership Economy)
- Started with the creation of blockchain in 2009 through Bitcoin but came onto the scene in 2018
- Digital ownership and scarcity are possible for the first time
- The web becomes decentralized again, giving power back to the people
- Users own their data and can profit from it instead of companies
Peer-to-peer transactions
Peer-to-peer transactions are not something native to Web 3.0; it has existed since the dawn of humans. All peer-to-peer means is two or more parties interacting with one another without any intermediary. An example could be as simple as me handing you a $20 bill. The exchange went from me to you, with no one else involved.
However, the peer-to-peer concept has not been a prominent part of our lives for quite some time, especially on the internet. If I were to send you $20 via the internet today, I would most likely use Venmo. However, this transaction would not be peer-to-peer, as we would rely on Venmo to push the transaction through. In Web 3.0, all the interactions on the blockchain are between people, without any third-party intermediaries involved.
Trustless
A trustless system is an idea that you don’t need to trust any third-party intermediaries to operate. Think of the previous example:
- Handing you $20 is trustless.
- Venmoing you $20 is trusting Venmo and my bank to perform that function
To take it one step further: where do you keep most of your expendable money today? Unless you are former Louisiana Congressman William Jefferson, your answer is probably your bank. With Web 3.0, you can have self-custody of your money without trusting a bank to securely store it for you since you can securely store it on the blockchain.
Permissionless
A permissionless system is one with no gatekeepers, meaning anyone can access it (as long as you have internet access in Web 3.0’s case). Anyone can create a digital wallet that gives someone access to the blockchain, and no one can limit a person from using the blockchain network itself. Here is an example:
- People with bad credit scores don’t have access to bank loans, which makes sense because banks are scared those people won’t pay back
- In Web 3.0, you can get a loan from a DeFi platform where the underlying smart contract controls whether you get liquidated or not (i.e., if your collateral decreases below the agreed threshold, your position will be liquidated)
Creator Economy
In this world, those that create content (musicians, comedians, artists, etc.) get funded directly by their audience instead of extractive middlemen like music labels, recording studios, publishers, and more.
The creator economy is not new to Web 3.0. Creators use platforms like Instagram, Youtube, Twitch, and more to make content for their fans. However, on these platforms, the cost of viewing this “free” content is being fed advertisements catered explicitly to you based on the data these tech giants have on you.
In Web 3.0, the creator economy is different and, in many ways, better. Creators have complete independence from third parties, 100% data ownership, and self-sovereignty to create whatever they want without the fear of being demonetized or banned. In this world, creators make money through authentic creativity instead of ad-driven content, thus making better products for their fans.
Also, in a Web 3.0 world, the creator’s earliest and most prominent supporters can share in the creator’s upside. For example, the Chainsmokers recently released an NFT project where owners of the NFT receive a cut of the royalties from the album. The possibilities that Web 3.0 enables for creators are endless and can change how we interact with entertainers as we know it. Here is one idea about how Web 3.0 can change how we make and fund movies.
If you got this far into the blog, I am glad I didn’t bore you to death. After reading this, do I expect you to be an expert in Web 3.0? Absolutely Not!
However, I hope I supplied enough knowledge so that you won’t immediately shoot the topic down at the dinner table or make you curious enough to explore the topic further. In that case, I will consider my job well done (callback joke…check).
If you fall into the latter group and want to learn more about this topic, feel free to comment on this blog, or if you know me, just hit me up, and I’ll help!
