As the world looks towards the future, buzzwords from the blockchain and crypto industry are taking over. Technical terms that are confusing and frightening to the ‘uninitiated’ (and even many of the ‘initiated’) are all over your social channels. If you’re getting too many “Smart Contracts”, DAOs, NFTs and tokens lately, it’s a sign of a new era that’s coming and one you don’t want to miss out on.
What are you talking about?
If you’re any degree of ‘curious,’ you most likely have a rough idea of what each of our focus buzzwords means. However, in the hope of helping you better understand the link between these words, here are the main definitions.
1. NFTs (or Tokens in General)
By and large, tokens fall into two broad categories: fungible and non-fungible. Fungible tokens are essentially interchangeable for one another and are most often compared to fiat such as dollar bills. Let’s use bitcoin as an example. When you trade your bitcoin for another bitcoin, you get the same value of bitcoin.
Non-fungible means that the token is unique and can’t be replicated. However, non-fungible tokens are one of a kind. Essentially, an NFT is a digital asset you own, proving ownership of either a physical or digital object.
2. DAO
DAO translates to Decentralized Autonomous Organizations. DAOs are communities built and revolve around a shared collective common objective, governed by consensus. DAOs are more like technically horizontal leadership structures where participants together set the smart contract conditions.
3. Web3
Web3 is the next generation of internet powered by decentralized public blockchains. It does not require a centralized authority in the middle as a service provider and can operate completely trustless. The best example of a
Web3 right now is decentralized finance or DeFi, but there are countless possibilities. Experts, enthusiasts and developers all agree that the future of the internet will be powered by blockchain. This will include not only finance, but also social media, products, services, etc.
How do these three come together?
Trust
Trust has been a major issue in the current state of the web. The multiplier effects of trust serve as an incentive that has fueled the redefinition of internet realities the world is witnessing. Unfortunately, the centralized internet infrastructures of web2 lost the trust of users. As a result, data breaches, data sales, hacking, etc., plague the current internet. Now, because blockchain and its tools NFT, DAO and Web3 — are technically infallible, humans have the potential to repair the trust that had been broken in Web2.
NFTs can only be accessed with a password or personal key. However, the security, safety and trust in the blockchain system means that you, as an owner of an NFT, are the only one with access. On the other hand DAO places its trust in smart contracts. Once a set of conditions have been met, the response processes get initiated intiutively.
Lastly, Web3 is decentralized. No big corporations are selling users’ data amongst themselves. Users can create their platforms. The decentralized nature of Web3 builds trust.
Interactions
NFTs, DAO and Web3 have an ‘inclusion drive’ in common. These concepts make it possible for everyone to be a participant and get rewarded for it. The incentive-driven platforms go on to have ‘fostering of inclusion’ as a side effect. No one feels or is left out. Anyone not feeling included is simply stacking the gains of their own choices.
Communities and Companies
NFT projects are fostering the creation and success of communities. NFTs are achieving this, especially through DAOs. Independently, thanks to Web3, DAOs are also birthing communities of people passionate about their respective interests. Moreover, sharing interests as a community has become easier due to DAO infrastructures.
Web3 makes it possible for numerous communities to exist both exclusively and inclusively of each other. For example, thanks to Web3’s token economies, financial value can be shared within a certain DAO community (exclusive). In the same vein, different DAO communities can enjoy trade agreements at will, which Web3 can seamlessly power.
The path to Metaverse
Where does this all lead to? In my opinion, this is all an important sandbox for the age of Metaverse.
With NFTs being the content layer, DeFi being the operations/tx layer and DAOs being the organizational/communities layer, we’re moving closer to a virtual world where our digital avatars connect through work, travel or entertainment.
If you think this space is exciting now, get ready for the future — and more buzzwords!
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About Clout.art
Clout.art powers the creator economy of the future by turning the most valuable content, such as your most successful Instagram posts, into unique NFTs. As a microservice, a marketplace, and a staking platform, Clout.art is where creators and fans come together to create, grow or exchange social capital through the $SWAY token.
