Web3

Backstory

In 1991, I started using the Internet through CRWU's freenet. In 1994 I started my first web venture; my business card read, "Welcome to the Internet. The natives are restless." It was a reference to how commercialized the Internet was becoming, on the same card I used to seek contracts for website development. My passion, then and now, was the individual making their own reality on a peer-to-peer network.

I became a full-time database-backed dynamic website developer in 1996, moved to Manhattan in 1999 working for a startup. Lived in Seattle, San Francisco, and Phoenix. Worked for startups, Apple, Amazon, and a few others. I have watched the peer-to-peer network promise of the Internet turn into a wasteland of corporate silos that pay lip service to openness while creating barriers to entry, proprietary networks, and walled gardens.

I am not a kool-aid drinker about Web3. I'm an old-school hacker who has believed in the promise of decentralization for three decades, and sees Web3 warts and all. It's not a magic solution, but it has tools that are useful to rebuilding a healthy ecosystem for those who care about what the Internet is intended to be.

My brother and a number of my friends are bankers (active or retired). Two of them and I bought Bitcoin at 3.5, and sold out, for the most part, along the way. I've had skin in the game and have followed cryptocurrency, along with finance professionals, since the beginning. I am far from an expert, and far from a novice.

For more than a decade, I have primarily focused on data engineering and data science. I think those two fields combined with Web3 are going to write the next major stage of our evolution toward the singularity. I am learning about smart contracts and DAOs. The possibilities they open up hold extraordinary power, especially when combined with machine learning.

I am strapping in to a Curtis Jenny in 1921, heading out across the country, and seeing what happens next. It's the beginning of the Roaring Twenties and there is at least one 1929 coming.

It beats sitting on the sidelines.

Baseline

Web3

Decentralization is the central theme of Web3, and is otherwise a loose collection of many people's interpretation of what that means. The direction of Web3 is, itself, decentralized.

Most of the leaders in the space come from a cryptocurrency background. As such, the blockchain looms large in a lot of their proposed solutions. Some have pointed out that this is a narrow perspective that ignores existing decentralized solutions like Git. Another example is Web3 people flocking to Discord and agitating for it to integrate blockchain. The rather obvious counterpoint would be [Element.io], [Jitsi], and [Matrix].

But I digress. In short the leaders tend to overindex on blockchain, but IMO that leaves space for more clearheaded folks to bring in better solutions. There will be a lot of radical experiments, but there will also be a place for turning the Rube Golberg contraptions into more pragmatic solutions.

The main targets for decentralization are communication, transactions, organization, and identity. The goal is to decouple those from any single authority - government, corporate, or otherwise. This includes de facto centralization, like AWS, even where their services are based on Open Source.

Cryptocurrency

Bitcoin is the canonical example. Other currencies are getting more cost efficient, which is closely related to the environmental problem with Bitcoin, Ethereum, and other Proof of Work currencies.

The main alternative is Proof of Stake, which is employed by [Cardano]. A newer currency with still lower fees than Cardano is [Solana], which mixes Proof of Stake and [Proof of History] (I haven't grokked it yet).

In short, cryptocurrency is decentralized money that is currently pretty expensive to transact but getting cheaper. It is questionable as a stable store of wealth, and is not pervasive enough to be an easy transactional currency - but the lack of dependency on any government opens new possibilities that are only beginning to be explored.

NFT

Cryptocurrency is inherently fungible. A single bitcoin can be chopped up, passed around, mixed, and glued back together without any change in its value.

NFTs are non-fungible. Each token is unique and its value is intrinsically linked to its ID. Transactions involving it are recorded on the blockchain to create a decentralized public record, but they cannot be divided, swapped, or mixed.

Smart Contract

A smart contract is a piece of computer code that is connected to a blockchain. When it is triggered, it autonomously executes pre-defined transactions. For example, you could write a smart-contract that would move cryptocurrency from one account to another depending on which team wins the Superbowl.