There is a willingness in this world for people to adopt new things because they are told to do so. There is also a willingness for people to sit back and let the course of human evolution be decided for them.
Who said that merging with AI is inevitable? It’s only inevitable if we decide to do it. If we made a collective decision to start picking berries and hunting deer with bows and arrows, we could do that, too.
The idea of inevitability has been programmed into us. It’s form of brainwashing. Nonetheless, as a society, we are on the precipice of a revolution – a change so big that it could irreversibly alter the very structure of human society and the way we form relationships, as well as completely redefine the nature of transaction and exchange.
Yes, I’m talking about the “metaverse”, the blockchain, decentralised cryptocurrencies, and the thing that started it all – Bitcoin.
But to understand how all of these things fit together, it’s necessary to first examine “Web 3.0” – what it is, how it’s being marketed and how it will affect us.
Web 3.0: The Next Iteration of the Internet
Unless you work in tech you’ve probably never heard the term “Web 3.0” before (also written as “web3”).
To understand web3, a quick history lesson is in order: When the internet was first made available it was “read-only”, in other words, it made information available to the public but in static format; regular people did not have the know-how to publish new content, as this required technical expertise and deep knowledge of code. This initial form of the internet, we will call “web1”.
The next iteration of the internet, which we experience today, allows regular users to both read content and publish it. With “web2”, the internet became interactive, paving the way for the creation of social networks, allowing users to connect and create.
The problem with web2 is that information is controlled by central authorities that collect and productise it. In exchange for the ability to create, we’ve allowed large corporations to establish ownership over our personal data.
That brings us to “web3” which seeks to solve the problems created by web2 while also providing the infrastructure for new, disruptive technologies.
The idea is that “Web3” will be:
Decentralised (i.e., no organisations will control your data);
Permissionless (anyone may access the network);
Uncensorable (content that’s been published cannot be altered or removed);
Monetisable (creators can be paid for the value they create, without a middleman);
Private (identity is encrypted and anonymity is optional).
Sounds good, but how will this be achieved? The idea is that the internet will be rebuilt so as to restructure it around blockchain and cryptocurrencies.
You see, money is an age-old medium of exchange that has been in use for centuries. In fact, the concept of money hasn’t changed much over time, although it may be physically different than it was in the past. But up until now, money has been absent as a protocol that forms part of the internet.
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This will change with web3. The idea is that by integrating money into the structure of the internet itself, we can rid the online world of invasive advertising that relies on the mass collection of private data as well as shatter the power of authoritative, big tech monopolies.
“Web3” will see the internet undergo a massive restructuring, and it will be built on the following 4 “layers”:
1. The Blockchain (the Base Layer)
Underlying everything on web3 is the blockchain: a shared ledger run by a decentralised network of peer-to-peer nodes (the same technology that powers Bitcoin and Ethereum).
The blockchain is not owned or controlled by anyone and it cannot be found on a single server. Rather, copies of the blockchain are stored across thousands of participants on the network. Think of it like a decentralised database of transactions.
However, in order to maintain consistency, security and objectivity, each node (participant) much reach an agreement about the network’s current state. This agreement is achieved algorithmically using a consensus mechanism, such as proof-of-work or proof-of-stake.
Proof-of-work (PoW) is done by “miners”, who compete to verify new transactions and add them to the chain as “blocks” (hence, blockchain). The winner shares the new block with the rest of the network and earns cryptocurrency as a reward. The race is won by the computer which is able to solve a math puzzle fastest – this produces the cryptographic link between the current block and the block that went before. Solving this puzzle is the “work” in “proof-of-work”.
Proof-of-stake (PoS) is done by validators who have staked their own cryptocurrency to participate in the network. A validator is chosen at random to verify transactions and create new blocks. They then share them with the rest of the network and earn rewards. Instead of needing to do intense computational work, validators put up cryptocurrency as collateral for agreeing to strengthen the chain. This is what incentivises healthy network behaviour.
In order to defraud such a system you’d either need to control 51% of the computational power of the entire network (in the case of PoW), or you’d need to own 51% of the total staked cryptocurrency (in the case of PoS). This makes the system “trustless”, in that the cost of manipulating the system would outweigh any benefit gained by doing so.