INSUBCONTINENT EXCLUSIVE:
The idea of Web3 is to create software and platforms that arent dependent on traditional companies.New Delhi: If you follow the world of
cryptocurrency even casually, you know it produces a constant supply of jargon
There's NFT, dapp, DeFi, and tokenomics, to name a few
Brace yourself for a new one: Web3
The idea is that crypto isn't just for sending money or speculating with, but could be used to build a whole new web
If the believers are right, this is one bit of cryptospeak worth getting familiar with, even if you never touch Bitcoin.Of course, the
software behind the internet is changing all the time
workings of almost anything you do online
And by doing so, its boosters say it could supplant corporations with decentralized, internet-based organizations governed by software
protocols and the votes of token holders
applications, many of them tools aimed at crypto traders
It may also be an attempt to get around regulation, at a time when policymakers are gearing up to set clearer rules for crypto
In sum, Web3 is a heady mix of creative new projects, techno-utopianism, and financial engineering
Here's a beginner's guide to what you need to know.Why is it called Web3? What were webs 1 and 2 again?The term Web 1.0 generally describes
everything from the earliest interconnection of computer networks in the 1970s and '80s to the first flowering of browsers and websites in
In the next phase, Web 2.0, companies built applications on top of that, from social media to search engines to wikis, much of it based on
content generated by users
Although that made much of the web in one sense decentralized, most things still run through big companies
The idea of Web3 is to create software and platforms that aren't dependent on traditional companies and Web 2.0 business models such as
For example, users might pay for services directly using tokens
In an ideal world, Web3 services are supposed to be operated, owned by, and improved upon by communities of users
(As to why it's Web3 and not Web 3.0, chalk it up mostly to changes in how developers talk online.)What's this have to do with
crypto?Bitcoin, the original cryptocurrency, works by having a public database called a blockchain record every transaction
It's decentralized because this ledger is maintained not by one company but by a vast network of computers all connected to the internet,
whose operators are rewarded for the work with the chance to earn more Bitcoin
But you can do more with a blockchain than record transfers of digital coins
You can use it to make contracts and control how software and apps work.Web3 applications are often based on a technology called Ethereum,
which like Bitcoin rewards the users who help maintain its network
Its coin is called Ether, which has a total market value of $511 billion
The apps themselves can also have associated tokens, which may not only pay for services but act like voting shares that govern the apps'
development and even fee structure
At least early on, much of the incentive for this activity often is the chance for appreciation in the token's price
It might rise as more users join the community, but of course it can also be inflated by speculation
There's a lot of that in crypto.Why am I hearing more about this?The speculative boom is a big part of it, but it's also that people are
starting to see the tech in real life
As Bitcoin and other cryptocurrencies rallied earlier this year, venture capitalists poured billions of dollars into building and improving
distributed apps, or dapps
partner at venture capital firm Andreessen Horowitz
(Bloomberg LP, which owns Bloomberg Businessweek, has invested with Andreessen Horowitz.)More than 8,700 active dapps are listed on tracker
They include lots of crypto trading platforms and games
Sometimes the line between those is fuzzy: Many games involve winning and trading nonfungible tokens, or NFTs, which are virtual characters
or collectibles that can fetch sky-high prices.Operating through a distributed network can be clunky, but the user experience is getting
nonprofit hatched out of Stanford and the University of Southern California Shoah Foundation that's working on using cryptography and
decentralized networks to help preserve and verify documents including sensitive historical records
One of the group's projects is to upload more than 55,000 video testimonies of genocide survivors to Filecoin, a distributed network where
more than 3,500 providers around the world store files on their computers in return for FIL tokens
The Starling Lab is now able to pour three times more data per day into Filecoin than at the beginning of the year, says Dotan.In October,
partnered with startup Helium Inc
for 5G wireless connectivity
Hotspot providers get paid in the token HNT for offering coverage
The city of San Jose is setting up 20 Helium hotspots to earn HNT tokens to help cover internet access for some low-income residents.Twitter
Inc.'s engineers are working on Bluesky, a decentralized version of social media
Gaming company Ubisoft announced on Dec
7 it will let players in one game get NFT collectibles such as vehicles for their characters
In other words, decentralized apps will face plenty of competition from traditional web players
Shen, a partner at venture capital firm Electric Capital.What are the downsides?Although Web3 is often described in terms of idealistic
cooperatives, decentralization can also be a cover for business as usual with less accountability
Regulators are raising concerns about some projects, particularly decentralized finance, or DeFi, apps that let people lend, borrow, and
trade coins with each other, often without verifying users' identities or performing anti-money-laundering checks
Many teams of developers claim they aren't responsible, because they've passed control on to their users
But the difference is you can't stop the protocols
huge amount of computing power some blockchains require, though newer systems may ease that
And with much of the code created in all-nighters, software bugs and malicious hacking attacks abound
Many projects don't even list contact numbers, though they may maintain online chat groups
If you accidentally mistype and send money to the wrong account, it may be lost forever
You won't be able to resolve the problem like you would by calling a bank's customer service line.Many Web3 ventures have few paying
customers but can gain from the appreciation of the underlying token, making them vulnerable to a wild market
Take Piknik - Co., which employs about 30 people and operates two data centers supporting Filecoin
It makes money generating FIL tokens, which have almost doubled in value this year
But they're down 82% since the April peak
CEO Kevin Huynh says he has customers in pilot programs who will eventually start paying him
He's made a big bet on Web3
He trained as a surgeon before diving into Piknik, and liquidated his 401(k) and gathered small contributions from about 70 relatives and
