1/ In this thread, we'll build upon WHY web3 matters with the HOW -- what are its building blocks and what is a framework to think about them from a product builder's perspective? 🧵
Why Web 3 matters 🧵— Chris Dixon (@cdixon) September 26, 2021
2/ First, if you haven't read my earlier thread on why blockchains are important for anyone thinking about building web products -- check it out to set context!
1/ A thread on why blockchains are important for anyone thinking about building web based products. 🧵— Viksit Gaur (@viksit) October 19, 2021
3/ The internet's organic evolution from an academic communications platform has led it to never natively supporting the capabilities needed for the web apps of today.
4/ For instance, logging into websites, proving ownership of digital assets like videos or images, or even paying a friend for dinner via your phone.
5/ These problems have been repeatedly solved by companies that build web applications, giving them immense power -- and smaller players must now play by their rules or face the risk of being banned from their platforms.
6/ This has stifled a lot of the innovation that the original vision of a decentralized internet imagined.
7/ Web3 creates native building blocks to manage identity, asset ownership and payment that are not controlled by any one corporation or entity, and weaves them into the fabric of the internet itself.
8/ Doing so enables us to port our identities, assets and payments across platforms, and frees us from operating within the walled gardens of large tech companies, which often have misaligned incentives from their customers.
9/ This can enable the creation of new business models that don't rely on big-tech, and result in an explosion of startups -- something that we're seeing already!
With that, let's get into the details of how web3 actually makes this happen.
10/ (Note that much has been written about how blockchains work from a technical perspective, and is beyond the scope of this thread. Instead, we'll focus on its product elements.)
11/ A blockchain is an auditable, immutable, and decentralized ledger of transactions between multiple entities (eg, people). Each entity has a wallet associated with it, which can hold tokens (eg, bitcoin), and each wallet has a unique identifier — its address.
12/ A wallet address can be thought of as a username. In fact, it can also be linked to a human readable username in the same way we link domain names to IP addresses — forming the basis of a decentralized identity system.
One of the most powerful but under-used features of @ensdomains so far is *reverse resolution*. 🔁— brantly.eth (@BrantlyMillegan) April 26, 2021
This enables a key component of web3: portable usernames, and more.
I think this may actually be ENS's most used feature long-term.
Here's how it works & how to use it 👇
13/ Wallets can store not just regular fungible tokens like Bitcoin or Ethereum, but also non fungible ones (NFTs). An NFT can be thought of as a proof of ownership certificate of an asset (say, a video file that is permanently stored on your Dropbox).
Consolidating the beginner’s guides I've written on DeFi, NFTs, and DAOs which are 3 very important areas in crypto to learn about!— Linda Xie (@ljxie) March 15, 2021
- DeFi (Jan 2020)https://t.co/x7CuyRxyLo
- NFTs (Jan 2021)⁰https://t.co/1YJbdClili
- DAOs (Mar 2021)https://t.co/SKiEHrLsNg
14/ By owning this NFT in your wallet, you become the legitimate owner of that particular video file, and anyone can verify this ownership via the blockchain — forming the basis of a decentralized asset ownership system.
15/ Tokens like @ethereum or NFTs like @cryptopunks are stored and transferred between wallets through transactions. Each transaction has a variable cost (known as the gas price) associated with it depending on how busy the blockchain is at the moment.
16/ For instance, I could pay a friend for (an expensive) dinner by simply transferring 0.025 ETH from my wallet to theirs. This forms the basis of a decentralized payments system.
17/ But the blockchain has another critical piece of functionality -- it allows code, known as a "smart contract", to run every time a "block" of transactions are written to the ledger. This allows us to write code to solve all kinds of real world problems.
18/ For instance, how could I buy an NFT painting of an artist I want to support, but make sure that both sides are protected from fraud?
The traditional way to solve this problem is to introduce a third party (an escrow) which both parties can trust.
19/ They both send their assets to the escrow, which after the right verification process, releases the respective assets. The blockchain however allows us to replace this trusted third party with an escrow smart contract that has the same functionality.
20/ The buyer and seller both agree upon a price (say 1 ETH), and send their assets (the 1 ETH and NFT painting respectively) to the smart contract's wallet. Once both assets are received, the contract then transfers the NFT to the buyer, and the funds to the seller.
21/ In the event that these conditions are not met, the transaction just reverts back to status quo.
22/ Since this code deployed on the blockchain and is open, anyone can independently audit this code and verify that it does what it is expected to do; or find and publish bugs to make sure that subsequent versions of this code can be fixed.
23/ Smart contracts can thus open up more sophisticated use cases beyond just identity, asset ownership or payments, and allow for things we are just beginning to imagine -- for instance, earning royalties on secondary sales of digital goods.
Introducing https://t.co/5wI4yVVIhE - On-chain royalties made simple 🥳— manifold.xyz (We are hiring!) (@manifoldxyz) October 22, 2021
Royalties are a big part of the NFT eco-system, but they can be confusing and painful to manage. We aim to change that today.
1/ Read on for details about our open source and collaborative initiative 🧵👇
24/ To recap, a few fundamental product building blocks of web3 today can be thought of as,
25/ In upcoming threads, we'll cover a few different ways in which web3 can impact various industries like finance, corporate governance, collaboration, art auctions and galleries, publishing, the creator economy, advertising, activism, and gaming.