WEB3

• Web3 is the next evolution of the internet. It sprouts and grows from Web 2.0 with added functionality.

• Web 2.0s is focused on read-write, whereas Web3 is read-write-own or read-write-execute.

• Decentralization, privacy, security and machine learning are early principles of Web3.

• Web3 is still, for the most part, a work in progress and implies many question marks.

What is Web3? Web3 is the newest and prophesied version of the internet. That sounds huge, and it is, but the internet won’t be uninstalled and replaced with a new version. Rather, it’s about adding and innovating what we already use. And don’t worry if you’re confused abut AR (Augmented Reality) vs VR (Virtual Reality), if you love VR or you hate them both—there will be something for everyone. Web3 will eventually shape what the metaverse is and how we operate online and will keep our data more secure.

How the internet has changed

So far, there have been two versions of the internet. The first version was called Web 1.0, or read-only web, which lasted from the beginning of the internet in 1989 to the early 2000s. Its intent was to share information; there wasn’t any interaction between the visitor and what was online. You could put up your own pages online, or you could read other people’s pages. That’s it. Other than email, communication was absent. All the information was stored on a server and accessed only by a computer.

Slowly, the internet evolved into Web 2.0, or read-write web. It became official around 2004, and it is what we use today. This version allows people to interact with what they see online through comment sections, social media and more. Instead of being stored only on personal servers and accessed by computers, 2.0 information can also be stored in cloud storage (hosted servers) and viewed on tablets, mobile phones and even your fridge, in addition to your computer.

What is Web3?

So when you ask, what is Web3 (Web 3.0), the answer is really that it’s the next evolution and innovation of the internet, growing out of Web 2.0. We’re already getting glimpses of what it will eventually be, even if there is no hard definition of what this progression will end up looking like.

Similarly to the earlier versions of the internet, Web3 is building off the past generations and adding to it. It is considered the read-write-own or read-write-execute version of the internet. Decentralization, privacy, machine learning and safety are some trends we are already seeing that will shape the Web 3.0 environment.

Fairness through decentralization

The big focus of Web3’s meaning is decentralization—making online communities owned by everyone, with transparent information sharing.

Instead of storing information through database giants such as Google, information will be freely shared and stored in many locations (this is called distributed computing). Everything will be shared by DAOs (Decentralized Autonomous Organizations). DAOs are groups built for one purpose, community run, relying on each member within the DAO to work in the best interest of reaching a common goal.

Privacy through blockchain

Blockchain is considered a pivotal part of decentralization. Ownership of things on the internet will be registered on the blockchain, which is a transparent and publicly accessible data system that allows anybody to see what goes on in it.

An example of people using blockchain includes registering digital assets (NFTs) and tokens (crypto), which allow people to transfer digital goods seamlessly without needing to know the other party. Personal identity isn’t revealed unless users decide to share their real identity by tying their blockchain wallets (think of this as your Web 3.0 ID) to their personal information.

There is one main difference between blockchain technology and past infrastructures: databases. In the past the latter were controlled by a single person or organization, which had complete control over that system. They could control how the data is stored and changed, leading to errors and fraud. Blockchains, on the other hand, allow anyone to create systems that can be audited by anybody. Because it is open to everyone, it allows anyone to understand the systems they are interfacing and develop trust with users who use their apps.

Security through encryption

Encryption is another part of Web3. It basically ensures that no one can access data except for the intended parties. While we already use encryption to protect our online data, as the internet evolves, we’ll use it to ensure data can be both publicly transparent and privately owned.

For example, encryption will keep your information private as you transfer ownership and assets on the blockchain.

Machine learning through AI

Another piece of the Web 3.0 puzzle was dreamed of way back in the 1990s. The idea was computers would be able to contextualize information much like the human brain. Beyond just knowing what the information is, the AI (artificial intelligence) would understand the meaning and emotion behind the information, serving it up to humans in a more intelligent way than search engines do today.

AI could, for example, find you the pair of shoes at the best price point for you using your personal preferences and style, just like a human personal shopper. It may also be able to shop for a car or vacation for you and then provide you with highly customized options.

AI could also be used to make things of value using this advanced way of learning, such as creating new medicines or manufacturing new products.

There are already a few use cases of artificial intelligence in Web 3.0 applications. For example, there is AI-generated art, which is then sold as NFTs.

How might this all fit into the metaverse someday?

It’s still too early to say,  but, in the near future, the metaverse could use blockchains to keep track of digital asset storage. One potential use is that creators in the metaverse may be able to register their digital assets, like sound, music, immersive experiences, and games, in a safe and transparent way.

Web 3.0 AI may also be able to build custom metaverse games or environments based on your personality and preferences.

Examples of Web3 companies, platforms, and networks

There are already many Web3 examples created and thriving. Popular Web3 networks include Ethereum, Solana, Polygon and Cosmos. Some popular Web3 platforms include OpenSea, Coinbase, Ledger and MetaMask. Many of these networks and platforms sell NFTs or cryptocurrencies like Bitcoin.

Cons of Web3

Are there downsides to Web 3.0? It’s really too soon to tell. We are still in the infancy of this new version of the internet. There are theories, though.

Some believe that DAOs, in particular, could be chaotic.

Even though DAOs reject the constraints of centralized control, they will likely need to adopt some sort of governance policies, including data governance. As DAO organizations operate entirely online, governing data effectively is critical for security, access, collaboration and more. DAOs are built on and work using digital information. Ensuring that this data is well managed using a dedicated tool will probably be among the top future priorities when deciding on governance protocols.

How Web3 could affect your life

In the future, your data will be yours and you can use it to create a better life. Companies collecting your personal data every time you buy something or search for something online could be a thing of the past.

AI could work as your own personal butler, creating personalized experiences for you using the data you control. You may also be able to build custom games and environments using AI.

Will this give agency to everyone? Since more and more people will have the ability of express ideas and execute them, will this cause a democratization and universalism of access or more repression and control or manipulation?

Conclusion

Though there is a lot that may come with Web3, there are some overall themes that are already emerging. The pull away from Big Tech with an emphasis on giving the user more freedom and security is already happening.

While Web 3.0 may seem exciting, and a little daunting, it is important to remember that there won’t be a big change right away. Over time, the internet as we know it will slowly evolve into the new version, just like 1.0 evolved into 2.0, maybe a little faster or with some dramatic leaps forward and some setbacks. It will be easy for most to adapt, as earlier functionalities of the web will remain, and we may not even realize it’s happening. As for when that will be, some experts predict it will take a minimum of 5 to 10 years.

What is NFT?

NFT means non-fungible tokens (NFTs), which are generally created using the same type of programming used for cryptocurrencies. In simple terms these cryptographic assets are based on blockchain technology. But they cannot be exchanged or traded equivalently like other cryptographic assets like Bitcoin or Ethereum. Physical currency and cryptocurrency are fungible, which means that they can be traded or exchanged for one another. The term NFT makes it clear that it cannot be replaced nor interchanged because it has unique properties.

Key Features of an NFT

Digital Asset - NFT is a digital asset that represents Internet collectibles like art, music, and games with an authentic certificate created by blockchain technology that underlies Cryptocurrency.

Unique - It cannot be forged or otherwise manipulated.

Exchange - NFT exchanges take place with cryptocurrencies on specialist sites.

How Does NFT Work?

The majority of NFTs reside on the Ethereum cryptocurrency's blockchain, a distributed public ledger that records transactions.

NFTs are individual tokens with valuable information stored in them. Because they hold a value primarily set by the market and demand, they can be bought and sold just like other physical types of art. NFTs' unique data makes it easy to verify and validate their ownership and the transfer of tokens between owners.

Examples of NFT

The NFT world is relatively new to people. Here are some examples of NFTs that exist today: digital collectibles, domain names, games, essays, sneakers, etc.

What is NFT Used For?

People interested in crypto-trading and people who like to collect artwork often use NFTs. Other than that, it has some other uses too like:

Digital Content - The most significant use of NFTs today is in digital content. Content creators see their profits enhanced by NFTs, as they power a creator economy where creators have the ownership of their content over to the platforms they use to publicize it.

Gaming Items - NFTs have garnered considerable interest from game developers. NFTs can provide a lot of benefits to the players. Normally, in an online game, you can buy items for your character, but that’s as far as it goes. With NFTs, you can recoup your money by selling the items once you’re finished with them.

Investment and Collaterals

Both NFT and DeFi (Decentralized Finance) share the same infrastructure. DeFi applications let you borrow money by using collateral. NFT and DeFi both work together to explore using NFTs as collateral instead.

Domain Names - NFTs provide your domain with an easier-to-remember name. This works like a website domain name, making its IP address more memorable and valuable, usually based on length and relevance.

Even celebrities like Snoop Dogg, Shawn Mendes, and Jack Dorsey are taking an interest in the NFT by releasing unique memories and artwork and selling them as securitized NFTs.

NBA Top Shot Is a Hot NFT Use Case

One of the most popular non-fungible tokens in recent days is NBA Top Shot, a partnership between Dapper Labs (makers of the CryptoKitties game) and the National Basketball Association (NBA). The NBA licenses individual highlight video reels, among other content, to Dapper Labs, and they digitize the footage and make it available for sale to consumers. Each reel shows a video clip, such as a famous player's basketball dunk, some featuring different angles and digital artwork to make them unique. Even if someone made a perfect copy of the video, it can be instantly recognizable as a counterfeit. The venture has already generated $230 million in sales, and the company just also received $305 million in funding from a group that includes Michael Jordan and Kevin Durant.

How NFTs are specifically different from other forms on cryptocurrency and why are they Becoming Popular?

NFTs have actually been around since 2015, but they are now experiencing a boost in popularity thanks to several factors. First, and perhaps most obviously, is the normalization and excitement of cryptocurrencies and the underlying blockchain frameworks. Beyond the technology itself is the combination of fandom, the economics of royalties, and the laws of scarcity. Consumers all want to get in on the opportunity to own unique digital content and potentially hold them as a type of investment.

When someone buys a non-fungible token, they gain ownership of the content, but it can still make its way over the Internet. In this way, an NFT can gain popularity — the more it’s seen online, the more value it develops. When the asset is sold, the original creator gets a 10 percent cut, with the platform getting a small percentage and the current owner getting the rest of that revenue. Thus, there is potential for ongoing revenue from popular digital assets as they are bought and sold over time.

Authenticity is the name of the game with NFTs. Digital collectibles contain distinguishing information that make them distinct from any other NFT and easily verifiable, thanks to the blockchain. Creating and circulating fake collectibles doesn’t work because each item can be traced back to the original creator or issuer. And, unlike cryptocurrencies, they can’t be directly exchanged with one another (like baseball cards in real life) because no two are the same.

Are NFTs Mainstream Now?

So, with all the fuss made over NFTs, is it accurate to say that they’re now mainstream? This article makes a strong case for believing that NFTs are now baked into the public consciousness. It doesn’t hurt that a number of high-profile celebrities have ventured into NFT waters.

While perhaps it may be premature to say “Yes, NFTs are definitely mainstream now,” if they continue on this trajectory, 2022 could be the year where we know that NFTs are here to stay.

Other Cryptocurrencies

• Cryptocurrencies are “fungible”; they can be traded or exchanged for one another. They’re also equal in value.

• For example, one Bitcoin is always equal to another Bitcoin, or one Dollar is always equal to one Dollar.

NFTs

• Each NFT acts as a digital signature that makes it impossible for them to be exchanged for or equal to one another.

• For example, The Last Supper is a painting of a kind and cannot be exchanged with another painting.

How is an NFT Different From Other Cryptocurrencies?

Although NFTs are created using the same kind of programming language as other cryptocurrencies, that's where the similarity ends.

Ethereum and NFTs

Ethereum blockchain makes it possible for NFTs to work for several reasons:

Trading NFTs, without needing peer-to-peer platforms, can take significant cuts as compensation.

All Ethereum products share the same "backend", making NFTs portable to buy on one product and sell it on another effortlessly.

Once a transaction is confirmed, it's impossible to manipulate the data to forge the ownership.

Ethereum never goes down, which means your tokens will always be available to sell.

Noticeable is also that several NFT projects have their own communities, where members can collaborate, share ideas, and support or buy each other’s projects or art.

How to Buy NFTs?

Having understood what NFTs are used for and its specific advantages over other cryptocurrencies, you might want to venture into buying NFTs. If so, you will need to acquire some essential items before you do it:

You’ll need a digital wallet that allows you to store your NFTs and cryptocurrencies.

Then you need to purchase some cryptocurrency depending on what currencies your NFT provider accepts, most likely Ether. You can use platforms like OpenSea, Coinbase, Kraken, PayPal, etc., to buy cryptocurrencies.

Once you’ve made your cryptocurrency purchase, you can move it from the exchange to your wallet. Remember though that many exchanges charge a small percentage of your crypto purchase transaction as fees.

Popular NFT Marketplaces

Once you’ve got your wallet ready, all you need to do is to buy NFT. Currently, the largest NFT marketplaces are:

Rarible - Rarible is a democratic marketplace that allows artists and creators to issue and sell NFTs. It enables holders to weigh in on features like fees and community rules.

OpenSea - To get started, all you need to do is create an account on the official website of OpenSea and browse NFT collections and discover new artists. This platform is famously known as a vast collection of rare digital items and collectibles.

Foundation - On this platform, artists need to receive from or send an invitation from fellow creators to post their art. This community’s exclusivity boasts higher-caliber artwork, assuming the demand for NFTs remains at current levels or even increases over time.

How Does the Future of NFT Look Like?

NFT has enhanced media exposure and special perks for aspiring artists on social media. Recently, Jack Dorsey, the CEO and co-founder of Twitter, with his very first and famous tweet, "just setting up my twttr," and Vignesh Sundaresan, famously known as "Metakovan," bought 69.3 million dollars worth of NFT art on Beeple.

Owing to its increasing popularity, people are now willing to pay hundreds of thousands of dollars for NFTs.

Many experts in the crypto industry say that around 40% of new crypto users will use NFTs as their entry point. As a result of its growing popularity, NFT could represent a more significant part of the digital economy in the future.

FAQs

1. What are some examples of non-fungible tokens?

NFTs can represent any asset digitally. It can be online-only assets such as digital artwork or real assets like real estate. Some examples are in-game avatars, digital/ non-digital collectibles, tickets, domain names, and more.

2. How can I buy NFTs?

Most non-fungible tokens can be purchased with Ether only. So, owning and storing them in a digital wallet is the primary step. You can buy NFTs via an online NFT marketplace such as OpenSea, SuperRare, and Rarible.

3. Are NFTs safe?

NFTs that use blockchain technology like cryptocurrency are generally secure. Nevertheless, nobody can ignore that this technological landscape is still unstable and evolving at an incredible rate, therefore caution and prudence are never enough. Their distributed nature makes NFTs nearly impossible to hack. The only security risk is that you could lose access to your NFTs if the hosting platform goes out of business.

4. What does non-fungible mean?

Fungibility is a term from economics describing the interchangeability of products/ goods. For instance, an item such as a dollar bill is fungible when it is interchangeable with any other dollar bill. Contrastingly, non-fungible means the item is unique or distinguishable. For example, if you take a dollar bill and have it signed by a famous artist, it will become unique.

5. What are NFTs, exactly?

NFTs or non-fungible tokens are digital assets based on blockchain technology. Anything can become an NFT: a work of art, sports memorabilia, or even a tweet.

6. What are NFTs used for?

NFTs are digital files. They can be a jpeg of an artwork, real estate, or a video. Turning files into NFTs helps secure them via blockchain to make buying, selling and trading efficient, reducing fraud considerably.

7. How do NFTs and crypto connect?

Like cryptocurrencies, non-fungible tokens also exist on a blockchain. It confirms the ownership and unique identity of the digital asset. A technology similar to Bitcoin and Ethereum is used to build NFTs. In fact, Ethereum is the widely accepted crypto in the NFT market.

8. Why do people buy NFTs?

NFTs are considered a safe investment option. These tokenized assets are accessible to everyone. They empower you with basic usage rights. Moreover, most buyers invest in them because they believe the assets will hold value in the future.

9. What are the best ways to make money from NFTs?

Some of the best ways to maximize the return from NFTs include Renting, Earning royalties, Trading NFTs, NFT gaming and Adopting NFT-powered yield farming.

10. Should I invest in an NFT?

Experts suggest that NFTs could be a good investment because you can resell them for profit. Several NFT marketplaces allow sellers to get royalties for their sold assets. However, proper research is necessary before investing so that you can gauge whether it suits your demands.

11. What's the difference between NFTs and cryptocurrency?

Both cryptocurrencies and NFTs use the blockchain network for ownership verification. However, unlike a cryptocurrency, an NFT can't be directly exchanged with another NFT. NFTs are sold but not traded like securities on digital exchanges. In contrast, cryptocurrencies can be traded like securities.