Part 3 – web3 Goliaths
Now that we understand why there was, and is, a demand for a new internet; the circumstances that have contributed to its increased adoption; the differences between Blockchain and centralized technology; and how Decentralized Finance, built on Bitcoin, laid the foundation for the development of the new internet; it is time to dive into the details of how web3 is being used, and where lie the opportunities.
The current makeup of web3 subsides on thousands of different Blockchains. A blockchain will vary in size based on the number of computers, or nodes, that volunteer and the processing power is reliant on the number of people mining. Blockchains with more valuable cryptocurrency attract more nodes and more miners, therefore growing, increasing processing power, and having the crypto appreciate.
The reason that there are currently so many different cryptocurrencies on the market is because people are continuously building their own Blockchains to create a platform that encompasses their vision of web3. If you buy one of these cryptocurrencies (i.e. dogecoin, Ethereum, Litecoin, etc.) you are effectively betting on that company’s platform to grow and stay relevant in the years to come.
Not all platforms will survive. Like the collapse of the dotcom bubble, the smaller and unprepared platforms/cryptos will burn out or fade into oblivion, leaving in their wake several companies set to become the new Google, Amazon, Facebook, etc.
Foremost amongst these possible goliaths is Ethereum.
Building off a strong foundation and constantly developing, the Ethereum Blockchain (Ethereum) is well positioned to grow with the expanding new internet and meet the demands as more people transfer to web3. Based on Bitcoin, it has improved the technology and expanded into innovative new areas.
At first, Ethereum used Bitcoin in the same way that central banks use gold – as collateral to start their own currency. Using their currency, .eth, they created a platform where businesses and individuals can trade money for assets, lend and borrow, seek funding, do everything a bank could do. Effectively, Ethereum used Decentralized Finance to create a Crypto Economy .
Anyone can become involved in Ethereum’s economy, all they need do is exchange money for .eth and download a Digital Wallet to store it. Once .eth is in the wallet, you can explore any of the opportunities listed above, plus so many more.
Not only does Ethereum act as a facilitator, it also allows for others to build upon its platform. It is because of this that it has attracted such a strong user core which has contributed to its growth as it has contributed to theirs. Other platforms have similar setups but there are very few with a strong enough foundation to support rapid development and grow with their users. This is one of many reasons that the platform is special and built for success, it facilitates growth and development and has the bones to continue to do so.
Users have the power to develop and release content. Companies and individuals can design an App or dApp (decentralized app) on which people can lend and borrow cryptocurrencies (it doesn’t have to be just .eth), make games and music, invest, speculate, chat and anything else you would find in the usual App Store. Once the app is released it is impossible to change, if they want to update it they would have to release an entirely new app and as such it is impossible for anyone to tamper with the code, terms, etc.
To run the dApp, the company will have to pay a .eth fee to Ethereum which goes to the Miners and ensures processing speed. These fees are known as Gas. The more the demand for processing power, the higher the Gas fees.
There are endless possibilities in dApps, and as companies and individuals continue to develop them it will not be long before there is a dApp store that rivals Apple or Google. dApps are decentralized, impossible to change or remove once uploaded, and what is especially unique and promising, powered by SmartContracts.
Smart Contracts are yet another feature of Ethereum that makes it so special. The idea behind a Smart Contract is to take a standard contract, which tends to be anywhere from tens to thousands of pages long, and turn it into code. Instead of having a lawyer oversee endless paperwork, the Smart Contract basically works on an ‘IF’ this happens ‘THEN’ this will be the result. i.e. IF x amount of crypto is transferred into Person A’s wallet, THEN Person B will receive the rights to the NFT.
Smart Contracts are what make DeFi possible. Once a contract is executed it is impossible to change and unless the predetermined demands of each party are met, the transaction will not go through. Given that a lot of Contracts are anonymous, and there is no Third Party overseeing transactions, Smart Contracts ensure trust and reliability and make things like DeFi and NFT’s a possibility.
There is little doubt that Ethereum has the structure to remain relevant in the web3 space and its foundation ensures it can keep up with the rapid growth of the new internet (Ethereum explained in detail). This has many implications for businesses that wish to stay germane in the world of web3. For example, it won’t be long until people are searching Ford.eth or meta.eth.
Ethereum is currently the most prevalent blockchain platform, yet it is far from the only one. With the large amount of blockchains, and the increasing numbers, there would be chaos without some sort of governing body. Not only would the opportunity for infinite TLD’s dilute the market, there would also be the possibility of one person owning all relevant Domains and TLD’s and therefore monopolizing web3 in the same way that ICANN (link previous article) ruled Internet2.0 with the iron hand of dictatorship.
To avoid making the same mistakes of our past a project was started which allowed delegation of TLD’s through a decentralized, public platform controlled by everyone. This program is called the Handshake Protocol.
Handshake is becoming accepted as the DNS Authority for web3; basically, what ICANN is to the current internet, with one major difference – it is completely decentralized. Although decentralization in its purest form would not have any sort of oversight, that would lead to some unfortunate consequences; particularly in the case of owning DNS and TLD’s it would be possible for a single bad actor to scoop up every relevant Name and monopolize the space.
Accordingly, Handshake aims to avoid that eventuality by acting as a peer-to-peer platform used to ensure secure naming and avoid any single party from owning every TLD. To enforce this process there is a small economic incentive in the form of Handshake Coins, which one must use to bid on Domains and TLD’s. The goal behind the Coins is not so much to make a profit, but to allow for fair and equal distribution of ownership across the platform and, resultingly, web3.
Handshake allows for companies and individuals to own entire TLD’s (i.e. .eth) and rent out subdomains on their platforms (ford.eth/meta.eth). Currently, registering a TLD is a process mired in red tape and accompanied by a plethora of threats from bad actors. Since a person or company can only rent their Domain and TLD they are forced to sacrifice control, relying on ICANN to provide oversite. Web3 gives the individual full ownership, full accountability, and full control of their Domain and its security.
Furthermore, Handshake offers ownership of web3 “usernames” for individuals (think MSN Messenger or Gmail). Instead of having a different username for each website and platform, an individual’s username will be used for the entirety of their activity on web3 – everything from Social media, to gaming, to Cryptowallets will fall under one username. If you want to send ‘Mike’ crypto or tag them in a post it can all be done through one name (could be mike.eth or mike3874859.eth). Everything will be fully integrated, and each “username” will be owned entirely by the user – the uniqueness of the name, however, will depend on how quickly people adapt.
The robust expansion of web3 will allow for infinite possibilities, but also countless threats. Forward-thinking companies are already securing their position in the new space of web3 by partnering with Encirca. Encirca ensures companies success by staying up to date on the data and trends of web3 and using their unique expertise to guide companies through the rapidly growing new world and safeguard their longevity, relevance and long-term success.
Luke Bowden graduated from University with a Bachelor of Commerce, specializing in Finance. He spent several years working across a variety of businesses before deciding to apply his experience and expertise to the emerging opportunities available with Blockchain and web3. Luke resides in Vancouver and is a part-time Freelance writer, passionate about new technology and excited to educate people about emerging markets. Linkedin: https://www.linkedin.com/in/luke-bowden-aa863799/