Web3

Core principle: adding protocols for payments and state to the internet. Think of the blockchain as one "world computer": all code is open, runs on one virtual computer (computer = machine that can execute instructions and store state). all code is accessible, and composable with one another. No need for APIs. Everything is permissionless.

Key Elements of Web3

• Wallets Wallets allow you to keep money, sign things, and log into websites
• Web3 Sites Websites where you can log in with your wallet and sign things.
• Blockchain The global database / computer

Technologies

• blockchain - basis for other technologies listed below. A decentralized ledger.
• cryptocurrency - an exchange of tokens built on a block chain. they provide a financial incentive ("tokens") to participate in the network.
• NFTs - non-fungible tokens. unique tokens
• Smart Contracts a program that can execute on a blockchain.
• Solidity programming language used to write smart contracts.
• metaverse - idea for a virtual world with persistent state.

Use Cases

• defi - decentralized finance: using tokens for private lending, liquidity pooling.
• NFTs for the sale of art, access to communities. Large examples include Cryptopunks and Bored Ape Yacht Club
• "log in with your wallet" - Your wallet acts as both a proof of identity and an inventory.
• dapps - distributed apps. Systems that run on the 'world computer.'
• DAO - Decentralized Autonomous Organization. The largest of with are Bitcoin and Ethereum (yes, there are DAOs behind these technologies.)

Terminology

• 51% Attack - if someone controlled 51% of the nodes managing a distributed ledger, they could write their own transactions. (though they could not edit or delete existing ones).
• airdrop - sending tokens to a wallet without letting them know.
• cryptoeconomics - the study of economics based on these technologies. A form of [[game theory]].
• DeFi - distributed finance. contrast with traditional finance(tradfi).
• governance - the method in which blockchains are run. More on governance
• grants programs - Programs decentralized networks run where they offer compensation in exchange for dev work. Here's a list of some grants programs
• ledger - A cryptographically secured list of transactions, aka blocks on the blockchain. transactions happen between different addresses
• micro-economy Small token-based economies.
• nodes - a user that is part of the network.
• staking - the act of putting up money to help verify transaction on the network.
• token - an entry on a ledger that belongs to a blockchain address.
• oracle - a part of a smart contract that provides data from a 3rd party.
• P2E - Pay to earn. Model of gaming where you can earn crypto by playing the game.
• proof of work - uses large computing power to ensure the validity of the distributed ledger. Actors on the blockchain who do this work are rewarded with tokens. Due to the amount of work needed to attack the ledger, it makes attacks more costly than they are worth.
• proof of stake - alternative to proof of work, where only network actors who have a financial stake can add blocks to the ledger.
• wallets - applications used to store the public private key pair associated with a blockchain address. Contrary to the name, it does not store tokens.

Using The Blockchain

There are several wallets available to use multiple types of cryptocurrencies.

Developing on The Blockchain

• Hardhat - used for setting up a Solidity development environment.
• Truffle - another development environment
• Remix IDE - Online IDE
• Web3.js - Ethereum Javascript API
• Ethers.js - Another Ethereum JavaScript API.

Buying, Selling, and Trading Cryptocurrency

I mostly use Coinbase for ease of use. It supports "mainstream" coins. Binance is another popular one. Not all coins are available in he United States. For going deep on alt coins gate.io seems promising, but untested.

Sites / Projects

• OpenSea - Crypto marketplace.
• Snapshot - Used for voting within DAOs.
• Mirror - publishing on the block chain

Criticisms of Web3

• Wide scale adoption requires significant amounts of distrust in current, centralized solutions.
• Currently difficult to use.
• Environmental concerns, especially with proof-of-work based solutions.

Further Reading

• Thread: Chris Dixon Explains Web3 - this thread established Chris Dixon as one of the current thought leaders in the space.
• Article: The New Creator Economy - DAOs, Community Ownership, and Cryptoeconomics - Nadir Dabit
• Article: How to Get Into Ethereum | Crypto | Web3 As a developer - Nadir Dabit
• Book: Token Economy: How Blockchains and Smart Contract Revolutionize the Economy
• The Bitcoin Whitepaper
• VGRs Journey to Web3

Keeping Up

Most stuff is probably happening in a Discord server you're not a part of. Conversations in private channels seems to be where a lot goes on.

Web3 is a fast moving space, some of my prefered resources for keeping up are

• Newsletter - Packy McCormick's Not Boring a newsletter about the frontier of technology, but is more and more web3 focused these days.
• Newsletter - Almanack's DeFi Friday - specifically about DeFi, but a good place to get some 'alpha' on new models and investments.
• Podcast - Not Investment Advice "Jack Butcher, Bilal Zaidi & Trung Phan discuss what they're finding on the edges of the internet + the latest in business, technology and memes."
• Podcast - Bankless - "The Ultimate Guide to Crypto Finance"
• Twitter List - Web3 Twitter - a curated list of interesting Twitter follows