This weekend I finally jumped into "web3". I've been a bit disconnected from this world for a while and was fairly critical of not just NFTs but the "web3" movement as a whole. I think I get it now though.
I've played with cryptocurrencies for a while, since around 2015 if memory serves. That has involved buying some Ethereum and bitcoin on Kraken and learning how to trade and spot patterns and read the charts. For most of this, I treated cryptocurrencies as currencies. Either stores of value for an individual or transfers of value between parties.
This weekend I finally jumped into "web3". I bought a .eth Ethereum Name Service token which is kind of like a web address for the crypto world.
southclaws.eth now points... nowhere, but it exists.
I also minted a non-fungible token on the Ropsten test network using some free Ethereum (10 to be exact) I got from some test site that mints you Ethereum out of nowhere for test and development purposes.
The "ah-ha moment"
I've been a bit disconnected from this world for a while (outside of trading a bit, which is somewhat lucrative but also extremely boring) and was fairly critical of not just NFTs but the "web3" movement as a whole.
I think I get it now though.
Blockchains aren't here to solve every problem (contrary to what founders would have you believe) but there are some key areas of both technology and culture I believe will be most impactful.
At the core of these areas of impact lies identity. This makes sense, the whole cryptocurrency movement is rooted in individualism and to an extent, small-government libertarianism. Identity is important to people and especially important to those who despise Facebook, Google and various other tech monopolies.
I knew this, but it really clicked when Chris Dixon wrote this on Twitter
This immediately illustrated the portability element of "web3" and how this information being decentralised does mean the actual app or website doesn't really matter that much.
And you can still run a targeted ads business around this, it doesn't disrupt existing revenue models but it does mean platforms like this must compete more for your attention because you can much more easily pick up and leave.
This reminds me of the days of Trillian where I had one app hooked up to Skype, Facebook and MSN all at once. And if I wanted to move, I could, because everything was backed by Jabber/XMPP - a standard messaging protocol.
The problem with standardised protocols like this is they are slow. Much like governments. Facebook (and others) moved to their own proprietary format to support things like reactions, replies, audio messages, stickers, etc. XMPP is still in use by a few platforms nowadays but multiple competing clients on top of a single standard is a thing of the past for messaging.
Another area I've really enjoyed using web3 technology is authenticating on websites. No emails or passwords for a lot of services which is great. The UX is pretty smooth and permissions are built-in.
There are also projects like Magic.link and Login.xyz building neat products in the authentication and decentralised identity space.
The most irritating thing about web3 is how everything costs money. Buy a .eth domain? that costs money, which is fine, normal domains do too. Want to set the equivalent of an "A" record, which normal domains use to point to web servers? That costs money too. Even making the domain you just spent $15 on your "primary" domain costs another $15.
This is not financially accessible and at this point is just a techy plaything for affluent gadget enthusiasts. Far from the "democratising finance" vision of early Bitcoin. Now I understand this experience is specific to Ethereum and layer 2 chains exist to bring the cost down. I haven't evaluated any of these solutions yet.
But it's early days, Ethereum is still in flux and supposedly will become more affordable when the network completes its seemingly Sisyphean task of moving to proof-of-stake (which also has its democracy problems.)
I do want to play more with the web3 and crypto technology though. I write about products, startups, writing code and building things so if that's your thing, consider subscribing! I aim to keep to a 1 to 2-week cadence for posts.