Media provided from Tezos, via Unsplash.
After moving ourselves online for the better half of two years, it is no wonder why the next digital revolution has exploded. With NFTs, the metaverse, and all sorts of futuristic technology dominating the internet, it seems we are all overwhelmed, and at times confused, when considering the vast expanse of this new digital world.
We present to you the cure to your confusion—The High Schooler’s Web 3.0 Handbook: a comprehensive yet simplified guide to the Web 3.0, crypto, NFTs, blockchains, the metaverse, and more.
TABLE OF CONTENTS
What is Web 3.0? Web 2.0? Web 1.0?
Web 3.0, 2.0, and 1.0 are the defining stages of the internet.
Web 3.0 is the upcoming third-generation of the internet. While Web 2.0 is centralized around major platforms (Apps) like Facebook and Google, Web 3.0 promises to be decentralized (DApps). Web 3.0 will be automated by a blockchain, requiring less human intervention and maintenance.
With Web 1.0, most users did not have the ability to even create content in the first place. It was a read-only, non-interactive internet. You know Web 1.0 when you see Web 1.0—the type of HTML sites that history teachers assign. With our current internet (Web 2.0), centralized platforms (such as Facebook) have control over user content. With Web 3.0, users will receive compensation, power, and privacy over their content and personal information. Meanwhile, the platforms will lose out on much of the power they have enjoyed with Web 2.0.
The Timeline of the Internet/Web. Media provided from Hacker Noon, a technology blog.
Note: The “Internet and Web” were not centralized until corporations started the Web 1.0 wave. Before then, the Internet did not feature a comprehensive, centralized browsing system. Web 1.0 was the first era of the internet available to consumers.
Media provided from Gazette Media staff.
A Web 3.0 Analogy
Imagine the relationship between a landlord and a tenant. In Web 2.0, the landlord owns the building and has control and ownership over the tenant’s property. The landlord can easily exploit the tenant by raising the rent, shutting off the water, or evicting them.
In Web 3.0, however, there are no landlords. The tenants collectively own and control the building; hence, the building has a decentralized system. The building automatically runs itself without the oversight of the landlord.
What’s the deal with “decentralization?”
A decentralized network disperses control across millions of users and relies on several machines, rather than a single central server. The world of Web 3.0, and everything in it, promises to be decentralized. All users involved essentially ‘own’ a portion of the network, so to speak. Differently, in centralized networks, all information runs through central entities. It is an owner-controlled network, not a cooperative one.
Okay, yes, it sounds a bit like…communism.
Web 1.0 and 2.0 are centralized because all data runs through central networks that trace back to individuals.
Can the internet really be decentralized?
According to some tech insiders, the promise of decentralization is a manipulative ploy by the industry leaders. Jack Dorsey, a Web 2.0 pioneer and the Co-Founder of Twitter, spoke out on the users’ naivete, warning users against the monopolization of the next internet by venture capitalists (VC) and their limited partners (LP).
Theoretically, monopolies are against the very nature of Web 3.0. However, there is a worry that tech giants will manage to monopolize parts of the decentralized internet. There is one giant in particular: Meta. When Facebook rebranded to Meta, the company made it clear that they would fully focus their efforts on becoming the leaders in the metaverse industry. Given Facebook’s history of aggressive monopolization, many worry that Meta may compromise the decentralization of Web 3.0.
Man wearing Oculus VR goggles. Media provided via Unsplash.
Although there are other metaverses, Meta has effectively monopolized the virtual reality goggles industry by buying Oculus. This may mark the beginning of their take over of Web 3.0.
What is the metaverse?
The metaverse is a tokenized digital world that will eventually be a fully immersive virtual reality experience. In the metaverse, you will be able to virtually shop, attend church, get married, watch live sports, attend concerts, buy digital real estate, and much more. And although it is essentially a commercialized video game, it is far more than a Sims/GTA hybrid. From sports to fashion, various industries are moving into the metaverse. The metaverse may one day give us a second life parallel to our reality.
In the past year, artists, such as Justin Bieber, have held concerts in the metaverse. Luxury fashion brands have recently taken interest in the metaverse as well. Burberry, Louis Vuitton, and Gucci are building stores and creating digital clothing for (the equivalent of) thousands of dollars in this new online world. It does not stop here. Sports have even broken into the field, notably when the Australian Open created an immersive viewing experience in the metaverse. Clearly, the virtual world is just getting started.
There will likely be multiple metaverses and Meta will presumably have a huge stake in the industry–but they are not the only giants present. At the moment, alternatives like The Sandbox Game (centralized) and the well-known Decentraland (decentralized) are leading the way.
To own land in the metaverse, you must purchase digital land NFTs, and they are not– by any means–cheap. Right now, some digital land is selling for more than 3.5 million dollars (~1,000 MANA). Along with land, everything bought in the metaverse will be in the form of NFTs. According to The Information, the metaverse industry may be worth $82 billion dollars by 2025, establishing itself as part of a parallel digital economy (DEFI).
What is an NFT?
NFT stands for Non-Fungible Token. Fungible means “replaceable.” An example of a fungible entity is the US dollar. When you loan someone a 20 dollar bill, you do not expect that same exact 20 dollar bill to be returned to you. You can give them back a 20 dollar bill from across the country and there is no difference in the bill’s value or meaning.
Interestingly, you cannot replace NFTs with another NFT. Every single NFT has unique data and a smart contract that distinguishes it. One Cryptopunk (A popular NFT collection) cannot simply be replaced by another; hence, each has an identification code. To buy these unique tokens, you must first purchase cryptocurrency. Most NFTs on OpenSea, for example, are bought with ETH (Ethereum)—a leading cryptocurrency.
NFTs are all sorts of unique digital assets from JPG files, to MP3s, to GIFs, to Digital Land. They can be audio snippets, art, photographs, games, songs, and beyond. There are no bounds to the possibilities.
Unfortunately, right now, the popular NFTs are silly-looking apes with laser eyes and ushankas.
Examples of Bored Ape NFTs. Media provided from The New Yorker.
Any intangible file can be “minted” as an NFT as long as it is completely unique. And no, you cannot screenshot NFTs. The data will differ from the original. Screenshots are fugazi.
Usually, the value is intangible. It’s like having a unique piece of art. Sometimes, there are real-life benefits of owning an NFT. For example, if you own a Bored Ape NFT, you can attend high-profile events with other owners.
An NFT Analogy
NFT marketplaces are like digital yard sales. Every item is random and unique and does not have a duplicate. Whether it be art, toys, or music records, the seller sets the value and the buyer offers a crypto value. The buyer can also trade items with the seller.
What is a cryptocurrency?
Cryptocurrency is a digital alternative to money. Crypto is a fungible asset: 10 Bitcoin can be replaced with 10 Bitcoin. However, crypto is decentralized, unlike money. It does not run through a central entity and it is also fully digital. With that, it is far more volatile than traditional currency: one day, a single crypto coin can be worth $100 US dollars, and the next it can be worth $5 US dollars.
You may have heard of popular cryptos such as Bitcoin, Ether (Ethereum), and SOL (Solana). These coins fluctuate in price similar to a stock and are exchanged digitally for goods, services, and other currencies. Although anonymous, crypto is fully traceable. Some countries are even adopting it as a national currency.
To buy NFTs, you must use crypto. Cryptos do not run through any bank. Instead, they run through the blockchain, which ensures the security, accuracy, and velocity of transactions.
What is the blockchain?
NFTs run through crypto blockchains. A blockchain (ledger) is a decentralized database that processes, verifies, and records all activity that will occur in Web 3.0. For example, when you buy an NFT using ETH, the Ethereum blockchain processes the purchase. If you own the Ether token, you contribute to the blockchain’s vast network.
Media provided by Gazette Media Staff.
Because the blockchain is automated, it ensures the security, accuracy, and transparency of all crypto transactions without flaw. With that, it is the operator behind Web 3.0 and its byproducts, operating on millions of decentralized computers around the world.
A Blockchain Analogy
Crypto is to the blockchain as cash is to the bank. Banks process the transfers of cash; blockchains process the transfer of crypto. Banks are centralized. They are ultimately human controlled unlike automated blockchains. Blockchains act as automated banks, flawlessly verifying, securing, and recording all digital transactions. Imagine them as the bill counter machine in the bank. Advanced blockchains also incorporate smart contracts which ensure that verifiable conditions are met.
Just as there are many banks, there is not one blockchain. There are several blockchains, with Ethereum being the leading network. Ethereum runs on the Ether cryptocurrency. It is also the predominant blockchain behind the world’s largest NFT marketplace, OpenSea.
Why are these technologies so groundbreaking?
The excitement behind this new digital frontier lies in the possibilities to push past the bounds of our reality. This new world marks the beginning of a new era of connection, communication, creativity, entertainment, and even a parallel economy. Things we have never achieved in reality may be done in the metaverse. It may make our lives more efficient than ever.
Artists and creatives see this as a new way for artistic content to be displayed, sold, and appreciated. One pioneer of Web 3.0, Chris Dixon, exclaimed that, “We were told the internet is bad for creative people. The internet is not bad for creative people. Web 2.0 is bad for creative people.” Web 3.0 promises to give the internet to the creator.
Those from underdeveloped countries see the metaverse as a potential basis for a complete redistribution of global wealth. Given the potential lack of centralization, Web 3.0 may offer the opportunity for individuals to become forerunners in Web 3.0. Perhaps it marks the beginning of a more equal world where anyone with a mouse and keyboard can truly carve out a living for themselves.
Nevertheless, others treat this digital revolution as no more than a way to make a quick buck and capitalize on the hype. Some sell short and some invest long, allowing their digital assets to grow.
What are the dangers of this new wave of technology?
Regardless of how exciting this revolution may be, it is imperative to remain critical of this new digital frontier. As discussed earlier, the promise of decentralization is faulty. Although one of Web 3.0’s main contracts is to be decentralized, corporate conglomeration may be inevitable. Microsoft, Meta, and other Web 2.0 leaders are already making their mark and claiming their territory in Web 3.0. With Web 2.0, these companies were and are the pinnacle of centralization. It is important to be wary of their involvement in Web 3.0.
Media provided from Graph created by NYU Professor Scott Galloway.
Already, we are seeing a monopolization of the crypto market and NFTs. The trends shown by the graph above already reflect the wealth inequality in our economy. Even if we manage to keep the centralized corporations out, groups of insiders will undoubtedly hog the profits. Certain accounts are “whitelisted” which gives them an advantage in the market. Centralized wealth may compromise decentralized markets.
Another concern caused by the rapid growth of digital assets is the declining rate of veracity in new NFT projects. As the market grows, consumers are now creating a movement similar to an online gold rush. Many “scam coins” and “rug pulls” are being created. The project creators drive value up, enticing people into putting more money into them. Once big enough, the creators sell their assets without warning, leaving their investors empty-handed with a rotting project.
Is this all a bit dystopian?
Maybe. Take the metaverse, for example. The term “metaverse” was first coined by dystopian author Neal Stephenson in his 1992 novel Snow Crash. Snow Crash is a novel that follows protagonist Hiro as he navigates his way through a dystopian world where he doubles as an internet hacker in the metaverse and impoverished delivery driver in reality. In Snow Crash, corporations have run the world into poverty, violence, and authoritarianism. While the novel is a work of fiction, it is considered a sort of warning against the metaverse spiraling out of control—or rather into power. In the next few years, the technology industry must develop a thorough system of regulation to prevent such a dystopian future.
Without a centralized governance, who is going to control all of this?
Web 3.0 proposes a hyper-democratization of the internet. The idea is that the peer-to-peer networks are cohesive enough to regulate themselves without a power hierarchy. The smart contracts will prevent scamming and abuse. Nonetheless, the blockchain is an automated system that cannot determine what is ethical. There are surely loopholes that will require humans to resolve.
The governance of Web 3.0 is at the center of debate around the world. Government involvement brings up issues of censorship and the politicization of information. On the other hand, corporate governance can potentially make Web 3.0 a vehicle for an even more extreme wealth gap.
Nobody is sure how the next internet will be regulated but it seems everybody is sure that it must be.
Is crypto bad for the environment?
Another startling side effect of this online revolution is its environmental damage. To “mine” or generate and process cryptocurrency, robust computers and databases must power the activity. All over the world, warehouses hosting massive amounts of processing power are used to generate crypto. In turn, these computers consume gargantuan amounts of electricity. Their environmental impact is becoming a growing problem.
According to Cambridge, Bitcoin alone uses more electricity than countries including the Netherlands, UAE, and Argentina. As more cryptocurrencies come into existence and the demand increases, the effect on the environment and carbon emissions will be devastating. It is crucial that the next generation of blockchain finds sustainable solutions to the energy demand.
Web 3.0 proposes a promising future for the internet and for life as we know it. From crypto to NFTs, to the metaverse, technology may now be able to break into new, previously unthinkable horizons. This new internet will make our lives more efficient and, potentially, more creative than ever. From individual changes to mass industrial changes, the third generation of the web will inevitably become intertwined with our everyday lives.
It is important we stay critical and informed. Not all of Web 3.0’s promises will be fulfilled. Perhaps, the whole revolution will collapse. Perhaps, it will send us down into a dystopia. Or perhaps it will improve the quality of life worldwide.
We can’t tell just yet.