4. You and Web3.0

history of crypto

Introduction

web 3 intro

Web3 is the decentralized or "open" web πŸ‘

  • network interfaces follow new rules

    • no one node is in charge
    • no single NAP
      • no front desk
  • no one can "turn it off"

    • it's accessible to all
    • it's owned and operated by the people using it
    • there are no middlemen
      • no brokers between you and the stock market
      • no bank fees for managing your money
      • no HR between you and payroll

A network of computers across the globe act as one computer sharing a single state

web 3 organizationwall-e gif

what's "state" in the neighborhood analogy?

Before the internet, when a new house was built in your neighborhood, all the phone books needed to be updated to reflect the new addition. So, a new phone book was sent out to all the neighbors with the address, etc. of the new house.

  • change state of one, you change state of all
    • we are Borg πŸ€–
  • when one node registers a change in the network (state) it gossips about it to the other nodes
    • gossip spreads about the change in state to the entire network

Web3 interfaces are accessed using Web3 accounts

web 3 intro
  • "log in with your email" becomes "log in with your Web3 wallet"
  • connections to Web3 architecture occur through http connections and smart contracts
smart contracts

Organization of Web3

smart contracts
  • they are a set of instructions (like any other program) for updating state/data/transaction history
  • the updates that nodes gossip about are triggered by methods in these contracts
  • contract methods allow Web3 accounts to either view state/data/transaction history or change state/data/transaction history
  • contracts that take a lot of time to run can congest the network
    • transaction fees (GAS) help prevent this
    • they incentivize developers to optimize their code so it execute faster, and consumes fewer resources (cheaper!πŸ’Έ)

Interconnected layers of Web3

web 3 layer model
  • these layers behave like modules and can be broken apart and reconfigured to create new use cases

protocol layer

  • base layer
  • blockchain architecture
  • changes to data are stored as transaction receipts on a digital ledger
    • ledger is copied and distributed to all nodes in the network

infrastructure layer

  • interoperable building blocks
  • modules connect together for specific tasks
    • storage
    • naming service
  • smart contracts serve as the back end of Web3 infrastructure
    • contracts manage state
      • they are like interpreters
    • web3 accounts "sign" transactions the same way one might sign a lease agreement or credit card receipt

use case layer

  • where it all comes together
  • DeFi, Gaming

access points

  • top layer
  • users sign into their account(s) and send / receive crypto-currency

Web3 needs Web2... for now

handshake meme

Web2

Web3

  • Web3 infrastructure is different than web2, but still new and generally limited, so it can't operate without web2 yet
    • you still need the centralized web to access the decentralized web
    • it's not immediately apparent when you are using a Web3 app (dApp)

Let's finally talk about the "blockchain"

Blockchain

The blockchain is..

  • transaction history

the blockchain is like a stack of milk crates with each crate containing piles of various transaction receipts. The stack of crates gets higher with every new batch of receipts.

If the Phone Book behaved like a blockchain

Imagine if instead of receiving a new phone book every time a new neighbor moves in / out, you (and everyone you know) receives a single page from the phone book with just the updated information.


Data and Web3

Data from Star Trek

Data in motion

Web3 data in motionGossip protocol

Data at rest

Web3 data at restweb3 data diagram

Once data is added to the blockchain it is immutable - it can't be changed.


Time and Web3 πŸ•₯

consensus diagram

The blockchain is...

  • a clock 🀯

Time is measured in block height

  • each block added to the chain increases its height
  • some blockchains add a new block at a constant rate even if the block is empty of updates to transaction history
    • this allows for planning
      • "let's meet at 3pm" becomes "let's meet when the block height reaches 89489830340"
consensus diagram
  • community board meetings exist for the purpose of finding consensus community-related initiatives. Community-based blockchain networks are no different, and people don't always agree

  • sometimes two nodes with different block heights claim to have the most current (highest) chain

    • ( generally ) longest chain wins
  • sometimes nodes do not agree with the consensus and continue with their version of the blockchain

    • if other nodes join them, then a fork is created
      • two versions now exist
        • Ethereum vs Ethereum classic
  • sometimes infrastructure updates require a fork

    • if a node with the old version of the chain exists, the old infrastructure is still accessible

      • you can keep your old phone books, and use them, but they will become more and more unreliable
      • you can keep your computer from 1997, but it won't be able to "dial into" today's internet like it did when Austin Powers was in theaters.

trustless proofs provide integrity of the blockchain so you can trust the time it gives

types of consensus protocols
  • proof that a transaction is valid can be achieved through cryptography
    • if anything changes in one block, all subsequent blocks are immediately invalidated
      • we see this in time travel movies
        • change the past, you change the future
    • mining or Proof of Work (PoW) is how BitCoin and Ethereum create trust in their networks
    • PoW has become very energy-intensive as the blockchains that rely on it continue to grow
      • other proof concepts are being employed in new and existing blockchain networks to address these and related issues

Your Relationship with Web3

time: enabled by a chain of discrete β€œdata moments”

identity: enabled by public/private key cryptography

money: time + value

ownership: identity + money

provenance: identity + money + time

Identity 🀳

types of identification protocols
  • your web3 account is your identity
  • no Oauth
  • your offline identity is yours to reveal or keep hidden as you see fit
  • the account(s) you use to explore the space build reputation
    • reputation / street cred helps build trust in the platform
  • active engagement in the community is core to a successful, community-run web

Ownership πŸ”‘

diagram of ownership in web3
  • you own your data, and you own the network

    • no. seriously!
    • everything is flipped on its head
    • you earn money from simply engaging the network
    • ad companies pay you to see their ads rather than google
  • networks have their own economies based on their specific token or crypto-currency

    • Bitcoin, ether, doge, $NEAR
      • if it's not Bitcoin, then it's an altcoin
    • tokens in your wallet are yours to do as you wish
      • if your country freezes bank accounts, your crypto is still safe and accessible
    • digital assets are yours
      • whatever digital assets are associated with your account are yours for as long as you desire
      • there is no repo man
      • you are your own security

Structure of Web3 πŸ›οΈ

centralized vs decentralized internet
  • Web3 is decentralized

    • there is no single point of entry or failure
    • if one node goes offline, the data is preserved on all the other nodes
    • no one controls the network
    • everyone controls the network
    • the wealth that is generated by the network is distributed among the people using it
  • Web3 relies on Web2 to exist

    • Web3's infrastructure is decentralized
    • Web3's access layer relies on Web2 servers
    • contracts compile to webassembly so they can run in Web2 browsers

Quiz

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Last Updated: 5/9/2022, 3:20:19 PM