#5 Will the Internet Realize Its Potential?
Web3, Inclusiveness, Crypto Slang, & El Salvador
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HAX Weekly is written to help young investors approach investing by providing access to where the world is heading - with an unabashed focus on crypto and the metaverse. We simplify cutting-edge trends & technologies, share whatās top of mind, and discuss news & events through our ā1-2-3ā format:
1 investing/crypto concept explained in a way a 5 year old can understand
2 themes that we canāt stop thinking about
3 things (articles/tweets/memes/podcasts) that really hit the spot
1 Concept š”
āThe first internet captured the information, the 2nd internet created the framework for communication, and this third wave āweb3ā captures the consumerization of assets ā and the stakes are fuckinā highā - Gary Vaynerchuk
If your reaction is āWeb3?! Wait, when did web1 and web2 happen?ā, youāre in the right place ā¬ļø. Before we explore web3, letās first go backwards and understand what web1 and web2 were.
Web1 (1994-2005) represented the first wave of the internet by bringing all the information that lived in the physical world online, including news, commerce, media & chat. If you imagine the Internet as a person, Web1 was kinda its childhood: cute, learning how to read/walk/talk and beginning to show flashes of its potential.
While Web1 enabled users to communicate with each other, we couldnāt communicate at scale w/o needing traditional media. Web2 (2006-2020) solved all that by the invention of social networks and enabled users to communicate and connect with people all around the world via their mobile phone. This era is defined by social media (FB/IG/Twitter/Snap/YT/etc), influencers and networked experiences such as Uber. Web2 is the Internetās teenage years: making friends, being popular and expressing itself.
But for all the incredible things we (users) could do in web2, they came at a cost: we gave up our ownership. Think about what really happens when you post a pic on Instagram today: 1) you need IGās approval to post it, 2) IG owns your pic and makes $$ of it through ads and 3) all you receive are likes and follows, which you donāt own because you canāt take them with you outside of IG. Despite user content driving social networks, users are in effect indentured servants: they are at the complete mercy of big tech companies and have zero ownership. Itās the same story that we discussed last week in #4 re: not owning your digital identity. And itās in stark contrast to how the Internet was designed: as a decentralized set of technologies that enabled anyone to go online + own their presence.
Enter web3. At its core, the promise of web3 is a return to how the Internet was initially designed all powered through crypto:
Decentralized - Transactions happen peer to peer in a trustless manner without requiring a middleman.
Ownership - You own your identity, your content and your contributions.
Permissionless - Users can coordinate and interact without requiring permission of any platform or service.
If we achieve web3ās promise, you will 1) own your identity via your digital wallet, 2) own your $$ by being able to transact with whomever you want (no Paypal/Venmo/credit cards needed), 3) own your content by NFT-ing all your posts/pictures/etc, and 4) own your contributions to any communities youāre part of via tokens. You ready for this brave new world? I know I am! šÆ
So in trying to complete this Internet life metaphor (yes, I know its a stretch!) - if the trade-off we made in web2 was taking that high-paying corporate job your younger self said youād never take, web3 is all about realizing your potential by starting that company or joining that cause you always said you would. Actually, you know what? Why try to explain web3 if I can have the master @jarroddicker do it?
2 Themes On Our Mind š¤Ā
This amazing thread by @parisrouz and tweet by @_kinjalbshah below really resonated with me. For web3 to reach its promise of an an open, decentralized, and equitable future for all internet citizens, it must be inclusive ā¤ļø. It canāt devolve to a class system where the earliest into the space own the most valuable assets and make the rules as part of the most exclusive groups. Otherwise, itās no better than the system weāre attempting to replace. So while itās all fun and games to get š-popping returns from investing in crypto or flipping NFTs, the end game needs to be democratizing ownership for all.
Ok, we gotta talk about Loot, where NFTs of text like these were selling for over $100K last week (I was a small part of a PartyBid that bought one for $135K š):
I can def survive a year in the wilderness with this bag of loot. Wait, what?!?! The guys at Bankless do a great job covering Loot here, but this thread by @tandavas really hits the nail on the head on what makes this NFT project unique. This space is flying a million miles a hour, so if you feel lost, behind, or have extreme FOMO - donāt worry, we all are! Just keep learning and appreciate the potential (and power) of decentralized communities.
3 Things To Check Out š
Crypto / NFT slang has always been the most fun part of crypto - but for newcomers, it can be difficult to understand and can make you feel unwelcome or an outsider to the crypto community. That is never the intention - so I loved this thread by @punk6529 explaining what the jargon means. wgmi
LOVED this podcast by the inimitable Raoul Pal on why crypto matters, why you must invest, and its immense potential. Itās truly a MUST-LISTEN. So many gems in here, but one of my favorites is investing in crypto today is akin to having access to the next hot startup that only rich venture capitalists do (but not the rest of us). Donāt let the opportunity pass! What are you waiting for?
This week, El Salvador is officially making Bitcoin legal tender!! So many interesting things here (and super bullish for bitcoin IMO), but one of the more interesting tidbits is that the country is launching its own wallet called Chivo which comes pre-loaded with $30 worth of bitcoin to encourage adoption. You remember how annoyingly painful it was for the government to give us stimulus money via paper checks? The future feels like the government giving airdrops to our wallets.
BONUS: Huge news from XMTP raising a massive fundraising round. XMTP is aiming to build web3-native communication (decentralized/permissionless) b/w digital wallets, which as we discussed last week in #4, will be your digital identity. Instead of relying on FB/Snap/etc to chat to your friends (and them selling your data to advertisers), own it yourself. Web3 canāt stop, wonāt stop š¤
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Until next week - always be learning,
Karthik