Article Compilation: Alpha Rabbit
preamble
a16z is the pioneer of the American crypto fund. It had systematic research and layout on the entire overseas Crypto market earlier. Learning a16z's report is of certain value for us to understand the entire crypto market.
There are relatively few articles on the market about the systematic explanation of Web3. This article is relatively simple and easy to understand. As a basic introduction, it is suitable for readers who are interested in Web3, and can understand the concept of the entire Web3 ecology from a macro perspective.
preamble
We firmly believe that the innovation of the next wave of computing,will emerge on the basis of distributed technologies, innovations will also include comprehensive organizational forms of the new economy。
The development of Web3 has gone beyond its own financial origins and boundaries (here refers to the Crypto track originating from Bitcoin in the financial field). The composition of the entire Web3 community (Community) covers from art practitioners to small businessmen, as well as the general public. therefore,Smart regulation must consider the diversity of Web3 potential users and the diversification of application cases。
Decentralized technology provides an alternative to the current digital world (controlled by monopoly forces such as technological oligarchy):Open, democratized systems build infrastructure that can power the economies and institutions of the future. To realize this vision,Depends on how governments and the private sector work together, including developing a regulatory framework that encourages innovation and manages the risks associated with various applications。
a16z is the largest investor in the Web3 field: the investment team includes former officials from various departments of the US government, a16ZRecognize that this important new industry (Web3) needs to be regulated responsibly. When the decentralized system gradually becomes mainstream, we look forward to working with regulators and legislators to formulate clear rules, which will benefit consumers, entrepreneurs and creators。
The encryption field is technology-oriented and iterates rapidly. Therefore, this Web3 introductory manual will introduce some interesting application cases, and each case is accompanied by an additional list of reading materials, and interested friends can read further.Table of contents。
Table of contents
Web3 application App
Decentralized Autonomous Organization (DAO)
Decentralized Finance (DeFi)
Stablecoins and Central Bank Digital Currencies (CBDCs)
Privacy and Digital Infrastructure
Creator Economy
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What is a Web3 App (application)?
The first era of the Internet (1980s to early 2000s),Services built on open protocols(such as TCP, IP, SMTP, HTTP: understand it as a network communication protocol), creating a stable and fair competition environment, and building an Internet ecosystem on this basis. In this chaotic innovation period, Internet giants We start a business and develop it.
The second era of the Internet (from the mid-2000s to the present),Enterprises build a second layer of proprietary, closed protocols on top of the Internet's open protocols. Since the era of centralization, profit-oriented technology companies represented by Google, Apple, Facebook, and Amazon have developed software and provided services that quickly surpassed the first generation of open protocols. For example:
Simple Mail Transfer Protocol (SMTP) is an open protocol for implementing electronic mail. Google owns Gmail (the service), Microsoft owns Outlook, but neither company owns the email-enabled protocol itself.
But in many cases, these closed agreements aren't the tech companies' core business: Individuals don't pay Google to use Gmail, but Gmail powers Google's core business of collecting data and selling ads. This is the world of Web 2.0, in the Web 2.0 world:"If the user does not pay, the user is not the customer, but the product"。
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Why is Web3 App important?
Web3's decentralized network provides an alternative to the status quo of the fragmented digital age。
Centralized networks that give billions of people access to extremely advanced technologies, many for free, also stifle innovation:Enterprises with a network have unilateral powers, such as who can obtain the right to use the network? How to distribute income? What features are supported? How to ensure user data security, etc. This makes it harder for other groups such as startups and creators to grow their businesses, as they have to worry and watch for central platforms to change the rules and take away their users or profits。
The challenge of decentralized networks in the traditional sense is that they are public goods (products with non-rivalry in consumption or use and non-exclusive benefits in terms of benefits), if there is no central body to make decisions and obtain profits,It is difficult to incentivize the maintenance and development of decentralized networks. However, Crypto can solve the problem of motivating development by providing economic incentives through decentralized coordination. Web3 will put power in the hands of communities, not corporations。
Decentralized networks are an important counterforce to fragile centralized applications: For example, in June 2021, Fastly was paralyzed due to software vulnerabilities, and users could not connect to the homepages of well-known websites such as The New York Times, The Guardian, Twitch, Reddit, etc.first level title。
What are DAOs?
What are DAOs?
A DAO is a community of members online, governed by consensus rather than centralized leadership.decentralized
decentralized: The rules cannot be changed by a single character or a centralized party;
autonomy: Voting statistics and decision execution follow the logic written into smart contracts to calculate votes and execute decisions without human intervention;
organizational characteristics: The organization of DAO can coordinate the activities among distributed community stakeholders;
Although the concept of DAO sounds more complicated, there are also examples of DAO applications in our real life: like Publix Grocery Stores, Green Bay Packer, are examples of public ownership structures without a centralized leader.
(Publix Grocery Stores are community-based grocery stores owned by employees)
DAO represents"On-chain governance"use.For example, in traditional corporate governance, a company would have a charter that dictates certain policies, how to elect a board of directors. DAOs can code similar policies and regulations into smart contracts, extending this concept to the digital world.
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Why are DAOs important?
DAO is an emerging organizational governance model:It's for a new kind of organization built around transparency and inclusivity. These principles can be applied to a variety of organizations, including not-for-profit organizations, collectives, cooperatives, and investment funds。
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What is DeFi?
decentralized finance or"DeFi "Refers to decentralized applications in the financial field (savings, loans, and foreign exchange).
Decentralized applications (dApps) are computer applications whose code is written in smart contracts based on related domains. These contracts are often collectively referred to as"Protocols"The difference between dApps and ordinary applications is that dApps are usually permanent. As long as the blockchain hosting the relevant protocol exists, the dApp will exist and cannot be changed or manipulated by malicious actors.. aApps are also open, meaning that any computer can participate in the network and access is not limited to a single or pre-defined group.
Blockchain-based payment realizes peer-to-peer digital transactions. Before Bitcoin (BTC), digital payments had to rely on centralized record (data) managers, such as banks and credit card companies. Even if a user sends money through a service like PayPal or Venmo, what is actually being sent is a"Financial claim (IOU)"。
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Why is DeFi important?
CryptocurrenciesSupport low-cost, real-time, borderless, peer-to-peer value transfer, not limited by the business hours of mainstream financial institutions. Most importantly, cryptocurrencies have low barriers to entry.
This opens up opportunities for financially underserved regions of the world. Blockchain-based payments can open up access to financial services for the 2 billion or so unbanked people around the world. By using mobile wallets, foreign workers can send their earnings back to their families in their home countries more cheaply and conveniently.
Cryptocurrencies can provide a safer store of value for countries experiencing hyperinflation. Of course, most people think that sending money online is as easy as sending an email, but that's just the experience of the lucky few with access to advanced financial services.
For the more than 20 percent of Americans who are unbanked or underbanked, existing financial service options are slow, costly, and limited, and high barriers to entry lock millions out across the economy out of opportunity。
Blockchain-based payments may upgrade and improve the current payment system.For users without bank accounts to receive digital deposits, cryptocurrencies can be used to distribute grants efficiently, securely, and at low cost, while leveraging blockchain transparency to combat waste, fraud, and abuse of power。
If financial technology companies such as PayPal or Venmo have completely changed the front end of consumer finance, then DeFi has completely changed the back end. Specifically, DeFi has laid new pipelines and tracks to make financial services easier to use and access , audit, upgrade and build. Participating in the financial system becomes cheaper and simpler, which will lead to an unstoppable wider financial inclusion.
And, like Credit Unions (another cooperative associated with poverty and economic development microfinance programs, mainly in West Africa, Latin America, etc.), these financial services empower consumers, allowing They control the consumer financial products they use and become members of an alliance, which leads to better outcomes. Decentralized financial services embrace the core values of the open internet, including:
open to anyone in the world
Commitment to open source
Third-party developers can adapt without permission
lower cost
Security and privacy-preserving nature of encryption support
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What are Stablecoins & CBDCs?
Stablecoins are privately issued cryptocurrencies that, relative to the U.S. dollar or the euro,Stablecoins maintain a stable value over a period of time. Stablecoins backed by fiat currencies: such as stablecoins pegged to the U.S. dollar, which maintain asset reserves of fiat currencies to match the issuance value of each token. Other projects are usually stabilized by staking digital assets or algorithmic holdings that automatically execute smart contracts.secondary title。
Why are they important?
Stablecoins offer the advantages of cryptocurrencies without the volatility. Cryptocurrencies, such as Bitcoin and Ethereum, can experience huge price fluctuations within a day; stablecoins are designed to maintain a constant price, which helps stablecoins serve as an effective medium of exchange。
As low-volatility assets, stablecoins help enable on-chain transactions, including modernizing global payment systems and unlocking a wider range of financial services. A modern global payment system that provides wider access to financial services to the unbanked. They are the basic building blocks of a series of important innovations and the foundation of important innovations.
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What are privacy and digital infrastructure?
A limitation of many current blockchain networks is that they are completely transparent by design. However, cutting-edge research in the new field of cryptography,Make it possible to prove the validity of information mathematically without providing the information itselfsecondary title
Why do privacy and digital infrastructure matter?
Privacy infrastructure is very important, itNot only does it protect the user's personal data, but it fundamentally expands the application design space. Given the backdrop of massive data breaches in the Web 2.0 era, data protection must be at the heart of the next wave of technological innovation. The layout of the privacy infrastructure will enable a range of more protective applications.
Privacy infrastructure will also make people more compliant. In the existing system, users may not be willing to provide personal information to service providers or apps on the blockchain, because the information may be used to view historical transaction data that users have completed.The privacy layer helps to dispel these concerns, and users can disclose certain information to specific subjects: such as regulators, while preventing the information from being fully disclosedsecondary title
creator economy
What is the Creator Economy?
The creator economy is an emerging community of creators, such as artists, musicians, game developers, etc., who directly contact supporters (fans) and cooperate without intermediaries. Creators can obtain independent sources of income.
Fungibility means that a unit of a commodity is indistinguishable and interchangeable. For example, a $1 bill is interchangeable with any other $1 bill. At the same time, non-fungibility is an attribute of unique commodities such as artworks, collectibles, and real estate.
NFT is an unforgeable digital asset that has value due to its uniquenesssecondary title
Why is the creator economy important?
For many people, especially young people who are spending more and more time online and in digital spaces, owning digital versions of physical assets is becoming increasingly popular. Books, music, movies, photos, and more exist as digital files on hard drives or in the cloud.
When users buy NFTs, NFTs belong to users, and they can control them according to their own needs, just like buying physical objects: NFTs can be transferred, sold, mortgaged, lent, or kept for their own enjoyment. Early examples of NFTs include digital art, games, sports memorabilia and collectibles.
NFTs provide creators with a new way to make money, bypassing traditional gatekeepers (referring to the intermediary of commission), fans can directly participate in the creator's career and witness their success, the NFTs model is more beneficial to creators, They can sell their work directly without having to rely on a middleman (e.g. artists who used to sell their work at a gallery for a cut or fee from the gallery). For fans, the NFT model is better, because fans can directly become the owners of NFT, and fans can have more shares when supporting artists and creators.
Artists and creators have benefited from this new distribution model. Case in point: Artist Matt Kane has long sold oil paintings at local galleries; last year, he sold a digital artwork on the blockchain for more than $100,000. Photographer Justin Aversano takes his"Twin Flames "The 100 portraits in the series were sold as NFTs, earning more than $130,000. Former MLB player (later turned artist) Micah Johnson sold NFTs worth more than $1 million. Representative works include a digital painting sculpture and a $305,000 physical sculpture.
NFTs have a unique advantage: they are tracked using blockchain technology, so artists can earn commissions from secondary sales. The 21-year-old artist Robbie Barrat sold a digital artwork for $176 in 2018, and when the work was resold in 2021 for 100 Ethereum, he made about $11,000. 62 times more than earned in.
In the spring of 2021, as more well-known players enter the NFT field, the popularity of NFTs will explode. NBA Top Shots (officially licensed collectibles from the NBA) totaled $200 million in sales, but spent very little on marketing. Pop singer Katy Perry and NFL player Rob Gronkowski launched NFTs for fans. Like Ellen DeGeneres and the Kings of Leon (Kings of Leon), during the global pandemic of the new crown pneumonia, there are no days of performances, selling NFTs to raise funds for charity. In April 2021, Sotheby's auction house cooperated with the famous digital artist Pak to hold the first NFT auction.secondary title。
Chain game
Chain game:
Chain game:Blockchain-based games refer to games built on blockchain technology. A key difference between blockchain games and popular games such as Fortnite, Roblox, or Minecraft is that everything in the game can be traded into currency and then exchanged for resources in other games。
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Why is blockchain game important?
Blockchain games are an example of how decentralized technology can create new ways to monetize creators: Items in blockchain video games—like tools, skins, upgrades, avatars, and experience points—are NFTs owned by players, Can be sold for real world money, traded on secondary markets, and passed between games.
Blockchain games also facilitate"from playing to earning"Pattern development. With games like Axie Infinity, people can earn real-world currency by playing the game. During the COVID-19 pandemic, some Filipinos are turning to games like Axie Infinity to make money and ease the economic hardship caused by the quarantine.
Although it is still some distance away from experiencing the boundless digital world described by science fiction writers, the epidemic has indeed accelerated people's familiarity with immersive virtual experiences. For example, people use virtual identities to attend parties or meetings, and hold meetings in virtual conference rooms, all of which provide possible clues to the possible future manifestations of the Metaverse.Users of the Fortnite game buy various digital apps for their in-game identity and attend Travis Scott's concert in Fortnite (attended by over 12 million users). Although these games and platforms are still centralized platforms controlled from top to bottom by developers, these explorations have gradually begun to reveal the prospect of a future without borders-everyone can contribute to its development.
Note: The copyright of this article belongs to a16z, and the translation is for public welfare. It is only to help everyone learn together, and does not constitute any investment advice.
