A Warm Welcome to Web3 and the Future of the Internet
Let's take a look back at the internet's history and see where we're going — and why.
Tim Berners Lee had a problem. He was at CERN, the world's largest particle physics factory, at the time. The institute's stated goal was to study the simplest particles with the most sophisticated scientific instruments. The institute completed the LEP Tunnel in 1988, a 27 kilometer ring. This was Europe's largest civil engineering project (to study smaller particles — electrons).
The problem Tim Berners Lee found was information loss, not particle physics. CERN employed a thousand people in 1989. Due to team size and complexity, people often struggled to recall past project information. While these obstacles could be overcome, high turnover was nearly impossible. Berners Lee addressed the issue in a proposal titled ‘Information Management'.
When a typical stay is two years, data is constantly lost. The introduction of new people takes a lot of time from them and others before they understand what is going on. An emergency situation may require a detective investigation to recover technical details of past projects. Often, the data is recorded but cannot be found. — Information Management: A Proposal
He had an idea. Create an information management system that allowed users to access data in a decentralized manner using a new technology called ‘hypertext'.
To quote Berners Lee, his proposal was “vague but exciting...”. The paper eventually evolved into the internet we know today. Here are three popular W3C standards used by billions of people today:
(credit: CERN)
HTML (Hypertext Markup)
A web formatting language.
URI (Unique Resource Identifier)
Each web resource has its own “address”. Known as ‘a URL'.
HTTP (Hypertext Transfer Protocol)
Retrieves linked resources from across the web.
These technologies underpin all computer work. They were the seeds of our quest to reorganize information, a task as fruitful as particle physics.
Tim Berners-Lee would probably think the three decades from 1989 to 2018 were eventful. He'd be amazed by the billions, the inspiring, the novel. Unlocking innovation at CERN through ‘Information Management'.
The fictional character would probably need a drink, walk, and a few deep breaths to fully grasp the internet's impact. He'd be surprised to see a few big names in the mix.
Then he'd say, "Something's wrong here."
We should review the web's history before going there. Was it a success after Berners Lee made it public? Web1 and Web2: What is it about what we are doing now that so many believe we need a new one, web3?
Per Outlier Ventures' Jamie Burke:
Web 1.0 was read-only.
Web 2.0 was the writable
Web 3.0 is a direct-write web.
Let's explore.
Web1: The Read-Only Web
Web1 was the digital age. We put our books, research, and lives ‘online'. The web made information retrieval easier than any filing cabinet ever. Massive amounts of data were stored online. Encyclopedias, medical records, and entire libraries were put away into floppy disks and hard drives.
In 2015, the web had around 305,500,000,000 pages of content (280 million copies of Atlas Shrugged).
Initially, one didn't expect to contribute much to this database. Web1 was an online version of the real world, but not yet a new way of using the invention.
One gets the impression that the web has been underutilized by historians if all we can say about it is that it has become a giant global fax machine. — Daniel Cohen, The Web's Second Decade (2004)
That doesn't mean developers weren't building. The web was being advanced by great minds. Web2 was born as technology advanced.
Web2: Read-Write Web
Remember when you clicked something on a website and the whole page refreshed? Is it too early to call the mid-2000s ‘the good old days'?
Browsers improved gradually, then suddenly. AJAX calls augmented CGI scripts, and applications began sending data back and forth without disrupting the entire web page. One button to ‘digg' a post (see below). Web experiences blossomed.
In 2006, Digg was the most active ‘Web 2.0' site. (Photo: Ethereum Foundation Taylor Gerring)
Interaction was the focus of new applications. Posting, upvoting, hearting, pinning, tweeting, liking, commenting, and clapping became a lexicon of their own. It exploded in 2004. Easy ways to ‘write' on the internet grew, and continue to grow.
Facebook became a Web2 icon, where users created trillions of rows of data. Google and Amazon moved from Web1 to Web2 by better understanding users and building products and services that met their needs.
Business models based on Software-as-a-Service and then managing consumer data within them for a fee have exploded.
Web2 Emerging Issues
Unbelievably, an intriguing dilemma arose. When creating this read-write web, a non-trivial question skirted underneath the covers. Who owns it all?
You have no control over [Web 2] online SaaS. People didn't realize this because SaaS was so new. People have realized this is the real issue in recent years.
Even if these organizations have good intentions, their incentive is not on the users' side.
“You are not their customer, therefore you are their product,” they say. With Laura Shin, Vitalik Buterin, Unchained
A good plot line emerges. Many amazing, world-changing software products quietly lost users' data control.
For example: Facebook owns much of your social graph data. Even if you hate Facebook, you can't leave without giving up that data. There is no ‘export' or ‘exit'. The platform owns ownership.
While many companies can pull data on you, you cannot do so.
On the surface, this isn't an issue. These companies use my data better than I do! A complex group of stakeholders, each with their own goals. One is maximizing shareholder value for public companies. Tim Berners-Lee (and others) dislike the incentives created.
“Show me the incentive and I will show you the outcome.” — Berkshire Hathaway's CEO
It's easy to see what the read-write web has allowed in retrospect. We've been given the keys to create content instead of just consume it. On Facebook and Twitter, anyone with a laptop and internet can participate. But the engagement isn't ours. Platforms own themselves.
Web3: The ‘Unmediated’ Read-Write Web
Tim Berners Lee proposed a decade ago that ‘linked data' could solve the internet's data problem.
However, until recently, the same principles that allowed the Web of documents to thrive were not applied to data...
The Web of Data also allows for new domain-specific applications. Unlike Web 2.0 mashups, Linked Data applications work with an unbound global data space. As new data sources appear on the Web, they can provide more complete answers.
At around the same time as linked data research began, Satoshi Nakamoto created Bitcoin. After ten years, it appears that Berners Lee's ideas ‘link' spiritually with cryptocurrencies.
What should Web 3 do?
Here are some quick predictions for the web's future.
Users' data:
Users own information and provide it to corporations, businesses, or services that will benefit them.
Defying censorship:
No government, company, or institution should control your access to information (1, 2, 3)
Connect users and platforms:
Create symbiotic rather than competitive relationships between users and platform creators.
Open networks:
“First, the cryptonetwork-participant contract is enforced in open source code. Their voices and exits are used to keep them in check.” Dixon, Chris (4)
Global interactivity:
Transacting value, information, or assets with anyone with internet access, anywhere, at low cost
Self-determination:
Giving you the ability to own, see, and understand your entire digital identity.
Not pull, push:
‘Push' your data to trusted sources instead of ‘pulling' it from others.
Where Does This Leave Us?
Change incentives, change the world. Nick Babalola
People believe web3 can help build a better, fairer system. This is not the same as equal pay or outcomes, but more equal opportunity.
It should be noted that some of these advantages have been discussed previously. Will the changes work? Will they make a difference? These unanswered questions are technical, economic, political, and philosophical. Unintended consequences are likely.
We hope Web3 is a more democratic web. And we think incentives help the user. If there’s one thing that’s on our side, it’s that open has always beaten closed, given a long enough timescale.
We are at the start.
More on Web3 & Crypto
Alex Bentley
3 years ago
Why Bill Gates thinks Bitcoin, crypto, and NFTs are foolish
Microsoft co-founder Bill Gates assesses digital assets while the bull is caged.
Bill Gates is well-respected.
Reasonably. He co-founded and led Microsoft during its 1980s and 1990s revolution.
After leaving Microsoft, Bill Gates pursued other interests. He and his wife founded one of the world's largest philanthropic organizations, Bill & Melinda Gates Foundation. He also supports immunizations, population control, and other global health programs.
When Gates criticized Bitcoin, cryptocurrencies, and NFTs, it made news.
Bill Gates said at the 58th Munich Security Conference...
“You have an asset class that’s 100% based on some sort of greater fool theory that somebody’s going to pay more for it than I do.”
Gates means digital assets. Like many bitcoin critics, he says digital coins and tokens are speculative.
And he's not alone. Financial experts have dubbed Bitcoin and other digital assets a "bubble" for a decade.
Gates also made fun of Bored Ape Yacht Club and NFTs, saying, "Obviously pricey digital photographs of monkeys will help the world."
Why does Bill Gates dislike digital assets?
According to Gates' latest comments, Bitcoin, cryptos, and NFTs aren't good ways to hold value.
Bill Gates is a better investor than Elon Musk.
“I’m used to asset classes, like a farm where they have output, or like a company where they make products,” Gates said.
The Guardian claimed in April 2021 that Bill and Melinda Gates owned the most U.S. farms. Over 242,000 acres of farmland.
The Gates couple has enough farmland to cover Hong Kong.
Bill Gates is a classic investor. He wants companies with an excellent track record, strong fundamentals, and good management. Or tangible assets like land and property.
Gates prefers the "old economy" over the "new economy"
Gates' criticism of Bitcoin and cryptocurrency ventures isn't surprising. These digital assets lack all of Gates's investing criteria.
Volatile digital assets include Bitcoin. Their costs might change dramatically in a day. Volatility scares risk-averse investors like Gates.
Gates has a stake in the old financial system. As Microsoft's co-founder, Gates helped develop a dominant tech company.
Because of his business, he's one of the world's richest men.
Bill Gates is invested in protecting the current paradigm.
He won't invest in anything that could destroy the global economy.
When Gates criticizes Bitcoin, cryptocurrencies, and NFTs, he's suggesting they're a hoax. These soapbox speeches are one way he protects his interests.
Digital assets aren't a bad investment, though. Many think they're the future.
Changpeng Zhao and Brian Armstrong are two digital asset billionaires. Two crypto exchange CEOs. Binance/Coinbase.
Digital asset revolution won't end soon.
If you disagree with Bill Gates and plan to invest in Bitcoin, cryptocurrencies, or NFTs, do your own research and understand the risks.
But don’t take Bill Gates’ word for it.
He’s just an old rich guy with a lot of farmland.
He has a lot to lose if Bitcoin and other digital assets gain global popularity.
This post is a summary. Read the full article here.
OnChain Wizard
3 years ago
How to make a >800 million dollars in crypto attacking the once 3rd largest stablecoin, Soros style
Everyone is talking about the $UST attack right now, including Janet Yellen. But no one is talking about how much money the attacker made (or how brilliant it was). Lets dig in.
Our story starts in late March, when the Luna Foundation Guard (or LFG) starts buying BTC to help back $UST. LFG started accumulating BTC on 3/22, and by March 26th had a $1bn+ BTC position. This is leg #1 that made this trade (or attack) brilliant.
The second leg comes in the form of the 4pool Frax announcement for $UST on April 1st. This added the second leg needed to help execute the strategy in a capital efficient way (liquidity will be lower and then the attack is on).
We don't know when the attacker borrowed 100k BTC to start the position, other than that it was sold into Kwon's buying (still speculation). LFG bought 15k BTC between March 27th and April 11th, so lets just take the average price between these dates ($42k).
So you have a ~$4.2bn short position built. Over the same time, the attacker builds a $1bn OTC position in $UST. The stage is now set to create a run on the bank and get paid on your BTC short. In anticipation of the 4pool, LFG initially removes $150mm from 3pool liquidity.
The liquidity was pulled on 5/8 and then the attacker uses $350mm of UST to drain curve liquidity (and LFG pulls another $100mm of liquidity).
But this only starts the de-pegging (down to 0.972 at the lows). LFG begins selling $BTC to defend the peg, causing downward pressure on BTC while the run on $UST was just getting started.
With the Curve liquidity drained, the attacker used the remainder of their $1b OTC $UST position ($650mm or so) to start offloading on Binance. As withdrawals from Anchor turned from concern into panic, this caused a real de-peg as people fled for the exits
So LFG is selling $BTC to restore the peg while the attacker is selling $UST on Binance. Eventually the chain gets congested and the CEXs suspend withdrawals of $UST, fueling the bank run panic. $UST de-pegs to 60c at the bottom, while $BTC bleeds out.
The crypto community panics as they wonder how much $BTC will be sold to keep the peg. There are liquidations across the board and LUNA pukes because of its redemption mechanism (the attacker very well could have shorted LUNA as well). BTC fell 25% from $42k on 4/11 to $31.3k
So how much did our attacker make? There aren't details on where they covered obviously, but if they are able to cover (or buy back) the entire position at ~$32k, that means they made $952mm on the short.
On the $350mm of $UST curve dumps I don't think they took much of a loss, lets assume 3% or just $11m. And lets assume that all the Binance dumps were done at 80c, thats another $125mm cost of doing business. For a grand total profit of $815mm (bf borrow cost).
BTC was the perfect playground for the trade, as the liquidity was there to pull it off. While having LFG involved in BTC, and foreseeing they would sell to keep the peg (and prevent LUNA from dying) was the kicker.
Lastly, the liquidity being low on 3pool in advance of 4pool allowed the attacker to drain it with only $350mm, causing the broader panic in both BTC and $UST. Any shorts on LUNA would've added a lot of P&L here as well, with it falling -65% since 5/7.
And for the reply guys, yes I know a lot of this involves some speculation & assumptions. But a lot of money was made here either way, and I thought it would be cool to dive into how they did it.
Faisal Khan
2 years ago
4 typical methods of crypto market manipulation
Market fraud
Due to its decentralized and fragmented character, the crypto market has integrity difficulties.
Cryptocurrencies are an immature sector, therefore market manipulation becomes a bigger issue. Many research have attempted to uncover these abuses. CryptoCompare's newest one highlights some of the industry's most typical scams.
Why are these concerns so common in the crypto market? First, even the largest centralized exchanges remain unregulated due to industry immaturity. A low-liquidity market segment makes an attack more harmful. Finally, market surveillance solutions not implemented reduce transparency.
In CryptoCompare's latest exchange benchmark, 62.4% of assessed exchanges had a market surveillance system, although only 18.1% utilised an external solution. To address market integrity, this measure must improve dramatically. Before discussing the report's malpractices, note that this is not a full list of attacks and hacks.
Clean Trading
An investor buys and sells concurrently to increase the asset's price. Centralized and decentralized exchanges show this misconduct. 23 exchanges have a volume-volatility correlation < 0.1 during the previous 100 days, according to CryptoCompares. In August 2022, Exchange A reported $2.5 trillion in artificial and/or erroneous volume, up from $33.8 billion the month before.
Spoofing
Criminals create and cancel fake orders before they can be filled. Since manipulators can hide in larger trading volumes, larger exchanges have more spoofing. A trader placed a 20.8 BTC ask order at $19,036 when BTC was trading at $19,043. BTC declined 0.13% to $19,018 in a minute. At 18:48, the trader canceled the ask order without filling it.
Front-Running
Most cryptocurrency front-running involves inside trading. Traditional stock markets forbid this. Since most digital asset information is public, this is harder. Retailers could utilize bots to front-run.
CryptoCompare found digital wallets of people who traded like insiders on exchange listings. The figure below shows excess cumulative anomalous returns (CAR) before a coin listing on an exchange.
Finally, LAYERING is a sequence of spoofs in which successive orders are put along a ladder of greater (layering offers) or lower (layering bids) values. The paper concludes with recommendations to mitigate market manipulation. Exchange data transparency, market surveillance, and regulatory oversight could reduce manipulative tactics.
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Tim Denning
3 years ago
Read These Books on Personal Finance to Boost Your Net Worth
And retire sooner.
Books can make you filthy rich.
If you apply what you learn. In 2011, I was broke and had broken dreams.
Someone suggested I read finance books. One Up On Wall Street was his first recommendation.
Finance books were my crack.
I've read every money book since then. Some are good, but most stink.
These books will make you rich.
The Almanack of Naval Ravikant by Eric Jorgenson
This isn't a cliche book.
This book was inspired by a How to Get Rich tweet thread.
It’s one of the best tweets I’ve ever read.
Naval thinks differently. He nukes ordinary ideas. I've never heard better money advice.
Eric Jorgenson wrote a book about this tweet thread with Navals permission. A must-read, easy-to-digest book.
Best quote
Seek wealth, not money or status. Wealth is having assets that earn while you sleep. Money is how we transfer time and wealth. Status is your place in the social hierarchy — Naval
Morgan Housel's The Psychology of Money
Many finance books advise investing like a dunce.
They almost all peddle the buy an index fund BS. Different book.
It's about money-making psychology. Because any fool can get rich and drunk on their ego. Few can consistently make money.
Each chapter is short. A single-page chapter breaks all book publishing rules.
Best quote
Spending money to show people how much money you have is the fastest way to have less money — Morgan Housel
J.L. Collins' The Simple Path to Wealth
Most of the best money books were written by bloggers.
JL Collins blogs. This easy-to-read book was written for his daughter.
This book popularized the phrase F You Money. With enough money in your bank account and investment portfolio, you can say F You more.
A bad boss is an example. You can leave instead of enduring his wrath.
You can then sit at home and look for another job while financially secure. JL says its mind-freedom is powerful.
Best phrasing
You own the things you own and they in turn own you — J.L. Collins
Tony Robbins' Unshakeable
I like Tony. This book makes me sweaty.
Tony interviews the world's top financiers. He interviews people who rarely do so.
This book taught me all-weather portfolio. It's a way to invest in different asset classes in good, bad, recession, or depression times.
Look at it:
Investing isn’t about buying one big winner — that’s gambling. It’s about investing in a diversified portfolio of assets.
Best phrasing
The best opportunities come in times of maximum pessimism — Tony Robbins
Ben Graham's The Intelligent Investor
This book helped me distinguish between a spectator and an investor.
Spectators are those who shout that crypto, NFTs, or XYZ platform will die.
Tourists. They want attention and to say "I told you so." They make short-term and long-term predictions like fortunetellers. LOL. Idiots.
Benjamin Graham teaches smart investing. You'll buy a long-term asset. To be confident in recessions, use dollar-cost averaging.
Best phrasing
Those who do not remember the past are condemned to repeat it. — Benjamin Graham
The Napoleon Hill book Think and Grow Rich
This classic book introduced positive thinking to modern self-help.
Lazy pessimists can't become rich. No way.
Napoleon said, "Thoughts create reality."
No surprise that he discusses obsession and focus in this book. They are the fastest ways to make more money to invest in time and wealth-protecting assets.
Best phrasing
The starting point of all achievement is DESIRE. Keep this constantly in mind. Weak desire brings weak results, just as a small fire makes a small amount of heat — Napoleon Hill
Ramit Sethi's book I Will Teach You To Be Rich
This book is mostly good. The part about credit cards is trash.
Avoid credit card temptations. I don't care about their airline points.
This book teaches you to master money basics (that many people mess up) then automate it so your monkey brain doesn't ruin your financial future.
The book includes great negotiation tactics to help you make more money in less time.
Best quote
The 85 Percent Solution: Getting started is more important than becoming an expert — Ramit Sethi
David Bach's The Automatic Millionaire
You've probably met a six- or seven-figure earner who's broke. All their money goes to useless things like cars.
Money isn't as essential as what you do with it. David teaches how to automate your earnings for more money.
Compounding works once investing is automated. So you get rich.
His strategy eliminates luck and (almost) guarantees millionaire status.
Best phrasing
Every time you earn one dollar, make sure to pay yourself first — David Bach
Thomas J. Stanley's The Millionaire Next Door
Thomas defies the definition of rich.
He spends much of the book highlighting millionaire traits he's studied.
Rich people are quiet, so you wouldn't know they're wealthy. They don't earn much money or drive a BMW.
Thomas will give you the math to get started.
Best phrasing
I am not impressed with what people own. But I’m impressed with what they achieve. I’m proud to be a physician. Always strive to be the best in your field…. Don’t chase money. If you are the best in your field, money will find you. — Thomas J. Stanley
by Bill Perkins "Die With Zero"
Let’s end with one last book.
Bill's book angered many people. He says we spend too much time saving for retirement and die rich. That bank money is lost time.
Your grandkids could use the money. When children inherit money, they become lazy, entitled a-holes.
Bill wants us to spend our money on life-enhancing experiences. Stop saving money like monopoly monkeys.
Best phrasing
You should be focusing on maximizing your life enjoyment rather than on maximizing your wealth. Those are two very different goals. Money is just a means to an end: Having money helps you to achieve the more important goal of enjoying your life. But trying to maximize money actually gets in the way of achieving the more important goal — Bill Perkins
Adrien Book
3 years ago
What is Vitalik Buterin's newest concept, the Soulbound NFT?
Decentralizing Web3's soul
Our tech must reflect our non-transactional connections. Web3 arose from a lack of social links. It must strengthen these linkages to get widespread adoption. Soulbound NFTs help.
This NFT creates digital proofs of our social ties. It embodies G. Simmel's idea of identity, in which individuality emerges from social groups, just as social groups evolve from people.
It's multipurpose. First, gather online our distinctive social features. Second, highlight and categorize social relationships between entities and people to create a spiderweb of networks.
1. 🌐 Reducing online manipulation: Only socially rich or respectable crypto wallets can participate in projects, ensuring that no one can create several wallets to influence decentralized project governance.
2. 🤝 Improving social links: Some sectors of society lack social context. Racism, sexism, and homophobia do that. Public wallets can help identify and connect distinct social groupings.
3. 👩❤️💋👨 Increasing pluralism: Soulbound tokens can ensure that socially connected wallets have less voting power online to increase pluralism. We can also overweight a minority of numerous voices.
4. 💰Making more informed decisions: Taking out an insurance policy requires a life review. Why not loans? Character isn't limited by income, and many people need a chance.
5. 🎶 Finding a community: Soulbound tokens are accessible to everyone. This means we can find people who are like us but also different. This is probably rare among your friends and family.
NFTs are dangerous, and I don't like them. Social credit score, privacy, lost wallet. We must stay informed and keep talking to innovators.
E. Glen Weyl, Puja Ohlhaver and Vitalik Buterin get all the credit for these ideas, having written the very accessible white paper “Decentralized Society: Finding Web3’s Soul”.
Sean Bloomfield
3 years ago
How Jeff Bezos wins meetings over
We've all been there: You propose a suggestion to your team at a meeting, and most people appear on board, but a handful or small minority aren't. How can we achieve collective buy-in when we need to go forward but don't know how to deal with some team members' perceived intransigence?
Steps:
Investigate the divergent opinions: Begin by sincerely attempting to comprehend the viewpoint of your disagreeing coworkers. Maybe it makes sense to switch horses in the middle of the race. Have you completely overlooked a blind spot, such as a political concern that could arise as an unexpected result of proceeding? This is crucial to ensure that the person or people feel heard as well as to advance the goals of the team. Sometimes all individuals need is a little affirmation before they fully accept your point of view.
It says a lot about you as a leader to be someone who always lets the perceived greatest idea win, regardless of the originating channel, if after studying and evaluating you see the necessity to align with the divergent position.
If, after investigation and assessment, you determine that you must adhere to the original strategy, we go to Step 2.
2. Disagree and Commit: Jeff Bezos, CEO of Amazon, has had this experience, and Julie Zhuo describes how he handles it in her book The Making of a Manager.
It's OK to disagree when the team is moving in the right direction, but it's not OK to accidentally or purposefully damage the team's efforts because you disagree. Let the team know your opinion, but then help them achieve company goals even if they disagree. Unknown. You could be wrong in today's ever-changing environment.
So next time you have a team member who seems to be dissenting and you've tried the previous tactics, you may ask the individual in the meeting I understand you but I don't want us to leave without you on board I need your permission to commit to this approach would you give us your commitment?