Will Web3 Take Cryptocurrency Into The Mainstream? – Tech Tribune France


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In recent months, crypto and Web3 have struggled to escape it. From the iconic Staples Center being renamed the Crypto.com arena to crypto advertisements reaching record volumes in the London Undergroundcrypto mania is a worldwide phenomenon.

Web3 crypto promises to revolutionize the world, but is it really the future? Not everyone agrees.

What is Web3?

Web3 is an attempt to create a decentralized Internet, allowing users to take over large organizations such as Facebook, Amazon and Google and instead use multi-site and trustless platforms. Many Web3 projects use blockchain technology and cryptocurrencies.

Forbes Contributor Bernard Mare explained the Web3-crypto link, saying, “A good example of a trustless Web3 transaction would be sending Bitcoins directly to another person, not through an online exchange or a wallet stored on a centralized server.

However, Web3 is not limited to transactions. Traditional platforms, including social media sites, are replicated in Web3.

An example of this is Tweet, a Twitter-like application powered by Bitcoin SV. Posting to the site requires microtransactions, but users receive a small amount of BSV for each interaction their posts receive. The content is permanently recorded on the BSV blockchain.

Web3 versus Web2

One of the main drivers for the development of Web3 is the increasing centralization of Web2.

According to G2 in 2021, the 10 best-selling hosts checked 24% of the web hosting market.

Allie Fitzgibbon, writing for the University of London, said: “Google manages over 40,000 searches every second, or more than 1.2 trillion searches per year. »

She also added that Facebook’s active users have exceeded a third of the world’s population, or 2.74 billion.

The dominance of a few large tech companies has sparked the interest of the US government, which has set up a committee to investigate competition in digital markets.

According to committee report“The online platforms studied by the subcommittee – Amazon, Apple, Facebook and Google – also play an important role in our economy and society as the underlying infrastructure for the exchange of communications, information and of goods and services. As of September 2020, the combined valuation of these platforms is over $5 trillion, more than a third of the value of the S&P 100.”

Web3 developers aim to provide an alternative to the “big four” digital companies, giving users new platforms where they control their own data.

Web3 Crypto Projects – What Makes Something Web3?

The definition of Web3 is nebulous. For some, anything decentralized matters. For others, Web3 means something that includes blockchain.

Some common categories of Web3 projects include:

Decentralized platforms

Decentralized platforms, such as Diaspora, Mastodon, and PeerTube, aim to replace centralized providers like Facebook, Twitter, and YouTube. These platforms do not run on a blockchain and do not use tokens to monetize themselves, but still fit certain definitions.

However, as Columbia University researchers Ethan Zuckerman and Chand Rajendra-Nicolucci explained, “Decentralized platforms face significant challenges for their widespread adoption. Mainly, solving their usability difficulties and overcoming the massive network effects of centralized platforms.

Zuckerman and Rajendra-Nicolucci are unsure whether decentralized platforms can meet these challenges. Instead, they believe the key to widespread adoption will require integration with existing platforms.

Another necessity, according to the researchers? Government intervention that forces current social platforms to adopt open standards or share their APIs.

“Ironically,” they said, “it appears that for the decentralized movement to succeed, it may have to partner with the governments it once hoped to transcend.”

Decentralized Autonomous Bodies

DAOs, or Decentralized Autonomous Organizations, are the cornerstone of many blockchain and Web3 projects.

The Ethereum Foundation gives the following definition of DAOs“Think of them as a native internet business owned and managed collectively by its members. They have built-in treasuries that no one has the authority to access without group approval. Decisions are governed by proposals and votes to ensure everyone in the organization has a voice.”

The decentralized nature of DAOs is their biggest selling point. A CEO can’t spend money on a whim, a sketchy CFO can’t cook the books. Everything is transparent and, according to the Foundation, “the rules relating to expenses are integrated into the DAO via its code”.

Two examples of DAOs that run on the Ethereum Blockchain are ManufacturerDAO and MolochDAO.

MakerDAO is a community that governs the Maker Protocol, which generates a digital currency called Dai. Users can then spend Dai on games, decentralized finance (DeFi) tools and more.

MolochDAO is a platform that issues funds for other Ethereum-based projects. Those with voting rights in the DAO can vote on developer proposals and decide which projects to give grants to.

Challenge

DeFi, or Decentralized Finance, describes everything from DEX (Decentralized Exchange) projects to blockchain-powered peer-to-peer lending platforms.

Financial journalist Taylor Locke explained“With DeFi lending, users can lend cryptocurrency like a traditional bank does with fiat currency and earn interest as a lender. Borrowing and lending are the most common use cases for DeFi applications, but there are also many increasingly complex actions, such as becoming a liquidity provider for a decentralized exchange.”

The initial appeal of DeFi was that it offered banking-like services to people who were unable to access traditional financial services. However, as tax regulations evolve, it is unclear whether DeFi will remain attractive in the Western world.

For example, the Britain’s HMRC recently ruled that if someone stakes tokens on a DeFi platform, giving the platform use of the tokens for lending, this could be treated as an assignment for tax purposes.

Other countries are also reassessing their treatment of taxation on cryptocurrency. Indian Finance Minister Nirmala Sitharaman recently announced a 30% tax on crypto-assets. In her post-budget speech, she said, “Taxation does not automatically bring legitimacy.

Web3 Crypto Projects to Watch

In addition to financial applications of cryptocurrency, some developers are working on other ways to harness the power of decentralization. Some interesting Web3 crypto projects to pay attention to include:

FileCoin

the FileCoin The network combines with the IPFS decentralized file storage protocol to provide a Web3 storage network for data.

Storage providers are rewarded for storing files in FileCoin, while customers buy the service to store data in a decentralized cloud environment.

To return

the To return The network is similar to FileCoin, except instead of paying for storage, users can purchase GPU power.

Render gives developers, academics, and businesses access to distributed graphics rendering power, delivering state-of-the-art rendering systems on demand.

Chain link

One of the biggest problems with blockchain is the “oracle problem.” Blockchains themselves are isolated and cannot extract data from or communicate with external sources. ChainLink acts as a bridge, allowing blockchains to use data from external sources in their smart contracts.

Will Web3 really change the world?

Cryptocurrency enthusiasts believe Web3 will change the world by decentralizing the internet. However, many skeptics believe that technology alone is not the solution to today’s web problems.

Founder of Cantab Capital Partners, Dr. Ewan Kirkexplained, “The Web3 hype is just another reminder of how short-lived the tech industry’s memory is. As someone who was mining bitcoin as far back as 2012, it’s clear that Web3 is just another version of the same blockchain technology I’ve been discussing for the past decade.”

Blockchain is designed to be decentralized and immutable. This means that it is difficult to scale and the information cannot be updated, corrected or deleted.

Dr Kirk asserted that users can avoid the challenges of a distributed public ledger, saying: “You could, of course, have a private blockchain. But then, what is it for? You might as well have a private SQL database.”

Much of the current interest in Web3 focuses on monetizing web interactions. However, this interest is driven by venture capitalists, not user demand.

Developer and Technical Manager for Oyo Japan, Oskar Lindgrendescribed blockchain and Web3 as “a solution in search of a problem”.

Lindgren predicted that the current hype will soon come to an end, adding, “When investors realize that blockchain and cryptocurrency will not achieve early market adoption, we will see a collapse in business investment. working on blockchain technology and the hype about blockchain will be over.”

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Will Web3 Take Cryptocurrency Into The Mainstream? – Tech Tribune France


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