What the hell is Web3 anyway?
"Web 3.0" is a trendy buzzword with a vague definition. Everyone agrees it has to do with a blockchain-based internet evolution, but what is it?
Yet, the meaning and prospects for Web3 have become hot topics in crypto communities. Big corporations use the term to gain a foothold in the space while avoiding the negative connotations of “crypto.”
But it can't be evaluated without a definition.
Among those criticizing Web3's vagueness is Cobie:
“Despite the dominie's deluge of undistinguished think pieces, nobody really agrees on what Web3 is. Web3 is a scam, the future, tokenizing the world, VC exit liquidity, or just another name for crypto, depending on your tribe.
“Even the crypto community is split on whether Bitcoin is Web3,” he adds.
The phrase was coined by an early crypto thinker, and the community has had years to figure out what it means. Many ideologies and commercial realities have driven reverse engineering.
Web3 is becoming clearer as a concept. It contains ideas. It was probably coined by Ethereum co-founder Gavin Wood in 2014. His definition of Web3 included “trustless transactions” as part of its tech stack. Wood founded the Web3 Foundation and the Polkadot network, a Web3 alternative future.
The 2013 Ethereum white paper had previously allowed devotees to imagine a DAO, for example.
Web3 now has concepts like decentralized autonomous organizations, sovereign digital identity, censorship-free data storage, and data divided by multiple servers. They intertwine discussions about the “Web3” movement and its viability.
These ideas are linked by Cobie's initial Web3 definition. A key component of Web3 should be “ownership of value” for one's own content and data.
Noting that “late-stage capitalism greedcorps that make you buy a fractionalized micropayment NFT on Cardano to operate your electric toothbrush” may build the new web, he notes that “crypto founders are too rich to care anymore.”
Very Important
Many critics of Web3 claim it isn't practical or achievable. Web3 critics like Moxie Marlinspike (creator of sslstrip and Signal/TextSecure) can never see people running their own servers. Early in January, he argued that protocols are more difficult to create than platforms.
While this is true, some projects, like the file storage protocol IPFS, allow users to choose which jurisdictions their data is shared between.
But full decentralization is a difficult problem. Suhaza, replying to Moxie, said:
”People don't want to run servers... Companies are now offering API access to an Ethereum node as a service... Almost all DApps interact with the blockchain using Infura or Alchemy. In fact, when a DApp uses a wallet like MetaMask to interact with the blockchain, MetaMask is just calling Infura!
So, here are the questions: Web3: Is it a go? Is it truly decentralized?
Web3 history is shaped by Web2 failure.
This is the story of how the Internet was turned upside down...
Then came the vision. Everyone can create content for free. Decentralized open-source believers like Tim Berners-Lee popularized it.
Real-world data trade-offs for content creation and pricing.
A giant Wikipedia page married to a giant Craig's List. No ads, no logins, and a private web carve-up. For free usage, you give up your privacy and data to the algorithmic targeted advertising of Web 2.
Our data is centralized and savaged by giant corporations. Data localization rules and geopolitical walls like China's Great Firewall further fragment the internet.
The decentralized Web3 reflects Berners-original Lee's vision: "No permission is required from a central authority to post anything... there is no central controlling node and thus no single point of failure." Now he runs Solid, a Web3 data storage startup.
So Web3 starts with decentralized servers and data privacy.
Web3 begins with decentralized storage.
Data decentralization is a key feature of the Web3 tech stack. Web2 has closed databases. Large corporations like Facebook, Google, and others go to great lengths to collect, control, and monetize data. We want to change it.
Amazon, Google, Microsoft, Alibaba, and Huawei, according to Gartner, currently control 80% of the global cloud infrastructure market. Web3 wants to change that.
Decentralization enlarges power structures by giving participants a stake in the network. Users own data on open encrypted networks in Web3. This area has many projects.
Apps like Filecoin and IPFS have led the way. Data is replicated across multiple nodes in Web3 storage providers like Filecoin.
But the new tech stack and ideology raise many questions.
Giving users control over their data
According to Ryan Kris, COO of Verida, his “Web3 vision” is “empowering people to control their own data.”
Verida targets SDKs that address issues in the Web3 stack: identity, messaging, personal storage, and data interoperability.
A big app suite? “Yes, but it's a frontier technology,” he says. They are currently building a credentialing system for decentralized health in Bermuda.
By empowering individuals, how will Web3 create a fairer internet? Kris, who has worked in telecoms, finance, cyber security, and blockchain consulting for decades, admits it is difficult:
“The viability of Web3 raises some good business questions,” he adds. “How can users regain control over centralized personal data? How are startups motivated to build products and tools that support this transition? How are existing Web2 companies encouraged to pivot to a Web3 business model to compete with market leaders?
Kris adds that new technologies have regulatory and practical issues:
"On storage, IPFS is great for redundantly sharing public data, but not designed for securing private personal data. It is not controlled by the users. When data storage in a specific country is not guaranteed, regulatory issues arise."
Each project has varying degrees of decentralization. The diehards say DApps that use centralized storage are no longer “Web3” companies. But fully decentralized technology is hard to build.
Web2.5?
Some argue that we're actually building Web2.5 businesses, which are crypto-native but not fully decentralized. This is vital. For example, the NFT may be on a blockchain, but it is linked to centralized data repositories like OpenSea. A server failure could result in data loss.
However, according to Apollo Capital crypto analyst David Angliss, OpenSea is “not exactly community-led”. Also in 2021, much to the chagrin of crypto enthusiasts, OpenSea tried and failed to list on the Nasdaq.
This is where Web2.5 is defined.
“Web3 isn't a crypto segment. “Anything that uses a blockchain for censorship resistance is Web3,” Angliss tells us.
“Web3 gives users control over their data and identity. This is not possible in Web2.”
“Web2 is like feudalism, with walled-off ecosystems ruled by a few. For example, an honest user owned the Instagram account “Meta,” which Facebook rebranded and then had to make up a reason to suspend. Not anymore with Web3. If I buy ‘Ethereum.ens,' Ethereum cannot take it away from me.”
Angliss uses OpenSea as a Web2.5 business example. Too decentralized, i.e. censorship resistant, can be unprofitable for a large company like OpenSea. For example, OpenSea “enables NFT trading”. But it also stopped the sale of stolen Bored Apes.”
Web3 (or Web2.5, depending on the context) has been described as a new way to privatize internet.
“Being in the crypto ecosystem doesn't make it Web3,” Angliss says. The biggest risk is centralized closed ecosystems rather than a growing Web3.
LooksRare and OpenDAO are two community-led platforms that are more decentralized than OpenSea. LooksRare has even been “vampire attacking” OpenSea, indicating a Web3 competitor to the Web2.5 NFT king could find favor.
The addition of a token gives these new NFT platforms more options for building customer loyalty. For example, OpenSea charges a fee that goes nowhere. Stakeholders of LOOKS tokens earn 100% of the trading fees charged by LooksRare on every basic sale.
Maybe Web3's time has come.
So whose data is it?
Continuing criticisms of Web3 platforms' decentralization may indicate we're too early. Users want to own and store their in-game assets and NFTs on decentralized platforms like the Metaverse and play-to-earn games. Start-ups like Arweave, Sia, and Aleph.im propose an alternative.
To be truly decentralized, Web3 requires new off-chain models that sidestep cloud computing and Web2.5.
“Arweave and Sia emerged as formidable competitors this year,” says the Messari Report. They seek to reduce the risk of an NFT being lost due to a data breach on a centralized server.
Aleph.im, another Web3 cloud competitor, seeks to replace cloud computing with a service network. It is a decentralized computing network that supports multiple blockchains by retrieving and encrypting data.
“The Aleph.im network provides a truly decentralized alternative where it is most needed: storage and computing,” says Johnathan Schemoul, founder of Aleph.im. For reasons of consensus and security, blockchains are not designed for large storage or high-performance computing.
As a result, large data sets are frequently stored off-chain, increasing the risk for centralized databases like OpenSea
Aleph.im enables users to own digital assets using both blockchains and off-chain decentralized cloud technologies.
"We need to go beyond layer 0 and 1 to build a robust decentralized web. The Aleph.im ecosystem is proving that Web3 can be decentralized, and we intend to keep going.”
Aleph.im raised $10 million in mid-January 2022, and Ubisoft uses its network for NFT storage. This is the first time a big-budget gaming studio has given users this much control.
It also suggests Web3 could work as a B2B model, even if consumers aren't concerned about “decentralization.” Starting with gaming is common.
Can Tokenomics help Web3 adoption?
Web3 consumer adoption is another story. The average user may not be interested in all this decentralization talk. Still, how much do people value privacy over convenience? Can tokenomics solve the privacy vs. convenience dilemma?
Holon Global Investments' Jonathan Hooker tells us that human internet behavior will change. “Do you own Bitcoin?” he asks in his Web3 explanation. How does it feel to own and control your own sovereign wealth? Then:
“What if you could own and control your data like Bitcoin?”
“The business model must find what that person values,” he says. Putting their own health records on centralized systems they don't control?
“How vital are those medical records to that person at a critical time anywhere in the world? Filecoin and IPFS can help.”
Web3 adoption depends on NFT storage competition. A free off-chain storage of NFT metadata and assets was launched by Filecoin in April 2021.
Denationalization and blockchain technology have significant implications for data ownership and compensation for lending, staking, and using data.
Tokenomics can change human behavior, but many people simply sign into Web2 apps using a Facebook API without hesitation. Our data is already owned by Google, Baidu, Tencent, and Facebook (and its parent company Meta). Is it too late to recover?
Maybe. “Data is like fruit, it starts out fresh but ages,” he says. "Big Tech's data on us will expire."
Web3 founder Kris agrees with Hooker that “value for data is the issue, not privacy.” People accept losing their data privacy, so tokenize it. People readily give up data, so why not pay for it?
"Personalized data offering is valuable in personalization. “I will sell my social media data but not my health data.”
Purists and mass consumer adoption struggle with key management.
Others question data tokenomics' optimism. While acknowledging its potential, Box founder Aaron Levie questioned the viability of Web3 models in a Tweet thread:
“Why? Because data almost always works in an app. A product and APIs that moved quickly to build value and trust over time.”
Levie contends that tokenomics may complicate matters. In addition to community governance and tokenomics, Web3 ideals likely add a new negotiation vector.
“These are hard problems about human coordination, not software or blockchains,”. Using a Facebook API is simple. The business model and user interface are crucial.
For example, the crypto faithful have a common misconception about logging into Web3. It goes like this: Web 1 had usernames and passwords. Web 2 uses Google, Facebook, or Twitter APIs, while Web 3 uses your wallet. Pay with Ethereum on MetaMask, for example.
But Levie is correct. Blockchain key management is stressed in this meme. Even seasoned crypto enthusiasts have heart attacks, let alone newbies.
Web3 requires a better user experience, according to Kris, the company's founder. “How does a user recover keys?”
And at this point, no solution is likely to be completely decentralized. So Web3 key management can be improved. ”The moment someone loses control of their keys, Web3 ceases to exist.”
That leaves a major issue for Web3 purists. Put this one in the too-hard basket.
Is 2022 the Year of Web3?
Web3 must first solve a number of issues before it can be mainstreamed. It must be better and cheaper than Web2.5, or have other significant advantages.
Web3 aims for scalability without sacrificing decentralization protocols. But decentralization is difficult and centralized services are more convenient.
Ethereum co-founder Vitalik Buterin himself stated recently"
This is why (centralized) Binance to Binance transactions trump Ethereum payments in some places because they don't have to be verified 12 times."
“I do think a lot of people care about decentralization, but they're not going to take decentralization if decentralization costs $8 per transaction,” he continued.
“Blockchains need to be affordable for people to use them in mainstream applications... Not for 2014 whales, but for today's users."
For now, scalability, tokenomics, mainstream adoption, and decentralization believers seem to be holding Web3 hostage.
Much like crypto's past.
But stay tuned.
More on Web3 & Crypto
Vivek Singh
3 years ago
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.
Percy Bolmér
3 years ago
Ethereum No Longer Consumes A Medium-Sized Country's Electricity To Run
The Merge cut Ethereum's energy use by 99.5%.
The Crypto community celebrated on September 15, 2022. This day, Ethereum Merged. The entire blockchain successfully merged with the Beacon chain, and it was so smooth you barely noticed.
Many have waited, dreaded, and longed for this day.
Some investors feared the network would break down, while others envisioned a seamless merging.
Speculators predict a successful Merge will lead investors to Ethereum. This could boost Ethereum's popularity.
What Has Changed Since The Merge
The merging transitions Ethereum mainnet from PoW to PoS.
PoW sends a mathematical riddle to computers worldwide (miners). First miner to solve puzzle updates blockchain and is rewarded.
The puzzles sent are power-intensive to solve, so mining requires a lot of electricity. It's sent to every miner competing to solve it, requiring duplicate computation.
PoS allows investors to stake their coins to validate a new transaction. Instead of validating a whole block, you validate a transaction and get the fees.
You can validate instead of mine. A validator stakes 32 Ethereum. After staking, the validator can validate future blocks.
Once a validator validates a block, it's sent to a randomly selected group of other validators. This group verifies that a validator is not malicious and doesn't validate fake blocks.
This way, only one computer needs to solve or validate the transaction, instead of all miners. The validated block must be approved by a small group of validators, causing duplicate computation.
PoS is more secure because validating fake blocks results in slashing. You lose your bet tokens. If a validator signs a bad block or double-signs conflicting blocks, their ETH is burned.
Theoretically, Ethereum has one block every 12 seconds, so a validator forging a block risks burning 1 Ethereum for 12 seconds of transactions. This makes mistakes expensive and risky.
What Impact Does This Have On Energy Use?
Cryptocurrency is a natural calamity, sucking electricity and eating away at the earth one transaction at a time.
Many don't know the environmental impact of cryptocurrencies, yet it's tremendous.
A single Ethereum transaction used to use 200 kWh and leave a large carbon imprint. This update reduces global energy use by 0.2%.
Ethereum will submit a challenge to one validator, and that validator will forward it to randomly selected other validators who accept it.
This reduces the needed computing power.
They expect a 99.5% reduction, therefore a single transaction should cost 1 kWh.
Carbon footprint is 0.58 kgCO2, or 1,235 VISA transactions.
This is a big Ethereum blockchain update.
I love cryptocurrency and Mother Earth.
Modern Eremite
3 years ago
The complete, easy-to-understand guide to bitcoin
Introduction
Markets rely on knowledge.
The internet provided practically endless knowledge and wisdom. Humanity has never seen such leverage. Technology's progress drives us to adapt to a changing world, changing our routines and behaviors.
In a digital age, people may struggle to live in the analogue world of their upbringing. Can those who can't adapt change their lives? I won't answer. We should teach those who are willing to learn, nevertheless. Unravel the modern world's riddles and give them wisdom.
Adapt or die . Accept the future or remain behind.
This essay will help you comprehend Bitcoin better than most market participants and the general public. Let's dig into Bitcoin.
Join me.
Ascension
Bitcoin.org was registered in August 2008. Bitcoin whitepaper was published on 31 October 2008. The document intrigued and motivated people around the world, including technical engineers and sovereignty seekers. Since then, Bitcoin's whitepaper has been read and researched to comprehend its essential concept.
I recommend reading the whitepaper yourself. You'll be able to say you read the Bitcoin whitepaper instead of simply Googling "what is Bitcoin" and reading the fundamental definition without knowing the revolution's scope. The article links to Bitcoin's whitepaper. To avoid being overwhelmed by the whitepaper, read the following article first.
Bitcoin isn't the first peer-to-peer digital currency. Hashcash or Bit Gold were once popular cryptocurrencies. These two Bitcoin precursors failed to gain traction and produce the network effect needed for general adoption. After many struggles, Bitcoin emerged as the most successful cryptocurrency, leading the way for others.
Satoshi Nakamoto, an active bitcointalk.org user, created Bitcoin. Satoshi's identity remains unknown. Satoshi's last bitcointalk.org login was 12 December 2010. Since then, he's officially disappeared. Thus, conspiracies and riddles surround Bitcoin's creators. I've heard many various theories, some insane and others well-thought-out.
It's not about who created it; it's about knowing its potential. Since its start, Satoshi's legacy has changed the world and will continue to.
Block-by-block blockchain
Bitcoin is a distributed ledger. What's the meaning?
Everyone can view all blockchain transactions, but no one can undo or delete them.
Imagine you and your friends routinely eat out, but only one pays. You're careful with money and what others owe you. How can everyone access the info without it being changed?
You'll keep a notebook of your evening's transactions. Everyone will take a page home. If one of you changed the page's data, the group would notice and reject it. The majority will establish consensus and offer official facts.
Miners add a new Bitcoin block to the main blockchain every 10 minutes. The appended block contains miner-verified transactions. Now that the next block has been added, the network will receive the next set of user transactions.
Bitcoin Proof of Work—prove you earned it
Any firm needs hardworking personnel to expand and serve clients. Bitcoin isn't that different.
Bitcoin's Proof of Work consensus system needs individuals to validate and create new blocks and check for malicious actors. I'll discuss Bitcoin's blockchain consensus method.
Proof of Work helps Bitcoin reach network consensus. The network is checked and safeguarded by CPU, GPU, or ASIC Bitcoin-mining machines (Application-Specific Integrated Circuit).
Every 10 minutes, miners are rewarded in Bitcoin for securing and verifying the network. It's unlikely you'll finish the block. Miners build pools to increase their chances of winning by combining their processing power.
In the early days of Bitcoin, individual mining systems were more popular due to high maintenance costs and larger earnings prospects. Over time, people created larger and larger Bitcoin mining facilities that required a lot of space and sophisticated cooling systems to keep machines from overheating.
Proof of Work is a vital part of the Bitcoin network, as network security requires the processing power of devices purchased with fiat currency. Miners must invest in mining facilities, which creates a new business branch, mining facilities ownership. Bitcoin mining is a topic for a future article.
More mining, less reward
Bitcoin is usually scarce.
Why is it rare? It all comes down to 21,000,000 Bitcoins.
Were all Bitcoins mined? Nope. Bitcoin's supply grows until it hits 21 million coins. Initially, 50BTC each block was mined, and each block took 10 minutes. Around 2140, the last Bitcoin will be mined.
But 50BTC every 10 minutes does not give me the year 2140. Indeed careful reader. So important is Bitcoin's halving process.
What is halving?
The block reward is halved every 210,000 blocks, which takes around 4 years. The initial payout was 50BTC per block and has been decreased to 25BTC after 210,000 blocks. First halving occurred on November 28, 2012, when 10,500,000 BTC (50%) had been mined. As of April 2022, the block reward is 6.25BTC and will be lowered to 3.125BTC by 19 March 2024.
The halving method is tied to Bitcoin's hashrate. Here's what "hashrate" means.
What if we increased the number of miners and hashrate they provide to produce a block every 10 minutes? Wouldn't we manufacture blocks faster?
Every 10 minutes, blocks are generated with little asymmetry. Due to the built-in adaptive difficulty algorithm, the overall hashrate does not affect block production time. With increased hashrate, it's harder to construct a block. We can estimate when the next halving will occur because 10 minutes per block is fixed.
Building with nodes and blocks
For someone new to crypto, the unusual terms and words may be overwhelming. You'll also find everyday words that are easy to guess or have a vague idea of what they mean, how they work, and what they do. Consider blockchain technology.
Nodes and blocks: Think about that for a moment. What is your first idea?
The blockchain is a chain of validated blocks added to the main chain. What's a "block"? What's inside?
The block is another page in the blockchain book that has been filled with transaction information and accepted by the majority.
We won't go into detail about what each block includes and how it's built, as long as you understand its purpose.
What about nodes?
Nodes, along with miners, verify the blockchain's state independently. But why?
To create a full blockchain node, you must download the whole Bitcoin blockchain and check every transaction against Bitcoin's consensus criteria.
What's Bitcoin's size?
In April 2022, the Bitcoin blockchain was 389.72GB.
Bitcoin's blockchain has miners and node runners.
Let's revisit the US gold rush. Miners mine gold with their own power (physical and monetary resources) and are rewarded with gold (Bitcoin). All become richer with more gold, and so does the country.
Nodes are like sheriffs, ensuring everything is done according to consensus rules and that there are no rogue miners or network users.
Lost and held bitcoin
Does the Bitcoin exchange price match each coin's price? How many coins remain after 21,000,000? 21 million or less?
Common reason suggests a 21 million-coin supply.
What if I lost 1BTC from a cold wallet?
What if I saved 1000BTC on paper in 2010 and it was damaged?
What if I mined Bitcoin in 2010 and lost the keys?
Satoshi Nakamoto's coins? Since then, those coins haven't moved.
How many BTC are truly in circulation?
Many people are trying to answer this question, and you may discover a variety of studies and individual research on the topic. Be cautious of the findings because they can't be evaluated and the statistics are hazy guesses.
On the other hand, we have long-term investors who won't sell their Bitcoin or will sell little amounts to cover mining or living needs.
The price of Bitcoin is determined by supply and demand on exchanges using liquid BTC. How many BTC are left after subtracting lost and non-custodial BTC?
We have significantly less Bitcoin in circulation than you think, thus the price may not reflect demand if we knew the exact quantity of coins available.
True HODLers and diamond-hand investors won't sell you their coins, no matter the market.
What's UTXO?
Unspent (U) Transaction (TX) Output (O)
Imagine taking a $100 bill to a store. After choosing a drink and munchies, you walk to the checkout to pay. The cashier takes your $100 bill and gives you $25.50 in change. It's in your wallet.
Is it simply 100$? No way.
The $25.50 in your wallet is unrelated to the $100 bill you used. Your wallet's $25.50 is just bills and coins. Your wallet may contain these coins and bills:
2x 10$ 1x 10$
1x 5$ or 3x 5$
1x 0.50$ 2x 0.25$
Any combination of coins and bills can equal $25.50. You don't care, and I'd wager you've never ever considered it.
That is UTXO. Now, I'll detail the Bitcoin blockchain and how UTXO works, as it's crucial to know what coins you have in your (hopefully) cold wallet.
You purchased 1BTC. Is it all? No. UTXOs equal 1BTC. Then send BTC to a cold wallet. Say you pay 0.001BTC and send 0.999BTC to your cold wallet. Is it the 1BTC you got before? Well, yes and no. The UTXOs are the same or comparable as before, but the blockchain address has changed. It's like if you handed someone a wallet, they removed the coins needed for a network charge, then returned the rest of the coins and notes.
UTXO is a simple concept, but it's crucial to grasp how it works to comprehend dangers like dust attacks and how coins may be tracked.
Lightning Network: fast cash
You've probably heard of "Layer 2 blockchain" projects.
What does it mean?
Layer 2 on a blockchain is an additional layer that increases the speed and quantity of transactions per minute and reduces transaction fees.
Imagine going to an obsolete bank to transfer money to another account and having to pay a charge and wait. You can transfer funds via your bank account or a mobile app without paying a fee, or the fee is low, and the cash appear nearly quickly. Layer 1 and 2 payment systems are different.
Layer 1 is not obsolete; it merely has more essential things to focus on, including providing the blockchain with new, validated blocks, whereas Layer 2 solutions strive to offer Layer 1 with previously processed and verified transactions. The primary blockchain, Bitcoin, will only receive the wallets' final state. All channel transactions until shutting and balancing are irrelevant to the main chain.
Layer 2 and the Lightning Network's goal are now clear. Most Layer 2 solutions on multiple blockchains are created as blockchains, however Lightning Network is not. Remember the following remark, as it best describes Lightning.
Lightning Network connects public and private Bitcoin wallets.
Opening a private channel with another wallet notifies just two parties. The creation and opening of a public channel tells the network that anyone can use it.
Why create a public Lightning Network channel?
Every transaction through your channel generates fees.
Money, if you don't know.
See who benefits when in doubt.
Anonymity, huh?
Bitcoin anonymity? Bitcoin's anonymity was utilized to launder money.
Well… You've heard similar stories. When you ask why or how it permits people to remain anonymous, the conversation ends as if it were just a story someone heard.
Bitcoin isn't private. Pseudonymous.
What if someone tracks your transactions and discovers your wallet address? Where is your anonymity then?
Bitcoin is like bulletproof glass storage; you can't take or change the money. If you dig and analyze the data, you can see what's inside.
Every online action leaves a trace, and traces may be tracked. People often forget this guideline.
A tool like that can help you observe what the major players, or whales, are doing with their coins when the market is uncertain. Many people spend time analyzing on-chain data. Worth it?
Ask yourself a question. What are the big players' options? Do you think they're letting you see their wallets for a small on-chain data fee?
Instead of short-term behaviors, focus on long-term trends.
More wallet transactions leave traces. Having nothing to conceal isn't a defect. Can it lead to regulating Bitcoin so every transaction is tracked like in banks today?
But wait. How can criminals pay out Bitcoin? They're doing it, aren't they?
Mixers can anonymize your coins, letting you to utilize them freely. This is not a guide on how to make your coins anonymous; it could do more harm than good if you don't know what you're doing.
Remember, being anonymous attracts greater attention.
Bitcoin isn't the only cryptocurrency we can use to buy things. Using cryptocurrency appropriately can provide usability and anonymity. Monero (XMR), Zcash (ZEC), and Litecoin (LTC) following the Mimblewimble upgrade are examples.
Summary
Congratulations! You've reached the conclusion of the article and learned about Bitcoin and cryptocurrency. You've entered the future.
You know what Bitcoin is, how its blockchain works, and why it's not anonymous. I bet you can explain Lightning Network and UTXO to your buddies.
Markets rely on knowledge. Prepare yourself for success before taking the first step. Let your expertise be your edge.
This article is a summary of this one.
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Edward Williams
3 years ago
I currently manage 4 profitable online companies. I find all the generic advice and garbage courses very frustrating. The only advice you need is this.
This is for young entrepreneurs, especially in tech.
People give useless success advice on TikTok and Reddit. Early risers, bookworms, etc. Entrepreneurship courses. Work hard and hustle.
False. These aren't successful traits.
I mean, organization is good. As someone who founded several businesses and now works at a VC firm, I find these tips to be clichés.
Based on founding four successful businesses and working with other successful firms, here's my best actionable advice:
1. Choose a sector or a niche and become an expert in it.
This is more generic than my next tip, but it's a must-do that's often overlooked. Become an expert in the industry or niche you want to enter. Discover everything.
Buy (future) competitors' products. Understand consumers' pain points. Market-test. Target keyword combos. Learn technical details.
The most successful businesses I've worked with were all formed by 9-5 employees. They knew the industry's pain points. They started a business targeting these pain points.
2. Choose a niche or industry crossroads to target.
How do you choose an industry or niche? What if your industry is too competitive?
List your skills and hobbies. Randomness is fine. Find an intersection between two interests or skills.
Say you build websites well. You like cars.
Web design is a *very* competitive industry. Cars and web design?
Instead of web design, target car dealers and mechanics. Build a few fake demo auto mechanic websites, then cold call shops with poor websites. Verticalize.
I've noticed a pattern:
Person works in a particular industry for a corporation.
Person gains expertise in the relevant industry.
Person quits their job and launches a small business to address a problem that their former employer was unwilling to address.
I originally posted this on Reddit and it seemed to have taken off so I decided to share it with you all.
Focus on the product. When someone buys from you, you convince them the product's value exceeds the price. It's not fair and favors the buyer.
Creating a superior product or service will win. Narrowing this helps you outcompete others.
You may be their only (lucky) option.
Desiree Peralta
3 years ago
Why Now Is Your Chance To Create A Millionaire Career
People don’t believe in influencers anymore; they need people like you.
Social media influencers have dominated for years. We've seen videos, images, and articles of *famous* individuals unwrapping, reviewing, and endorsing things.
This industry generates billions. This year, marketers spent $2.23 billion on Instagram, $1 million on Youtube, and $775 million on Tiktok. This marketing has helped start certain companies.
Influencers are dying, so ordinary people like us may take over this billion-dollar sector. Why?
Why influencers are perishing
Most influencers lie to their fans, especially on Instagram. Influencers' first purpose was to make their lives so flawless that others would want to buy their stuff.
In 2015, an Australian influencer with 600,000 followers went viral for revealing all her photos and everything she did to seem great before deleting her account.
“I dramatically edited the pictures, I manipulated the environements, and made my life look perfect in social media… I remember I obsessively checked the like count for a full week since uploading it, a selfie that now has close to 2,500 likes. It got 5 likes. This was when I was so hungry for social media validation … This was the reason why I quit social media: for me, personally, it consumed me. I wasn’t living in a 3D world.”
Influencers then lost credibility.
Influencers seem to live in a bubble, separate from us. Thanks to self-popularity love's and constant awareness campaigns, people find these people ridiculous.
Influencers are praised more for showing themselves as natural and common than for showing luxuries and lies.
Little by little, they are dying, making room for a new group to take advantage of this multi-million dollar business, which gives us (ordinary people) a big opportunity to grow on any content creation platform we want.
Why this is your chance to develop on any platform for creating content
In 2021, I wrote “Not everyone who talks about money is a Financial Advisor, be careful of who you take advice from,”. In it, I warned that not everyone with a large following is a reputable source of financial advice.
Other writers hated this post and said I was wrong.
People don't want Jeff Bezos or Elon Musk's counsel, they said. They prefer to hear about their neighbor's restroom problems or his closest friend's terrible business.
Real advice from regular folks.
And I found this was true when I returned to my independent YouTube channel and had more than 1000 followers after having abandoned it with fewer than 30 videos in 2021 since there were already many personal finance and travel channels and I thought mine wasn't special.
People appreciated my videos because I was a 20-something girl trying to make money online, and they believed my advice more than that of influencers with thousands of followers.
I think today is the greatest time to grow on any platform as an ordinary person. Normal individuals give honest recommendations about what works for them and look easier to make because they have the same options as us.
Nobody cares how a millionaire acquired a Lamborghini unless it's entertaining. Education works now. Real counsel from average people is replicable.
Many individuals don't appreciate how false influencers seem (unreal bodies and excessive surgery and retouching) since it makes them feel uneasy.
That's why body-positive advertisements have been so effective, but they've lost ground in places like Tiktok, where the audience wants more content from everyday people than influencers living amazing lives. More people will relate to your content if you appear genuine.
Last thoughts
Influencers are dwindling. People want more real people to give real advice and demonstrate an ordinary life.
People will enjoy anything you tell about your daily life as long as you provide value, and you can build a following rapidly if you're honest.
This is a millionaire industry that is getting more expensive and will go with what works, so stand out immediately.
The woman
3 years ago
The renowned and highest-paid Google software engineer
His story will inspire you.
“Google search went down for a few hours in 2002; Jeff Dean handled all the queries by hand and checked quality doubled.”- Jeff Dean Facts.
One of many Jeff Dean jokes, but you get the idea.
Google's top six engineers met in a war room in mid-2000. Google's crawling system, which indexed the Web, stopped working. Users could still enter queries, but results were five months old.
Google just signed a deal with Yahoo to power a ten-times-larger search engine. Tension rose. It was crucial. If they failed, the Yahoo agreement would likely fall through, risking bankruptcy for the firm. Their efforts could be lost.
A rangy, tall, energetic thirty-one-year-old man named Jeff dean was among those six brilliant engineers in the makeshift room. He had just left D. E. C. a couple of months ago and started his career in a relatively new firm Google, which was about to change the world. He rolled his chair over his colleague Sanjay and sat right next to him, cajoling his code like a movie director. The history started from there.
When you think of people who shaped the World Wide Web, you probably picture founders and CEOs like Larry Page and Sergey Brin, Marc Andreesen, Tim Berners-Lee, Bill Gates, and Mark Zuckerberg. They’re undoubtedly the brightest people on earth.
Under these giants, legions of anonymous coders work at keyboards to create the systems and products we use. These computer workers are irreplaceable.
Let's get to know him better.
It's possible you've never heard of Jeff Dean. He's American. Dean created many behind-the-scenes Google products. Jeff, co-founder and head of Google's deep learning research engineering team, is a popular technology, innovation, and AI keynote speaker.
While earning an MS and Ph.D. in computer science at the University of Washington, he was a teaching assistant, instructor, and research assistant. Dean joined the Compaq Computer Corporation Western Research Laboratory research team after graduating.
Jeff co-created ProfileMe and the Continuous Profiling Infrastructure for Digital at Compaq. He co-designed and implemented Swift, one of the fastest Java implementations. He was a senior technical staff member at mySimon Inc., retrieving and caching electronic commerce content.
Dean, a top young computer scientist, joined Google in mid-1999. He was always trying to maximize a computer's potential as a child.
An expert
His high school program for processing massive epidemiological data was 26 times faster than professionals'. Epi Info, in 13 languages, is used by the CDC. He worked on compilers as a computer science Ph.D. These apps make source code computer-readable.
Dean never wanted to work on compilers forever. He left Academia for Google, which had less than 20 employees. Dean helped found Google News and AdSense, which transformed the internet economy. He then addressed Google's biggest issue, scaling.
Growing Google faced a huge computing challenge. They developed PageRank in the late 1990s to return the most relevant search results. Google's popularity slowed machine deployment.
Dean solved problems, his specialty. He and fellow great programmer Sanjay Ghemawat created the Google File System, which distributed large data over thousands of cheap machines.
These two also created MapReduce, which let programmers handle massive data quantities on parallel machines. They could also add calculations to the search algorithm. A 2004 research article explained MapReduce, which became an industry sensation.
Several revolutionary inventions
Dean's other initiatives were also game-changers. BigTable, a petabyte-capable distributed data storage system, was based on Google File. The first global database, Spanner, stores data on millions of servers in dozens of data centers worldwide.
It underpins Gmail and AdWords. Google Translate co-founder Jeff Dean is surprising. He contributes heavily to Google News. Dean is Senior Fellow of Google Research and Health and leads Google AI.
Recognitions
The National Academy of Engineering elected Dean in 2009. He received the 2009 Association for Computing Machinery fellowship and the 2016 American Academy of Arts and Science fellowship. He received the 2007 ACM-SIGOPS Mark Weiser Award and the 2012 ACM-Infosys Foundation Award. Lists could continue.
A sneaky question may arrive in your mind: How much does this big brain earn? Well, most believe he is one of the highest-paid employees at Google. According to a survey, he is paid $3 million a year.
He makes espresso and chats with a small group of Googlers most mornings. Dean steams milk, another grinds, and another brews espresso. They discuss families and technology while making coffee. He thinks this little collaboration and idea-sharing keeps Google going.
“Some of us have been working together for more than 15 years,” Dean said. “We estimate that we’ve collectively made more than 20,000 cappuccinos together.”
We all know great developers and software engineers. It may inspire many.