What everyone gets wrong about web3 and NFTs

ChBr...Y3Vi
17 Oct 2022
65


Ever heard that crypto and NFTs are the new internet?

Ever wondered what that actually means and what all that hype is about?

Well I did.

So I looked into it. Heavily. And it was indeed fascinating.

Anything that a company could built in web2, could also be built in web3 but without the company. A community owned internet where users own their favorite platforms.

But is this really enough to call it the next generation of the internet?

Going from web1, where the internet was just static read-only HTML pages, to web2, where content became dynamic, was a gamechanger.

Suddenly you were no longer just a passive consumer of information, you could now create and share things and actively influence the platform you’re using. The content of a website was no longer predetermined by developers during the programming stage, it was dynamically shifting and changing based on the actions of its users.

This was a revolution that led to things we’ve never seen before. It allowed people to create blogs, social media, online forums, messaging apps and peer to peer marketplaces. It led to the birth of giants like Facebook, YouTube, Twitter and Reddit. It shaped most of the internet as we know it today. It was massive.

The same goes for the smartphone boom that brought the invention of apps and the app store. These technologies changed the world in ways that we couldn’t even imagine.

And that’s what characterizes any revolutionary technology. It opens the gates for innovation and allows us to create things we’ve never seen before. It unlocks our creativity, it helps us think in new ways and develop original ideas. And then it gives us the tools to make these ideas come to life.

So when I was looking at web3, I found it hard to find something similar. There wasn’t something that would cause my imagination to run wild. Decentralization, true ownership and trustless systems are incredible indeed. But I needed something more than that.

I needed something to flood my mind with an abundance of new and original ideas from the moment I discover it. Then, and only then, I could declare blockchain technology as revolutionary. Then and only then I could call it web3 and give it the title of the new internet.

No matter how hard I looked I couldn’t find such a thing. Maybe it didn’t exist. Maybe blockchain technology doesn’t have a vision that stimulates the imagination as much as web2 or the smartphone did.





As it turns out that wasn’t the case at all. I just didn’t know where to look.

Because believe it or not, the one thing that will make blockchain technology truly revolutionary is probably the most widely ridiculed technology of the modern era. It’s the most misunderstood concept in the entire tech space.


They’re called NFTs and they’re going to unlock the new internet.

Behind overpriced monkey pictures and shitty cartoon animal drawings lies a technology that will carry the future of the digital world, a future that is so exciting and so incredible that most people cannot even imagine it yet.
NFTs will be the backbone of what I like to call the Tokengated Web. The Tokengated Web is the part of web3 that really makes it web3. It’s the part that really gives it the right to be called the next generation of the internet because it allows it to satisfy the innovation standards that go along with that title. The Tokengated Web is the grand vision of blockchain technology.


But as of right now, it’s a vision that very few people are able to see.

Because the truth is, most people don’t know what NFTs are, or why they’re important. And I’m not talking about mainstream media or boomers, I’m talking about people in the space. You’d be surprised by how many people work with these things everyday, yet fail to see their true potential.

What is an NFT, actually




But first let’s start from the basics.


What is an NFT?

This is a question that is not as easy to answer as it seems. Any technology as multifaceted as this needs plenty of explanation to be understood. Do you think you can describe the internet to someone in just one sentence? Probably not. Nevertheless, definitions are an important building block for further explanation so let me give you my definition of NFTs.



NFTs are platformless digital assets that are provably unique, have an undeniable owner, and can be an input anywhere on the internet to create unique experiences. They are also often (but not always) multi-utility and/or transferable assets.


There’s a lot to unpack here so let’s take things one by one:

Platformless


The digital item is not bounded by the platform in which it was created

Digital assets


They are not tangible things, they exist in the digital world (although they can represent tangible things)

Provably unique


NFTs cannot be replicated. Each NFT has a unique “signature” that cannot be forged

Has an undeniable owner


The blockchain is like a public ledger who keeps track of who owns what. Nobody can modify this ledger maliciously.

If you own an NFT, then that NFT exists as an asset into your account and your account only, nobody else has it. In order to transfer ownership of something (i.e. sell your NFT to somebody else), you submit a transaction to the network. Then a number of independent entities (the validators), look into the transaction, verify that everything is legit (you are indeed the owner of the NFT, you’re indeed the person who submitted the request to transfer it to another account, the other account has indeed agreed to the trade etc) and then update the accounts of the involved parties accordingly.

If the public ledger says that something belongs to your account then you own it, end of story.

Can be an input anywhere on the internet to create unique experiences


The assets that you own are not stored in a private database. They’re stored in a public ledger. Any app on the internet can see the assets that you own if you allow them to by simply connecting your wallet. This allows for if-then scenarios based on the contents of your wallet. The app or website can change its behaviour dynamically depending on what the user owns (i.e. unlock specific access, features, benefits, have a different UI etc)

Multi-utility


The same NFT can be used for different things across different platforms

Transferable


You can send your NFT to anyone or trade it in a worldwide free market

The magic sword that is not a sword


When people think of NFTs, they think of pictures. Cartoon characters, digital paintings, photos. Some that are more experienced may point out to digital collectibles, songs, videos or even books. “NFTs can be any of these things!” they’ll say. But the fascinating thing isn’t that an NFT can be any of these things. It’s that it can be ALL of these things at ONCE. NFTs are like keys that you can carry with you everywhere you go in the digital world. These keys unlock all types of goods and services throughout the internet.

But let’s stop here because we’re still too abstract. Let me use an example so you can better understand what I’m saying.

Imagine you play a video game online. You defeat a hard boss and you earn a rare sword as a reward. This rare sword looks and behaves just like any other in-game item that you’ve seen until now but it has a key difference. It is an NFT. Why does this matter?

It matters because the rare sword is no longer an item that your computer is told to display by the game’s servers. It’s a real item that exists in your wallet. It’s out of the game. You can log off the game, delete it, blow up your computer and blow up the game’s headquarters and data centers and the sword will still be there. It’s not dependent on the game anymore to have value. The rare in-game sword is now platform-less. It’s not in-game anymore. And it’s not a sword anymore.

Okay but what does this really mean?

It means that when you connect your wallet to another app, that app can decide to give your rare sword NFT functionality.

Maybe that is another game allowing you to import and use your rare sword. Maybe your sword is not even a sword in that game. Maybe it’s a gun, or a skin, or a premium animation. Maybe it’s a key to a secret location. Maybe it’s all of these things at once or maybe it’s none of these things and it’s something completely unrelated to video games or swords. Maybe it’s a ticket to a real life Castle tour in Scotland. Maybe it’s access to an exclusive website.

With NFTs, anyone can use that digital item as a building block.

I can build an eshop that turns your in game items into real world items, just connect with your wallet and your rare sword could be turned into a physical collectible and sent to you.

I can fill my website with easter eggs for rare sword holders even though my website has nothing to do with the game.

I can do something completely random like run a rare sword holders discount in my real life coffee shop.

And it’s not limited to the rare sword. The same things could be done with any in-game item, in any game, across the whole internet (as long as they’re NFTs). And It’s not limited to in-game items either. In fact, what was said about the rare sword NFT applies to any NFT that was ever created.

I purposefully chose the video game example because it is the least important one and it’s still insanely interesting.

You really start to understand the possibilities of this when you start to think about all the different types of NFTs that exist.

It can be a piece of digital art you bought, a Travel NFT you earned when you checked in a foreign country, your Starbucks reward points, a trophy from a fantasy league, a Knowledge NFT you got after completing a course or attending an event, a fan token of your favorite artist.

The Tokengated Web

Apps will now have the most effective and versatile way to incentivize desired behaviours. Gamification will be the new standard everywhere but stupid points and leveling systems will be replaced by NFT rewards that have cross-platform functionality and unlimited flexibility.

Social Media will start to give NFT rewards for posting regularly on their platform. What you can do with these NFTs will determine if it’s worth getting them or not. Perhaps they will unlock something on another platform or give access to an exclusive event. Maybe they’ll give you discounts from a partner or a premium plan membership for free. Maybe all of these things at once.

And of course, that’s not only social media. Same thing applies to every business, including physical ones.

Nightclubs or hotels can use NFTs to reward their best customers and then add functionality to these NFTs by making them unlock things in the physical and the digital world (Skip the line, access to facilities, VIP entrance, discounts).

Educational platforms will use NFTs to reward the best students and give these NFTs utilities like access to more courses or in-person events (and then companies can use the information of these NFTs to help them in the hiring process).

Sports teams will make exclusive events and products that could be accessible only by their most loyal fans, who have the team’s NFT.

Literally every business will try to package as many benefits or “utilities” as possible into an NFT to give it value and then use it as an award to incentivize a certain kind of behaviour. The room for innovation is massive and the internet will be filled with new ways to create value and get rewarded for it.

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7 Comments

B
E2123
Cross-platform functionality will be an absolute game changer. So far I think the crypto space has suffered from everything being compartmentalised to its respective platforms where tokens can't be used across the space. It's quite frustrating for the user because they have to continually convert crypto asserts to the native token of the platform they want to use.
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