Counting the things that cannot be done without Web3

Author: Raindy Lu, Ontology

The term Web3, both familiar and unfamiliar, has recently appeared repeatedly in major media reports and corporate promotions. However, how many people have truly entered the world of Web3, and what are the things that are only achievable through Web3?

I believe that for the vast majority of people, the first step into Web3 was creating their first Bitcoin trading account with a CEX, or creating their first Ethereum address with a Metamask wallet, thus starting their journey with BTC and ETH. After that, you gradually come into contact with more cryptocurrencies, begin to pay attention to their price trends, and feel the urge to hold them. There is hope to achieve the dream of financial freedom through this emerging market. Some speculators who have tasted success start to promote their belief in Web3, hoping to influence more people around them to join this "game." However, this is by no means Web3.

If we were to explain Web3 in the simplest terms, I would say it is a decentralized collaboration model. This model completely overturns the traditional rules and gameplay of time, freeing everyone from the shackles of centralized institutions, allowing them to truly control their own data and identity, thereby promoting the development of a value-driven economy. Although many people still hold reservations about the necessity of blockchain and Web3, it is undeniable that there are indeed many scenarios that cannot be separated from the essential components of Web3.

Decentralized Storage Ensures Information Security

Since the emergence of ARPANET in 1969, the internet has achieved global connectivity. At the same time, it has generated trillions of data. Personal PC devices have gradually become unable to support the storage of this data, and powerful hardware devices are often difficult to carry. Cloud storage has emerged, providing a shared data storage platform for various users, managing and using their data through user uploads and downloads. Google Drive has reached 120 million users. Moreover, with the diversification of user needs, these cloud storage services have further expanded their business scope, such as Google Cloud and AWS, which help enterprises achieve business transformation, improve agility, reduce costs, and accelerate innovation by providing customized SaaS services. While enjoying the convenience these services bring to individuals and businesses, various information leakage incidents have also emerged, and personal data trading has even become an industry.

The rise of major public chains in 2018 was largely due to the awakening to this issue. Unlike cloud storage, public chains refer to consensus blockchains where anyone can read, send transactions, and obtain valid confirmations. Public chains are usually considered "completely decentralized," with all data being open and transparent, and no individual or institution can control or tamper with the data's read and write. They protect users from developer influence, have low access thresholds, and all data is publicly available by default.

These are things that traditional internet services cannot achieve. With nearly five years of development, from the calls to be Ethereum killers to now embracing EVM, major public chains have gradually realized that having one dominant player is unrealistic; a hundred flowers blooming is the choice that benefits the entire industry. On the basis of ensuring node operation security and optimizing TPS, maximizing interoperability with other chains has become a consensus. On this basis, each chain must also maintain a certain focus, whether it is DeFi on BSC, NFTs on Flow, or DID on Ontology, each has gradually formed its own differentiated advantages and unique brand labels.

Decentralized Identity Protects Personal Privacy

In the traditional world, passports, ID cards, and other documents are credentials that prove our real identity, issued by authoritative institutions of the state. Institutions and enterprises in different countries and regions determine the credibility and usability of different credentials based on specific agreements with the state. When we need to handle certain specific businesses, we must provide all our information to the institution as required. For instance, when buying a plane ticket, we need to provide the airline with our name, gender, date of birth, ID number, and other information. Only after the airline verifies that the passenger meets all the conditions for boarding will the ticketing process begin. This information is often stored by the airline and used in other business scenarios, which is why you may receive various pick-up and drop-off services and travel promotion ads on your phone even before you have landed.

In fact, this is not a necessary operation; they only need to know important information such as whether the passenger is over 70 years old or has any diseases that make them unsuitable for flying. So how can we ensure the orderly conduct of people's daily lives while protecting personal privacy? Decentralized identity provides a good solution.

Generally, users can choose a public chain as the carrier to create their DID (for example, creating an ONT ID on the Ontology chain). All the information they upload will be recorded on this chain in a decentralized manner, ensuring the security and non-disclosure of their information. For chains that do not yet support DID, the wallet address on that chain can also serve as an identity identifier in a specific dimension. Subsequently, users can use zero-knowledge proof technology to authorize the generation of different verifiable credentials (VC) based on their on-chain and off-chain information. These VCs can be customized for different business scenarios. As a result, users disclose not their bare personal information, but rather coarse-grained VC results. For example, the information Alice originally provided to the airline stating her birth date as January 1, 1990, can be transformed into the statement that Alice is over 18 years old.

Transitioning to the Crypto Native world, DID is also an excellent tool for users to manage various on-chain addresses, assets, applications, etc. With the support of decentralized domain name services, everyone can create their own domain name on platforms like ENS in a personalized manner and bind their wallet addresses. Some new Web3 projects have also begun to extend their services to Mirror blogs, various on-chain DeFi dApps, Twitter, LinkedIn, and other traditional Web2 social applications, providing users with an integrated management tool that bridges Web2 and Web3. Some of these even offer various data analysis functions to optimize user experience.

In addition, all of a user's on-chain behavior records can form their on-chain reputation, which can be connected to the off-chain world through KYC, applying to more scenarios.

Web3 Creates New Personal Income Models

Since Web3 is a new collaboration model, the contributions of individuals to collaboration also require a new feedback model to incentivize continued investment. For individual blockchain platforms, participation can take the form of operating a node in a POS network and earning a share of the platform's transaction fees. These shares are often based on parameters such as the amount of platform tokens on the individual's operating node and the duration of operation. Another hot scenario is decentralized finance; the DeFi Summer of 2020 sparked a wave of mining for all, allowing users to stake their tokens in different DeFi protocols or obtain incentive tokens provided by project parties through token swaps, thus achieving the appreciation of their digital assets.

As the bubble of DeFi's brief prosperity faded, NFTs emerged as the new darling. This introduced an important concept—the creator economy. Whether it is writers, graphic designers, or any type of creator, they can mint their works as NFTs, set their own prices, or release them for public auction on NFT markets. Buyers purchase based on their aesthetics and preferences and choose whether to engage in secondary circulation. This method provides creators with new income channels and accelerates transactions in a peer-to-peer manner. On this basis, creators can gradually build their own fan communities, and these loyal fans are likely to become their repeat customers, continuously purchasing their artworks.

Recently popular X-To-Earn models have organically combined blockchain with online games or applications, ensuring playability while layering various token earning models. This extends to applications such as item purchases and trading, constructing independent ecosystems for each application. By collaborating with major IPs, they broaden their user base to non-Web3 groups. Although I may not know what blockchain is, I want to give it a try.

Another personal income model scenario is within decentralized autonomous organizations (DAOs). Unlike traditional organizational collaboration models, the greatest advantage of DAOs lies in their permissionless nature. In the traditional world, to join a company, individuals must prove their education and relevant experience and go through multiple rounds of interviews. Joining a DAO has no such restrictions; as long as you can find a suitable role within the DAO and complete specific tasks, you can earn corresponding rewards based on each DAO's rules, and this collaboration is global, unrestricted by physical space. Moreover, this collaboration model is "bottom-up," which avoids dictatorial issues. Every DAO member can propose their suggestions regarding the DAO's governance rules and incentive distribution methods, making decisions through community voting. This to some extent achieves healthy iteration of the DAO and incentivizes members to contribute ideas and strategies to the organization.

All of these aspects are just a part of the transformations brought about by Web3. As modern individuals become increasingly aware of the security of their identity data and their need for control over their time and space intensifies, Web3 will be effectively applied to more scenarios. On the other hand, countries are also strengthening their regulations on data security and privacy, with the introduction of laws such as the General Data Protection Regulation (GDPR), the Personal Information Protection Act (PIPA), and China's Data Security Law. Internet giants will face more challenges, and only by embracing Web3 can they find a balance of interests with users and achieve sustainable development.

Web3 is here, Let's BUIDL together!