Web, Blockchain and Crypto; History and Fundamentals Part 2

Continuing with the different layers and architectures of blockchain described in the previous article, we are facing a huge opportunity and many dilemmas still to be solved: adoption, compression and acceptance among them.

Seeing the historical path of the web, we can better understand that in each phase new complexities and players are added, so right now launching a project on web 3 has nothing to do with launching it on web 2 and much less with launching it on web 1. Now it is not important the VC’s money or having strong connections with the best places in the world to undertake Silicon Valley type, since the funding is internal (it is within the sector), the new web 3 entrepreneurs must be well surrounded by talent and be able to encourage them to work with them.

No hay texto alternativo para esta imagen

The paradigm shift is evident, it is transcendental and it is happening too fast, motivated by the technological aspect of it. Hence, it is difficult to explain whether blockchain is the true innovation or it is tokenization that fulfills and assumes this banner, as these are concepts that still need to be explored in depth to give them the weight and place they deserve. Where there seems to be a greater consensus is that decentralization is quite a challenge, positioning itself as an alternative path for anyone who wants to take it.

CRYPTO

Eliminating the power and standard offered by bitcoin, we can say for this section that the phenomenon of alternative currencies (ALTS) began 7 years ago with the launch of the genesis block of ETH in the ethereum network, giving the starting signal to the whole crypto universe that we have before us, a universe so extensive that it is beginning to be difficult to follow and observe. The mother network of all altcoins already has 1.6 B transactions, 4.2 B contracts executed and more than 900 assets compatible with its ERC 20 standard running through its guts. 

No hay texto alternativo para esta imagen

It is complicated to understand the cycles of creation/destruction as a natural selection that this sector has, and especially the altcoins, a selection that self-regulates and filters the good from the bad, ignoring the regular or mediocre. These cycles have 2 clear patterns: in terms of price, they go from maximum euphoria to the most challenging pessimism, with feelings of optimism, acceptance and discouragement emerging in between. In terms of development, the pattern is easier to interpret, as it moves between activity and marketing. The patterns serve to better understand the cycles and rely on them for study, since good projects during pessimism work to communicate and sell better during euphoria, with the intention of attracting investor money, capitalizing and continuing to work in the next bear market.

Speculation is therefore necessary, historically it has helped to build critical infrastructures, in the crypto sector exactly the same thing happens, given that wallets, lending protocols, stablecoins or different blockchains among other things, arise from pure speculation.

NFT

Let’s visually address a sketch of the chronology of this booming sector first, to better understand and put in context its history:

No hay texto alternativo para esta imagen

2017 Crypto Punks and Crypto Kitties 2018 Version 1 platform for NFT (Super Rare), 2019 first virtual lands (Descentraland) and digital card games, 2020 NBA TopShot and V2 of platforms for NFT (Rarible) 2021 influencer input.

Every cause has its effect, and NFTs are no exception. The cause (in a narrow and summarized way) comes from the management and exploitation by companies of your content, in short of your files. We have been blind for a long time due to the distraction and entertainment offered by the dozens of social networks we know, but with blockchain we started to question these business models so monopolized by 4 big technology companies. Our photos, comments, locations and likes are sold and exploited for commercial purposes, monetizing the content and keeping most of the value, where we are the exchange commodity without seeing any of the economic part of the business.

No hay texto alternativo para esta imagen

The solution that has been cooked to solve this, starts by changing the way the file is shared, using blockchain in this case. In this way, the little or no valuable screenshots are eliminated from the formula, to have to go to the origin of a file, establishing the first bases of unique digital property. With this simple change of rules, now the value is in having the original file and not the copy, blockchain playing a master role (I do not mean unique or that it could not be otherwise), for its characteristics of composability, traceability, access and ownership.

So let’s understand the evolution of NFTs as an adaptation of physical and non-physical objects (e.g. video game pieces) to the digital medium, because they need new fundamental powers. Then it will be the market who will set the price depending on the supply and demand they have, therefore before pointing out and judging whether a NFT is expensive or cheap, understand the status, identity and belonging that it gives to its possessor and then absorb its creation. These nuances we already see are no different from the nuances that give value to a boat or a good bottle of wine for its possessor, the big difference is in the acceptance, the costs and the plane through which the asset moves.

From here we will see the creation of DAO’s through exclusive NFT’s, since the future of organizations will be to create decentralized collectives of community ownership, where the NFT will make it as easy as opening a telegram group. We will also see the creation of a very innovative economic activity for content creation, capable of making us the leap from the obsolete current model (where consumption has a weight of 90%, interaction of 9% and the creator only 1%), to another where all the value is concentrated in the creator and not in the consumption. 

No hay texto alternativo para esta imagen

To achieve this, consumption must be selective and on-demand, and not compulsive as it is now. The creation of content must be accompanied by culture in order to feel identified with that creation and its author.

The NFT has the important role and responsibility to provide the creator with weapons that empower him, transparency must be one of them along with their activity, discoveries, travels, donations or investments made, emerging a new concept of equitable distribution of income between user and creator based on the participation and involvement of both.

No hay texto alternativo para esta imagen

In the absence of overcoming many obstacles yet, the shadow of uncertainty always hovers when all the topics of this article are discussed in society, but that same uncertainty is attracting talent and money in equal parts, therefore if you know where we come from, you can better locate where we are and above all look forward to understand where we are going, positioning yourself before things happen will already be your decision and res.

KEEP IN TOUCH & SUBSCRIBE TO OUR MARKET NEWS

This us the World Wide Investor Site, are you resident of the United States of America?