Web 3.0 (web3) and Non-Fungible Tokens (NFTs) are two buzzwords we have been hearing a lot in the past two years, mostly in the world of crypto, social media, and technology. People in the crypto space believe in web3 and that working in web3 is essential for the digital future. Together, web3 and NFTs have the potential to revolutionize a wide range of industries, from art and collectibles to fashion to gaming and finance.
Web 3.0
Web3 is a new model for the internet that is built on blockchain technology and aims to give users more control and power over their data and assets by eliminating the need for centralized intermediaries. In Web1, the internet provided us with read-only content, where users were logging into the internet to only receive information from static websites and no opportunities for users to interact with other users. Web2 evolved to dynamic websites with users reading and creating content (e.g. Youtube) as well as interacting with each other through the rise of social media platforms (e.g Instagram and Facebook). Web3 however, gives users ownership of their content and creations, running applications on the blockchain instead of a single server and relying on artificial intelligence. If Web1 was to 'consume', then web3 was to 'create' and web3 is to 'own' 'empower' and 'decentralize'.
Web3 is built using blockchain technology as a response to the growing dissatisfaction with centralized systems and institutions. This new version of the web would allow users to own their data and applications, and to interact with them in a more direct and secure way. For example, web3 can help to address issues like data privacy, security, and censorship, while NFTs can help to protect the rights of creators and reduce the prevalence of fraud. Web3, therefore, allows for greater decentralization and autonomy for users and has the potential to disrupt traditional business models and create new opportunities for artists, creators, founders, and builders.
Bitcoin, one of the first blockchain based decentralized networks, demonstrated the potential of this innovative technology to create a new type of financial system that is based on trust and consensus rather than intermediaries. Blockchain technology was later extended to create other decentralized networks, such as Ethereum, which introduced the concept of smart contracts and made it possible to create decentralized applications (dApps). Emerging artists, with a small following, could create digital art and sell it on the blockchain by deploying a smart contract and sharing their art with thousands of collectors instantly without the need to go through intermediaries. The last two years have seen a surge in the NFT space, with new artists finding success in selling their digital creations and growing their personal brands. However, there has also been an influx of scammers looking to take advantage of this growing market.
Smart Contracts
Smart contracts are a key innovation in blockchain technology and are self-executing contracts with the terms of agreement written directly into code. These lines of code are stored on the blockchain and can be executed automatically when its terms and conditions are met. Smart contracts are important in web3 because they allow for the creation of dApps or NFTs that can be executed without the need for a central authority or intermediary. This can significantly improve the efficiency and security of transactions, as well as reduce the costs associated with the execution of traditional contracts.
Smart contracts can be used in a wide range of applications. Artists use them to create generative art, collections, or one-of-one art. Artists use smart contracts to create and mint their unique artwork and manage the ownership of their art. Their smart contract would include basic information such as their name, the name of the artwork, whether it belongs to a collection, and a unique identifier for their NFT. An artist's NFTs can sell multiple times on secondary marketplaces, with funds being transferred from one collector to another and a percentage of royalties (if set under terms in the smart contract) being transferred back to the artist. The smart contract, thus, also works to ensure that the creator's rights are protected and their assets are not replicated. NFT Platforms like Manifold are now evolving to give creators more freedom which allows artists to create their own smart contracts, with their own terms and conditions and royalties.
NFTs
NFTs, or non-fungible tokens, are a type of digital asset that are unique and cannot be replaced. They are minted on blockchain technology and are used to represent digital art, collectibles, and other types of digital assets. NFTs provide a new way to represent and trade digital assets, opening up new markets for creators and collectors of these digital assets. With the creation and minting of NFTs came marketplaces such as Opensea, Foundation, and Rarible where collectors could trade or sell their NFTs. These platforms are also evolving to meet the demands of the space and have to deal with issues such as verifying projects and collections and delisting fakes.
https://opensea.io/assets/ethereum/0x9594aDdCCb032366835DF689DDD83a98a12e7A1C/8
Web3 and NFTs have the potential to help solve some of the major problems facing the internet today such as data privacy, security, and censorship but because this technology is still in its early stage, the possibility of scams, rug pulls, and hackers taking advantage of people is also high. Many people have fallen victim to scams or hacks and their crypto wallets have been drained, their social media accounts or Discord servers compromised, as easily as clicking a suspicious link. However, it is a risk that millions of users take each day because they see the potential web3 has, to bring power back to the people.
https://opensea.io/assets/ethereum/0x0B3E901B50C6db0A4587D17F6B62dd692b5A13aD/3