What Creators Need to Know About Web3 and Crypto
What is Web3 all about?
Simply put, Web3 is the next phase of the internet. It's a decentralized platform that promises to change the way we use the internet for years to come. But what does that mean for creators?
In this blog post, we'll explore Web3 and how it could benefit content creators and online business owners like you. We'll also take a look at some of the controversies surrounding Web3, and answer some common (very basic) questions about crypto and blockchain technology. So, if you're curious about Web3—or just want to learn more about how it will impact your life—keep reading!
Web3 is still in its early stages, with many projects still in development. But there are already a few key features that set it apart from Web2 (the internet that we all know and love).
An introduction to Web3 for creators
For one, Web3 is decentralized, which means that no single entity, like a government or corporation (or, you know, Google), can control it. This decentralization, theoretically, makes Web3 more secure and private than Web2. Additionally, Web3 is designed to be more user-friendly and accessible than many of our pre-existing Web2 technologies. Finally, Web3 is built on blockchain technology, which allows for things like NFTs (non-fungible tokens)–a new way to buy, sell, and trade digital assets.
Before we go any deeper, here's a primer on some of the basic terms used within the Web3 community:
Web3 Explained
A Glossary of useful terms
NFTs: non-fungible tokens, a type of cryptocurrency that represents a unique digital asset (like a piece of art or a video)
Blockchain: a decentralized, public ledger that records all crypto transactions
Cryptocurrency ("crypto"): a digital asset that uses cryptography to secure its transactions and to control the creation of new units. Some examples of popular cryptocurrencies are Bitcoin and Ethereum.
Web Wallet: a type of digital wallet that allows you to store, send, and receive cryptocurrency
Fungible: able to be exchanged for another good of the same type (like a $20 bill)
Non-fungible: not able to be exchanged for another good of the same type (ex. land, a work of art, etc.)
Cold Wallet: a type of cryptocurrency storage that is not connected to the internet (offline storage)
Hot Wallet: a type of cryptocurrency storage that is connected to the internet
Mining: the process of verifying and adding transaction records to a blockchain
Smart Contracts: digital contracts that can be executed automatically when certain conditions are met
How will Web3 benefit creators?
Now that we've got a basic understanding of what Web3 is let's talk about how it could impact creators. To start with, since Web3 is designed to be more private and secure than Web2, your data is less likely to be hacked or stolen. (Of course, take that claim with a grain of salt.) And because Web3 is decentralized, you also have more control over who can access your data. And most importantly for you as a creator, blockchain technology—the foundation of Web3—has the potential to revolutionize the way creators sell and trade digital assets and are compensated for their work. For example, with NFTs (see above), artists can sell their digital art for cryptocurrency. And because NFTs are stored on the blockchain, they can ensure, through smart contracts, that they'll receive payment promptly and a commission for any subsequent re-selling.
Why is Web3 controversial?
While there are many potential benefits to Web3, it's not without its controversies. One of the biggest criticisms of Web3 is that it's too complicated for the average person to use. (If you've spent any time trying to follow crypto conversations on Twitter or Discord, you know what we mean...) Some people also worry that Web3 will be used to launder money or finance terrorism. Additionally, because crypto is still relatively new, it can be quite volatile–which means the value of your bitcoin or NFTs could go up or down unexpectedly (and dramatically).
One of the biggest concerns with Web3 is surrounding the environmental impact of crypto mining. The process of mining crypto requires a lot of energy–and currently, much of that energy comes from burning fossil fuels. As we move towards a more sustainable future with web-based technologies, we need to be aware of—and working toward—mitigating their environmental impacts.
Climate change and the transition from Proof-of-Work to Proof-of-Stake
When it comes to blockchain, two of the most common terms you'll hear are "proof-of-stake" (PoS) and "proof-of-work" (PoW). So what do they mean?
Proof-of-Work: PoW is the original consensus algorithm used by Bitcoin. In order for a transaction to be added to the blockchain, miners (see "mining" above) must solve a complex computational problem. The first miner to do so is rewarded with cryptocurrency.
Proof-of-Stake: PoS is an alternative consensus algorithm that doesn't require mining. Instead, users stake their cryptocurrency–that is, they lock up their coins in order to participate in the network. The more coins you stake, the greater your chances of being selected to validate a block (and earn a reward).
Many people argue that PoS is more energy-efficient than PoW, as it doesn't require the same amount of computational power. In fact, Ethereum has committed to moving from PoW to PoS this year, and this transition is expected to significantly reduce energy consumption, resulting in carbon sequestration of the size of Belgium every year. (source: https://forkast.news/ethereum-save-with-proof-of-stake/)
It's up to each individual blockchain to decide which consensus algorithm to use, and many environmental groups are pushing Web3 decision-makers to transition to more energy-efficient practices.
What's next for Web3?
So far, we've mostly seen tech-savvy early adopters using and experimenting with crypto and blockchain technologies. But as these technologies become more user-friendly (and less volatile), you can expect to see more mainstream adoption in the years to come. And as more people and businesses get involved with Web3, the technologies will continue to evolve and grow. So what does that mean for you, as a creator?
If you're a creator interested in trying out some of the new technologies being developed for Web3, there are a few ways to get started.
First, check out some of the popular web wallets like MetaMask or Argent. These will help you store and manage your cryptocurrency. You can also start mining crypto or participating in validating transactions (this is called "staking"). Also, keep an eye out for new platforms and applications that are being built on Web3–these will be the places where you can start buying, selling, and trading your digital assets on the blockchain.
If you're interested in learning more about Web3, there are a few ways to get involved. First, you can join one of the many online communities dedicated to Web3 (MyBFF is a good place to start).
And remember, it's still early days–which means that Web3 is constantly evolving. Web3 has the potential to revolutionize the way creators like you are compensated for your work–making it an important development to follow in the coming years. And in case it wasn't obvious, Web3 comes with some risks. Be careful and have fun!
