Web3 at a16z (and a bit of a16z’s structure)

An interview with a16z’s (Andreessen Horowitz) head of crypto investing, Chris Dixon. First, a bit on how a16z is structured (good info for anyone interested in startups and VC) then they get into a deep dive on web3, NFTs, and more in that space. I found it a fascinating and informative, if long, read. https://www.theverge.com/23020727/decoder-chris-dixon-web3-crypto-a16z-vc-silicon-valley-investing-podcast-interview

What can you do with a web3 domain?

Well, for one thing you can use it in place of your crypto wallet address. Why? If you register with ENS your crypto wallet address is part of the registration (much like your web2 site’s IP address is a part of your DNS entry) so you can just have crypto currency sent to your web3 domain instead of that long crypto wallet address.

https://cointelegraph.com/explained/the-concept-and-future-of-decentralized-web3-domain-names has a good (maybe a bit too detailed) explanation of how web3 domain registrations work. Registering a domain with https://app.ens.domains/ only cost $5 per year BUT you need to pay the Ethereum “gas” (i.e. pay for the energy required to perform the registration and get the transaction recorded on the Ethereum blockchain, as of this writing about $75).

Is it worth it? Hard to say at this time but if you’ve got the gas money šŸ™‚ why not?

Proof of work vs proof of stake

Energy, in the form of electricity, is how bitcoin and ethereum transactions are validated today. The faster a “miner” can solve a math problem to approve a transaction, the more likely they are to be rewarded with some of the cryptocurrency. And they do that by using a bunch of computers all working together – hence, using electricity. That’s called “proof of work” and is the original idea behind the whole crypto thing. But there’s another idea that’s been catching on – proof of stake – and one that Ethereum has been planning to adopt for quite a while (there are other cryptocurrencies that already use this method). In proof of stake, a prospective validator puts up a stake (a given amount of the cryptocurrency) then one of the prospective validators is chosen algorithmically to validate the transaction. Once validated, another group (“attestors”) confirms and accepts the validation. This is an asttempt to rein in the massive electricity use.

Read more about it at https://www.technologyreview.com/2022/03/04/1046636/ethereum-blockchain-proof-of-stake if you’re interested.

What is Web 3.0 and how does it differ from current?

The article at https://www.makeuseof.com/web-2-vs-web-3-whats-the-difference gives a good high level overview of web3 and its differences from our current web/internet (web2 or web 2.0). What it misses is that all those machines that participate in the chain still need to be paid for along with any hosting and network charges, not to mention the additional resource required to validate and add blocks to the chain.

How are they paid for now, in web2? Generally 2 methods: 1 direct subscription fees (New York Times, Wall Street Journal, etc), 2 your personal information (Google, Facebook, LinkedIn, etc). Could this same model be used? Sure but what I’ve seen put forth in many instances is, in order to protect privacy, users directly pay for the resource using some cryptocurrency. In a privacy-focused web, that’s certainly the most private but how much will you be charged for a “transaction” (i.e. a visit to a site, a page refresh, etc.).

I’m not sure any of this has been sorted out yet. Depending on the level of anonymity desired (and expected) by web3 users, it may not be possible to “pay” with your personal information. Some companies are working on directories whereby a user can control what information is made available to all sites, certain sites, etc but, again, this all is still in a major state of flux. I anxiously await the sorting out.

Good analogies help understanding and hacking bitcoin with quantum computers

About half way thru the article explains superposition and entanglementĀ using an analogy of spinning coins. It’s an interesting analogy and one that could help folks who don’t understand thoseĀ concepts. Aside fromĀ that, the article is interesting becauseĀ it discusses hacking bitcoin (or, more generally, a blockchain) and why more qubits are needed as a sort of error correction..

“You don’t own web3”

Jack Dorsey tweeted this a few days ago (https://twitter.com/jack/status/1473139010197508098) and it caused quite a stir. I don’t completely disagree with him but I think it’s a little different – web3 belongs to those with cash. You see, every transaction, every webpage loads, every search has to be paid for in some way. Why? It’s the cost of owning your own privacy and is the linchpin of web3. No, it generally doesn’t cost a lot but you have to pay in REAL money by way of tokens or cryptocurrency. Want a web3 domain? Sure! Get one at https://app.ens.domains/ for only $5/year. BUT you’ll need to pay the “gas” (i.e. pay for the energy expended to register your domain on the Ethereum blockchain. How much is that? Well, how much does ETH cost? Right now, it’ll cost about $100 to register that $5 domain. Quite a lot different from those deals you can get from “regular” registrars (for .com and .org, etc).

So, which is it? Pay with money or pay with your personal information?

No-code/Low-code web3

A few days ago I was fortunate enough to find out about thirdweb.com over on ProductHunt.com. (see https://www.producthunt.com/posts/thirdweb). ThirdWeb is a platform to help you build and deploy web3 apps and games without worrying about how to make your commits to the blockchain of your choice. It’s still in the early adopter phase and they interface with various testnets so you can create and test your ideas for no cost (you can easisly get free testnet tokens). If you’re interested in learning more or trying your hand at creating a web3 app (dApp), check them out – https://thirdweb.com/early