Since the blockchain technology was introduced in 2008 behind the bitcoin transaction, we have witnessed how blockchain has transform how we live, work, and play.
- Stablecoin – The new way to send money.
How do we send and receive money back in 2000? Banks and trusted third-party platform such Paypal aka “middle man” for securing peer-to-peer transactions.
Stablecoins make it easy to send and receive money for peer-to-peer without any middle man.
Stablecoins allow merchants to save about 3-5% on the transaction fee being charged by the payment gateway or platform. Merchant will still have to pay a very small amount of “gas fee” for the blockchain(s) to store and process the transactions. - DeFi – Decentralized Finance
We are living in a world with unrealistic interest rate. The interest rate you got from the bank is a totally unreasonable compare with profit the bank made using YOUR money. Furthermore, the next year your balance sheet seems increase by ~1% because of the interest paid by the bank, in fact the value of your money just decreased by 2~3% due to the inflation.
DeFi creates an opportunity for savers compared to what they can get from the banking system. A saver can take out loans and deposit money by interacting with a blockchain protocol rather than a bank.
When a saver lend on a decentralized blockchain, say Ethereum or Solana, they skip the steps in loan origination, overhead, and administration end up with more interest income. - NFT – Digital Assets on blockchain
There was a hype for NFT such as CryptoPunk but what is an NFT? An NFT is a “non-fungible token”, a digital representation of an asset that cannot be easily substituted for something else.
Back in February 2022, there was a $23.5M sale for Punk #5822.
What is NFT minting then? NFTs are sort of traditional trading cards. Imagine you put a coin into the trading card vending machine and got a super rare trading card. The rarity of the card and value remain unknown.
In the same scenario, now you are minting a NFT using your money from a crypto wallet and for a super rate NFT, the rarity, metadata and the value of the NFT is transparent. You own the NFT and all these records are stored on blockchain. - Blockchain Gaming
Blockchain gaming is another hot sector of crypto that creating new economies.
For instance, Axie Infinity, one of the category-leading blockchain games released in March 2018 has quickly gained adoption and established its own virtual economy.
The game introduces a new business model called Play-to-Earn, generating revenue by charging a 4.25% “take rate” on player-to-player transactions.
Traditional game developers ruled all in-game transactions and property rights. In blockchain gaming, 95% of revenues as well as the property rights go to the players
- Metaverse
The metaverse is a virtual universe where users wearing digital avatars that let them “live” in this digital world. In the metaverse, people can connect with friends, buy and trade digital assets, own digital property and sell goods or services for income.
Facebook’s rebranding to Meta has brought the concept to the fore. Meta is dubbed as a social technology company that aims “to bring the metaverse to life”.
Today, there are hundreds of decentralized metaverses, with Decentraland being one of them — the list goes on and on. Users can buy and own land on the platform and even host online venues. - Web 3.0
Do you remember the Equifax Credit Card breach in 2017? Big corporations are failing to secure consumer data they’ve collected and stored.
Web2 Big Tech companies are selling user data through cookies, mining, email, search history, and IP addresses. They monetize customer data through ads, causing consumers to give up privacy.
For instance, Gmail is a Web2 service. Gmail is free to use with limited disk space and also monetized by ad targeting. The email is also subject to “3rd Party Data Access Rules”.
Unlike Web2, Web3 email services are decentralized — they are not controlled or owned by any centralized entity. The email is not subject to censorship. The service runs autonomously and the data is secured by the blockchain.
Web3 is centered around the values of user control. Users control whom they give their data to and can revoke those privileges. Users can demand compensation for the monetization of their data. In Web3, users can opt-in to sharing their information with a website by connecting a wallet such as Metamask. Way different from the Web2 websites today that may be collecting user’s information without his/her knowledge.
Conclusion
Blockchain is changing how we spend, save, borrow, play and work.
Assets are moving on-chain. Web3 and metaverse are emerging. New models of creating, ownership, and engagement are getting traction.
It’s still very early days for Web3 and crypto.
Last but not least, blockchain has limitations such as processing speed, the expensive cost of storing data on-chain as well and it’s hard to scale.
There were also arguments about the so called “decentralized network” were built on top of the “centralized” network of cloud computing giants.
The limitations and arguments of blockchain were the same thing people used to argue about when the first internet TCP/IP was introduced in 1983. Most of the people don’t really think the internet would scale considering the lack of infrastructures and a 56kbps online speeds. Look at the population using the internet now.