Screw Web3.
GM, we take the latest Web3 news and translate it into plain old English - so you can stay up to date, without your eyes glazing over.
In today’s edition:
'Screw Web3' - the creator of the internet
Solana Labs are making a phone!
RESOURCE: What is Kucoin? The Non-KYC Crypto Exchange! (Learn in 10mins)
Is Step'n a Ponzi Scheme?
Terms used (click for translation):
Web3, Decentralized, Blockchain, Crypto Wallets, Hardware Wallets, NFTs, Stablecoins, Staking.
'Screw Web3' - the creator of the internet
Remember that episode of The Office?
The one where Pam keeps Creed busy, by asking him to spot the difference between two identical photos.
You know, this one.
Yeah. There's a parallel with that scene and this story.
When asked whether he aligns himself with Web3’s promise, Tim Berners-Lee (the literal creator of the internet) said:
"Nope."
Berners-Lee wants to save his creation from the clutches of data hungry tech companies, but he doesn't see Web3 as the answer.
Here's where The Office parallel comes in:
His vision for what he's calling 'Net 3.0', looks and feels very similar to that of Web3. Here's a side by side for you:
Net 3.0:
Personal data is saved in decentralized 'knowledge shops' known as 'pods'.
Users can select which apps can access their knowledge.
This method aims to offer interoperability, pace, scalability, and privateness.
Web3:
Personal data is saved in a decentralized network of computers known as a 'blockchain network'.
Users can select which apps and networks can access their data.
This method aims to offer security, scalability, and decentralization.
If you're looking at this, thinking:
"Oi! He's just taken the same concept and made the names & titles (somehow) weirder".
You're right, it certainly feels that way.
...and if you're surprised by the strange use of terminology like 'knowledge shops', remember - the internet was originally called 'the information superhighway'.
Here's the key difference between the two visions...
Ol' Timmy doesn't want to use blockchain technology to build Net 3.0:
"While you attempt to construct that stuff on the blockchain, it simply doesn’t work".
Here's the kicker - he's kind of right!
Most blockchain networks can't handle much more than a few kilobytes of plain text data, per transaction.
For example: NFTs don't actually contain image files.
Instead, they contain text-based hyperlinks to images, that are almost always stored on centralized networks (like DropBox and Google Drive).
Wild right!?
So if we want to see a truly decentralized version of the Web, complete with photos, videos and weighty file sharing - this is something that's going to have to be fixed.
Good news is, projects like Arweave are already building to meet this demand.
Nice!
Solana Labs are making a phone!
Most software companies stay in their lane.
But every now and then, one will make the jump to hardware:
Microsoft: Office → Surface
Google: search → Nexus One
Snap: video sharing → Spectacles
Meta: social networking → Oculus VR
Are these hardware offerings all hits? Not necessarily.
But they typically give an indication as to where the industry is heading.
And now, those same early indicators are starting to show in the Web3 space...
On Friday, Solana Labs announced that they were releasing their first piece of hardware - the Saga phone.
As far as the hardware goes, it looks pretty similar to a regular old android phone - but it's been built with Web3 in mind and has some awesome, Web3-specific 'bells and whistles'.
Here’re the top features that make the Solana phone stand out:
Its own decentralized app store, called the Solana Mobile Stack. (No more sharing 30% of app revenue with Apple).
Seed Vault, an all-in-one password storage system for your crypto wallets that essentially turns your phone into its very own hardware wallet.
Solana Pay (think ApplePay, but it allows you to buy items using Solana's SOL Token).
...ok, cool. But are folks really going to trade in their current phones to get the Saga?
Probably not, but it doesn't matter!
It's still great for Web3. Here's why:
If developers latch on (and it's a big 'if' at this point), it will help make decentralized products more ubiquitous.
If Solana can find any hint of success across their hardware and/or software offerings, competitors will swoop in and adopt similar features.
The potential knock-on effects of this adoption could be pretty exciting! For example:
Saga users love the Solana Pay app → Apple integrates crypto wallets into ApplePay → 1 billion iPhone users are seamlessly onboarded into crypto, from an app they already use and understand.
If Solana's transition from software to hardware is a success, it'll most likely become a new blueprint to profitability within the Web3 industry.
Let's hope they stick the landing!
Resource of the day
What is Kucoin?
The Non-KYC Crypto Exchange!
(Learn in 10mins)
Is Step'n a Ponzi Scheme?
There're a lot of weighty terms in Web3, many of which sound like they're designed to intimidate.
One that you'll hear thrown around a lot, when researching crypto investments, is 'tokenomics'.
(Token + economics = tokenomics)
Tokenomics pretty much asks 'how will this crypto succeed?'.
...or if you're more of a glass half empty kind of person, 'how is this crypto not a scam?'
The article linked here is all about the move-to-earn app Step'n, which tracks your movement through your phone's GPS and pays you in Step'n's 'GST Token' in return.
(If you want a refresher, we wrote about it a while back, here).
It's a neat concept!
...but after using it for a few months, we have questions - specifically, 'how will this crypto succeed?' (Long term).
Here's how the 'tokenomics' work at the moment:
New users come in, buying an NFT sneaker (currently ~$120) to unlock the move-to-earn capabilities.
They move, they earn.
As users progress each day, they're incentivized to spend their earnings on sneaker upgrades, which will earn them more GST per step.
Any GST that is spent on upgrades is destroyed (or 'burnt') by Step'n. This helps to lower the total circulating supply of GST, making it more scarce (and theoretically) more valuable.
If users want to convert their earnings into cash, they can trade GST for the USDC stablecoin, in app. (Too much of this selling will drive the GST price down).
Here's the issue: once new users stop coming and buying $120 NFT sneakers - where do Step'n get the cash to pay out their existing users?
Buying upgrades can only go so far - at some point each user is going to want to stop spending and start earning.
The ability to stake (or 'lock up') the Step'n tokens, in return for a steady interest rate, might slow the issue - but it won't solve it.
If the system can't sustain itself without constantly acquiring new users, it begs the question: 'how is this not a scam?'
Or better yet, how is this not a literal Ponzi Scheme?
The answer (at this point in time) is kind of boring:
It might be, it might not be...
Most start-ups will burn through cash for years, without turning a profit. The difference is, they have a roadmap to profitability laid out.
If Step'n can show long term plans to reach consistent profitability, we're good!
Your Daily Dose of Web3
Alright, that’s it for today!
Love to the family,