What is missing from the current definition of Web3 from the perspective of Bitcoin?

1. The emergence of a superficial definition of Web3

Web3 has many different definitions, and everyone has his own Web3 in his mind. Some say it is the next generation of the Internet, and some say it is the infrastructure for future applications such as NFT and the Metaverse. The concept is good, but the stairs are noisy, and no one is coming down. We have the theory, but no killer application like ChatGPT can explode the market suddenly. ChatGPT results from many years of continuous human exploration of large neural network models, just like the successful cryptocurrency exploration by the cypherpunk community and Satoshi Nakamoto. From Web1 to Web2, applications lead the way, and a concept summary follows. No matter how good a concept is, it is just a gust of wind if there are no applications to follow. There are few things like Web3, where the idea has been hot for a long time, and no killer application like Bitcoin has emerged yet. The reason is that web3 is a continuous summary and refinement of Satoshi Nakamoto’s thoughts, and the span of Satoshi Nakamoto’s thoughts is too large. No one in the industry has reached this thought span, resulting in us all being blind and trying to figure out the elephant.

Before Satoshi Nakamoto, based on the high degree of integration of web2 and the progress of artificial intelligence, people had many conjectures about what the next generation Internet would be. The mainstream view was that it should be the Semantic Web model. This view has been controversial since it emerged. Since there are no successful practical cases, the model of the next-generation Internet is still in “science fiction.”

People realized the world could be played like this when Bitcoin emerged. In 2014, five years after Bitcoin came out, Kavin Wood, a scientist on the front line and co-founder of Ethereum, proposed the idea of Web3 based on Bitcoin. After all, he is just a technician and can only make a superficial refinement of Satoshi Nakamoto’s thoughts. The concept he proposed has advantages and disadvantages. The advantage is that it is easy for technicians to listen and listen to it. The disadvantage is that refining Satoshi Nakamoto’s ideas into a zero-trust system and decentralization is unimaginative and forward-looking, deviating from the entire market. His crappy project Polkdot says it all. The currency price is less than 11% compared to the highest point. A so-called star project backed by a star has fallen out of the top ten. Not only did it far underperform Bitcoin, it also underperformed the stablecoins and centralized exchanges that emerged during the same period. The cruel reality reminds people that cryptocurrencies after Bitcoin have not yet brought as exciting, innovative cases to the world as ChatGPT, nor have they created greater uses for wealth other than speculation. The migration from Web2 to Web3 described by Wood did not happen, nor did Web 3.0, “a secure social operating system” he envisioned. The practice has proved that the road pointed by Wood is a rigid wooden road, a road that fails both in theory and practice.

Another five years have passed, and from 2018 to 2021, entrepreneur and venture capital expert Chris Dixon made a new summary of Web3. He never mentioned blockchain and tried to avoid decentralization, believing that overly centralized web2 is not good, but a degree of centralization like web1 is allowed. Dixon proposed to determine who owns the data and whether it is right if it is in the hands of the user. He avoided all technical judgments of Gavin Wood. Under this judgment, NFT exchanges such as Opensea that engage in centralized trading can also be regarded as projects under the Web3 concept. It broadens the already dead game.

Dixon’s core ideas are reflected in several articles, such as “Why is web3 important?”, describing Web3 as builders and users jointly owning the Internet and digital assets being the link between builders and users. Dixon made a higher-level summary of Satoshi Nakamoto from the technical and ideological levels than Gavin Wood. Still, he devalued the blockchain in the eyes of technology experts, causing great controversy, such as the original Twitter CEO Jack Dorsey and others objected.

Building on Dixon, Eshita, a researcher at the research institute Messari, described the evolution from Web 1 to Web 2 to Web 3 as:

Web 1 is “read”;

Web 2 is “read + write” (read + write);

Web3 is “read + write + own” (read + write + own).

Upon closer inspection, web1 can also read and write, and web2 can be read and written to different degrees. However, this definition is intuitive and straightforward and has become mainstream. Like the blockchain, this definition is just a feature of Bitcoin and is not a complete and accurate representation of Satoshi Nakamoto’s thoughts.

2. Defects of the above definition of Web3 from the perspective of Bitcoin

Theory comes from practice and, in turn, guides practice. If the theoretical summary is wrong, the practice will be wrong, and we will wander in the dark for a long time. 14 years have passed, and there is still no project that can surpass Bitcoin. It is unimaginable in the Internet era. It’s like the tortoise and the hare. The hare has been resting for 12 years, but the tortoise still crawls, crawling and crawling; the goal is still just as far away. It can only mean one thing: the theory is wrong. What to do? This requires comparing it with the Bitcoin system and discovering the differences. Only then can we understand why rabbits can sleep and how to catch up with rabbits. Just understand it, let alone surpass it. It will be considerable progress even if it can catch up with Bitcoin.

Ownership and control are different

We analyzed the above definition and found that “own” is crucial. Who owns the Bitcoin ledger? Miners own it? Even if 10,000 miners unite their will, their say in the Bitcoin ledger will not count because there is also a type of full node that does not mine but only saves data by itself. Likewise, neither programmers nor users own the ledger. However, users have control over their accounts, and programmers control modifications to the Bitcoin system.

This control is crucial. Miners have no control, only ownership of the ledger in their own server. Their only right to participate in the project is to compete for profit. Do programmers profit? No profit is made; they rely on donations. It is the question left by Satoshi Nakamoto. The programmer control issue is one reason why Satoshi Nakamoto left. He did not want to be “the president of the Bitcoin Central Bank.” His departure cannot solve the problem. The Bitcoin system still needs control, and the system still needs trust, but the objects of trust are different. The so-called “zero trust interactive system” is a one-sided refinement and misleading. For a system to progress, it must have a controlling party. Fortunately, relying on human wisdom, the Bitcoin system evolved to community control.

The form of community control is critical, and the community should be the highest body for coordination and decision-making among all stakeholders. Because they, as a whole, “own” this project directly and indirectly, just as the people “own” the country. Just as shareholders own the company, note that “possession” can be real or imaginary; it does not mean control.

Communities are not new; they are also found in web2 projects. For example, WeChat communities and Facebook communities. This similarity makes it a definitional regret that Dixon does not regard Satoshi Nakamoto’s community thinking as a main feature.

The company has management control but no community governance. The Bitcoin system is different. The Bitcoin community has precisely the right to control. The company’s control rights and equity are consistent by design. At the same time, the Bitcoin system has no equity but only control rights and has formed the principles of openness, transparency, and consultation. Of course, the actual community control power is still minimal.

Community control and decision-making in cryptocurrencies are advanced. It is the way an ownerless system should make decisions. The country is also an ownerless system, and civil servants are just like programmers in the Bitcoin community. The most advanced method is to adopt a similar decision-making mechanism.

Should our policy formulation on cryptocurrency use the form of the community to achieve openness and transparency, equal participation, and consensus? We have seen that whether it is the Federal Reserve or the Financial Secretary of Hong Kong, you can write to them, and they will reply that they have received it, and that’s it. It’s still the Web1 model. As participants, we have no power to engage in dialogue. In the Bitcoin community, Satoshi Nakamoto participated in customer service for 2 years. He listened directly to opinions, solved problems, and only left when the system was stable. It is a requirement for the actual controller. Supervision sometimes has the final control because it represents the rules. Could some of today’s great men solve brand-new problems that they don’t quite understand by just tapping their foreheads? Their easiest solution is to go back to the old framework, which is nothing but control until death. Sadly! Gary from the SEC has the nerve to teach Bitcoin classes. Undoubtedly, he is the senior official who knows the most about cryptocurrency. However, his bad policies reflect that he is not as knowledgeable about the community as Trump and Musk and is obviously an era behind them. Two generations behind the Bitcoin community.

Cryptocurrency is global. We see that even Coinbase wants to leave the United States, which shows that the big boss does not have an international management vision and that they are amateurs. It’s no wonder that the experts’ definition of Web3 does not cover the community.

The Bitcoin community still needs further improvement

If cryptocurrency managers do not understand the community, how can they manage cryptocurrency well? In practice, the Bitcoin community is still imperfect and needs to improve. Dixon has a good saying: “Digital assets are the link between builders and users.” In other words, this is the fundamental difference between the web3 community and the web2 community, and it is also the fundamental advantage of web3 over Web2. This point is not reflected in the definition of Web3.

The Bitcoin system has three types of currency holders: users, miners, and programmers. However, only the programmers’ technical community is regulated, miners are marginal, and users have no say at all. The bonding effect of coins is not apparent.

The distributed organization (DAO) with currency as the link is the community. Bitcoin must have three communities: the technical community, the miner community, and the user community. The three communities together make up the Bitcoin community. All three communities are independently elected. The representative’s recommendation is based on artificial intelligence, first making recommendations based on the members’ activity level in the community and finally voting on the recommenders based on the members’ currency holdings. The Bitcoin community should consist of 9 representatives, 4 from the user community, two miners, and two programmers. And Satoshi Nakamoto. Setting up the Bitcoin community was also one of the reasons that prompted me to find Satoshi Nakamoto. Who is Satoshi Nakamoto? I’ve found it. See my article: “Invite out Satoshi Nakamoto to welcome the new world” (chainless.hk). Satoshi Nakamoto has his mission.

In the Gamestop incident in the U.S. capital market last year, retail investors miraculously defeated the bankers, illustrating the tremendous power of united retail investors. At present, the largest number of users of Web2 is 2 billion. They do not use coins as a link, but the Bitcoin community has unique advantages. If the Bitcoin community is a community of 2 billion people, it exceeds the number of people in any country. It indicates that no one can easily decide the fate of the organized Bitcoin community. The Bitcoin community is one of the primary conditions for realizing the Bitcoin standard and one of the basic conditions for defeating the legal currency and gold standard. Because it is very difficult to establish a unified community between legal currency and gold, for further discussion, please refer to the relevant articles of chainless.hk.

Low management costs are a characteristic of the Bitcoin system

How much management cost does a community of 2 billion people need? It is not much different from managing a Bitcoin forum, which costs almost zero. It requires a lot of artificial intelligence programs to come into play. The Bitcoin system has only 4 maintenance personnel, and the cost is almost zero. That is distributed community autonomy, and no owner intercepts profits. Any centralized system is like a hijacker, but the Bitcoin system has no equity, and no individual owns the system. It is the standard for an ideal Web3 project. Not every project can meet this standard, but the closer it is, the better.

By the way, many people question the cost of Bitcoin mining, namely the electricity consumption. In fact, this is just a question that miners should calculate and consider. We should not be unfounded. In order to pursue maximum benefits, They must ultimately use green energy and promote the energy revolution.

What we care about is management costs. The market value of YouTube is similar to that of Ethereum. It is a very efficient Web2 system used by about 1,000 people. There are less than 30 people in Ethereum. This is the difference between web2 and web3. There is no comparison between YouTube and Bitcoin because Bitcoin only uses 4 people. But Bitcoin’s community function is imperfect. As a basic functional web3 project, Ethereum should be a standard.

Only by improving efficiency can it be viable. The Bitcoin system is highly efficient as an integrated currency issuance, clearing, and settlement system. It surpasses all Web2 systems with similar functions but cannot reach web2 as a payment system. Satoshi saw this clearly, so he ran. Ethereum’s payment efficiency is no match for Alipay, so it is a fantasy for Ethereum to defeat web2. The current Web3 definition misleads the market because it does not address efficiency issues.

What is a web3 project? If Bitcoin is used as the standard, then the definitions of the above experts must be further improved and the content added.

3. Web3 project definition of cryptocurrency

First of all, the Web3 project is an Internet project.

It has 5 features:

Community ownership and community control;

community members use coins as a link;

distributed autonomy makes management costs almost zero; personal data control lies with individuals,

which is in line with the machine trustworthiness of Bitcoin.

Still speaking from the previous point, web3 projects that meet the above definition do not need to surpass Bitcoin; get close.

The Bitcoin system implements a machine-trusted approach and does not require the supervision of regulatory agencies, so it is an efficient system. The machine trust characteristics of the Bitcoin system can be summarized as follows:

Data characteristics: Data sovereignty lies with the people, and data is transparent and trustworthy.

Community characteristics: everyone contributes resources, shares benefits, and participates in governance.

Control characteristics: The trusted party has an automatic check and balance mechanism. The system itself has a negative feedback design.

Negotiable properties: Code is law. Modify the code according to the rules.

Trust characteristics: The fewer people you trust, the better, and the longer the trust has been experienced, the better. That is, credit must be accumulated over time.

Financial characteristics: The ledger is open, transparent, and cannot be tampered with.

Operational characteristics: The system does not go down.

Please look at the relevant articles in the chainless (chainless.hk) for a detailed explanation.

4. The future has arrived

The experiment of cryptocurrency is not meaningless. It makes us realize the problem of the web3 definition and that decentralization is not the ultimate goal, and blockchain is not the ultimate means.

The competitor of Web3 is not a minor partner of the blockchain, but Web2 must aim to surpass Web2.

It requires that Web3 can be partially centralized and does not necessarily have to be “decentralized.” However, it does not simply adopt centralization. Centralized projects should be transformed using Satoshi Nakamoto’s ideas to comply with the new definition of Web3. Only in this way will phenomenal projects like ChatGPT be possible to emerge and defeat Web2.

After years of hard work, the ideas have become clearer and clearer, and new projects are on the horizon. It is a universal financial system based on Web3. This transparent centralized, and trustworthy universal system requires connections with existing legal and business mechanisms and robust interfaces with the real world, legal, and economic systems.

Note that “openness and transparency” is the first quote in the Bitcoin white paper and is Satoshi Nakamoto’s consistent core idea.

It’s time for both Bitcoin and Web3 to change. Traditional finance, the final nail-biter, will fall under the iron heel of Web3 if it does not actively embrace the new Web3. Whoever it was must have died miserably.

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