Web3, Rug Pulls and .eth domain name sales, explained

The way we bank, spend and invest is changing. And women have a unique opportunity to get a head start on the matter of money. Whether it’s a world of cryptocurrency, decentralized finance, Web3… or something else entirely. Welcome to Future-Proofed: your monthly resource for everything you need to know about the future of money, from basics and jargon to crazy news and trending coins.

So this Web3 thing…

The story

Web3 could be the next version of the Internet.

To safeguard. What are Web1 and Web2?

Web1 is the internet of the 90s and early 2000s, when websites were basically static pages and banner ads. Think: Dial-up and AOL. Web2, aka Internet Today, refers to the version of the web after the invention of social media. The main difference between Web1 and Web2? The Internet has become much more interactive. So instead of just reading content, users could also create and share it (hello, ICT Tac).

And what is Web3?

Web3 is a vision for the next iteration of the internet. It’s still a WIP, but fans say it would be decentralized and built on block chain (reminder: the technology on which the cryptocurrency is based). The idea is that users could create and share content without depending on platforms like Facebook, Instagram or Google. Web3 proponents say it could give people more ownership over the content they create and consume.

How would that work?

Take Instagram for example. Users don’t own their handles, Meta does. And the data that users generate by scrolling, liking, saving and commenting also belongs to Meta. With Web3, the idea is that instead of posting content on a platform like Instagram, users would share content on a blockchain-based platform. And rather than big tech controlling and monetizing this content, it would be maintained by users and communities through blockchain transactions. Which could mean that users would not only have the ability to create and share their own content, but also, potentially, make money from it.

Wait, is there money to be made here?

There could be. Today, social media platforms like Instagram make money by collecting user data and selling targeted ads against them. A Web3 reinvention of the social media platform could allow users to own and monetize their data or earn money by creating and sharing great content. (To be determined on how exactly that would work.) And even the content itself (think: photos, videos, etc.) could be considered digital assets that could be bought and sold. (TBD on how that would work as well.)

theSkimm

Web3 is another possible iteration of the Internet. Fans say it will be decentralized and could give people more ownership over their content and a bigger share of the profits generated from it. But to be determined on the details. For now, it’s mostly theoretical.

To the Moon

When a cryptocurrency goes “over the moon,” it means the price of a particular coin is rising off the charts. Each month, we’ll talk about a coin, NFT collection, or other blockchain-based investment that has a lot of buzz…and discuss whether that buzz is legit.

Imagine snagging the @Nike Instagram handle before the company could access it. It’s the kind of gold rush happening right now for .eth domains. The Ethereum Name Service (ENS) allows users to purchase domain names on the Ethereum blockchain. When someone types this domain name into a database like Etherscan, it displays all NFTs and transactions of the user. Like connecting your Instagram with your Venmo, but make it Web3. And those domain names themselves are NFTs, meaning if a brand like Nike or any other user wanted that domain name, they would have to buy it. (Hint: dotswoosh.eth recently sold for around $38,000.) ENS saw a record 378,000 .eth domains registered in July alone, generating over $10 million in revenue.

ask a friend

Since its inception, the Bitcoin blockchain has been hailed as a decentralized and trustless financial system. Read: Computer code validates transactions instead of a bank or other central authority. But a person (or a group of people) had to write this code. theSkimm spoke with data scientist Alyssa Blackburn, who sought to determine how much trust early Bitcoin adopters placed in these programmers.

theSkimm: Can anything – even algorithms, computers, technology – designed by humans really be trustless?

Alyssa Blackburn: Bitcoin was designed to not have to depend on a trusted third party. For early adopters, this meant the promise that no single entity would block users from accessing and spending funds. During our study period, we found that this was not the case. There were often different users who were effectively the arbiters of the network. When you use any type of financial software, or even software in general, you implicitly trust the authors of that software to have written it with good intentions and not to have made errors that expose you to theft. or fraud.

This interview has been edited for clarity and length. Learn more about Blackburn’s discoveries here.

Thing to know

carpet zipper

Basically a scam. Crypto is a relatively new industry and there aren’t many regulations in place to protect consumers. So almost anyone can develop a project on the blockchain (think: create a new cryptocurrency) and manipulate its prices. Enter: a carpet jumper. What happens when a developer abandons a project and runs away with the investors’ money. Last year, the developers of a coin inspired by the Squid Game won $3.3 million after a raffle. What attracts victims? FOMO. Scammers exploit social media to trick potential investors into believing that their project is the next big thing and that missing out would be a lost investment opportunity. Reminder: If it sounds too good to be true, it probably is.

Quick Quiz

Which group represents about a quarter of Web3 investors?

A.Gen Zers

B. Pensioners

C. Women

D. Hedge Fund Managers

Hot on the Web

Pop quiz answer:

C.: Women. According to cryptocurrency market Gemini, 26% of Web3 investors are women.