There are moments when you just know it’s the beginning of something transformational.

1995 felt that way when we first used the Netscape web browser. These were the early days of the internet with 56k modems required to access AOL and Yahoo! This was the beginning of web1, launching the information economy, where users could “read” static pages, user content creation was in its infancy, and there was very little interactivity. Would you ever have dreamed of spending hours surfing the web or used your credit card to buy something online? That would have been crazy!

2004 felt that way when I first joined LinkedIn. These were the early days of social connectivity, interactivity, and user-generated content. Platforms like Facebook and YouTube rose to prominence. This was the beginning of web2, defined by a platform economy where users could both “read and write,” powered by apps and amplified by smartphones. Would you ever have dreamed of putting your whole life online for the world to see or getting into a stranger’s car to take you somewhere? That would have been crazy!

Now in 2022, I’m starting to get that feeling again.

Welcome to Web3

These are the early days of the mainstreaming of crypto, the start of commerce without boundaries and intermediaries, and even more immersive online experiences. This is the beginning of web3, and it is creating an ownership economy where users can “read, write, and own” based on decentralization, transparent blockchains and token-based economics. Would you ever dream you’d own more digital goods than physical goods or access everything via non-fungible tokens (NFTs)? That would be crazy!

To be honest, I was skeptical at first. Like many others, I was a casual observer and thought this was a mix of hype and speculation. I needed to go deeper to make a more informed assessment and have spent the past 12 months going down the web3 rabbit hole learning as much as possible. After reading a ton and speaking to some of the smartest folks I know in tech and venture, I’ve been putting my learning into practice, setting up my own wallet, watching how Discord and Twitter evolve into the primary vehicles pushing awareness of the latest NFT Collections, buying, coding, and building.

What really opened my eyes was the potential for openness and ownership on web3. It all starts with one of the principal web3 innovations — blockchain technology.

‍

Built on the Block

Think of blockchain as a database that anyone can access, a kind of open bookkeeping ledger system that offers proof of ownership by storing a record that can’t be tampered with once created. New transactions must be added to update or remove a record, and all records are spread across many computers at once, available for all to view everything that has been added to it.

Instead of being owned and operated centrally by a single company, this ledger system is operated by users (miners) around the world collectively. This ledger is open (transparent transactions and data records), trustless (censorship-resistant and immutable without the need to trust anyone else on the network), and permissionless (allowing users to interact with one another without the need for centralized authorities and other third-party intermediaries).

These public blockchains are self-sustaining because they reward the miners with the blockchain’s token for independently validating every transaction in order to add new transactions to the blockchain. A blockchain’s token is a store of value, and also accrues value in the real world. The token can be converted into other cryptocurrencies or to fiat currencies like the U.S. dollar. At times, the token holders are even given voting rights to help guide the future direction of the blockchain.

‍

No Frivolous Time

While this may all seem abstract, the breakout example for blockchain technology is how it’s powering NFTs, or non-fungible tokens. NFTs are an innovative vehicle for transparently buying, owning, and selling digital and physical goods and services. It’s early days for NFTs and their use cases will evolve, but we’re already seeing NFTs across art, music, entertainment, and commerce — with more to come.

There is no denying the attention NFTs are bringing to the world of crypto and blockchains. The current NFT frenzy is helping to make web3 mainstream as more and more people become familiar with these terms and technologies.

The openness and ownership enabled by web3 marks a fundamental paradigm shift from web2, the version of the internet we know today. Web2 puts the control of monetization in the hands of “Big Tech” companies. Big Tech controls how we search for the things we want or are interested in. These companies control where we can buy our goods and services online and have inordinate influence on how much we pay. It’s rare for two individuals to even trade a service for cash without someone in the middle charging a cut to facilitate the transaction. Big tech provides the rails for creators’ content and controls their monetization, taking the majority of profits via advertising dollars and paying creators in fractions of pennies. Big Tech can determine which creators are allowed and which have no place on their platform.

This is quite the opposite of openness and ownership.

Web3 promises a different experience. A world of decentralized apps that run on the blockchain. A world where these apps allow anyone to participate without monetizing their personal data. A world where people can own what they put out into the world. This is the ownership economy. As Chris Dixon of Andreesen Horowitz describes it, “Web3 is the internet owned by the builders and users, orchestrated with tokens”.

I’m now a firm believer.

We can’t meet the future by doing what we’ve done in the past.

And I believe we are at the dawn of the decentralization of every industry.

‍

Decoding Decentralization

One of the biggest challenges of web3 will be defining terms. There’s a whole new set of jargon for folks to wrap their heads around from blockchain and crypto to smart contracts and tokens. Here’s a good web3 glossary to begin to familiarize yourself with these terms.

“Decentralization” is one of the most important concepts. When used in context with web3, decentralization refers to a system that operates without a central entity controlling or acting as the authority and replaces it with a distributed peer-to-peer network.

Decentralization is one of the foundational concepts driving web3. It’s being applied to all sorts of products like decentralized currencies (i.e., “cryptocurrencies” like bitcoin and ethereum), decentralized applications (“dApps”), and decentralized public ledgers (i.e., blockchain). Currencies exist without a state or fiat, applications run without the ownership of Big Tech, public ledgers keep track of all without a central bank.

Where decentralization gets really interesting is when it’s applied to an industry.

The Pandora’s Box of decentralization was first opened up in the finance industry. In fact, most of the headlines around web3 and crypto to date have centered around “decentralized finance” (DeFi for short). DeFi is becoming the umbrella term for the emergence of financial technology based on the blockchain. DeFi enables dApps to remove middlemen like banks, that profit by taking a cut of every step of a transaction.

While still early, DeFi has ignited a revolution in finance with real benefits for consumers, such as eliminating banking fees for holding our money, reducing restrictions for international commerce, and providing more access to capital.

However, DeFi is just the start.

As the web3 wave grows, the ideas of decentralization, openness, and ownership will transform every industry — it’s just a matter of time.

The Dawn of DeEd

So what happens when it’s applied to what I’m most passionate about — education?

As exciting as DeFi may be, I believe the promise and potential of web3 is even greater with decentralized education (let’s call it DeEd).

Just like DeFi, DeEd is an umbrella term for educational services built on the blockchain. Think about the opportunity for kids to learn anything, from anyone, anywhere, at any time. Think about the opportunity for creators to build, curate, and monetize the content they create — all with the goal of helping kids learn.

With DeEd, you will be able to do many of the things that schools and educational institutions support — take a class, explore interest-based learning, find subject-matter experts, get a certification or credential, be a part of a community, buy and/or trade goods and services to advance learning, and more — it’s just much faster and doesn’t require an intermediary.

I believe we will unleash incredible innovation and opportunity in education using web3. DeEd can break boundaries and level the educational playing field for all — regardless of income, race, gender, geography, or status.

I’m so looking forward to bringing Web3 to education.

This is the first in a series of articles on the promise of DeEd.

We welcome your ideas, feedback and suggestions! Feel free to reach out and share them with swp@encantos.co (dot “co”).

‍