5 web3 use cases
Explained in simple words...
In this week’s newsletter: 5 web3 use cases in simple words, fake dog for security, how the US lost the 5G race and many more…
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Essay of the week - 5 web3 use cases
If you've been active on the internet, then you might've come across these questions and complaints about crypto and web3
"After 13 years, there are still no use cases for crypto",
"Web3 is all FOMO and doesn't really have any tangible use cases"
I wanted to address these questions and give my perspective on how I look at web3.
If I can list down my top 5 use cases in a single tweet, then it'll look something like this 👇
Decentralised Finance
Decentralised Storage
Privacy
Decentralised Internet
DAOs
I know the word "Decentralisation" is being thrown around everywhere. I want to share the goal behind it and why it's important.
To explain what I'm about to share, we have to understand this quote first 👇
"The men who can manage men manage the men who can manage only things, and the men who can manage money manage them all" - Lessons of History
For centuries, money has been managed by banks.
But in 2008 something happened that changed the world.
One of the biggest and oldest investment banks in the world (Lehman brothers) collapsed.
The world went into a recession. The global financial crisis started.
Someone or a group of people got fed up with the financial structure and ended up creating Bitcoin.
I call that moment - "The decentralised hope"
We never really own our own money. The banks do. They decide how much we can transact and how much will it cost.
Something that happened in Canada - Feb 2022👇
Back to 2008, Bitcoin came and started the DeFi revolution.
Now you own your money. You can decide how much you want to transact.
You also own where you store your money, with no middlemen. You can also decide where to invest and stack that money.
The backbone of crypto is blockchain.
Blockchain is not a database. It's a place where you can document something without a third party involved.
And to build a decentralised world, it needs an infrastructure that's not handled by a third party.
I hope I answered the question "Why decentralisation is important?"
I also believe that the world will never be completely decentralised but that conversation is for some other day.
Let's talk about the 5 use cases I promised:
1. Decentralised Finance.
Continuing the conversation above, DeFi has not just cut out middlemen but also fasten the entire process.
Let's take a scenario.
It's 2007, James is 15 years old and living in Malaysia with his mother.
His father works from the US and sends $300 every month as a remittance.
The banks in the US take 5 working days to process the payment and takes about 5% as a transaction fee.
James's mother gets only $270 in her bank account because 5% more was deducted for the conversion fee.
This is happening even today.
Here's the current scenario.
James is 30 years old. He works from the US, father has shifted back to Malaysia.
James sends the same $300 as USDC. Parents receive it within minutes and the transactional cost 0.01%
That's the power of DeFi.
Remittance is just one example. DeFi has many.
The problem is education. Most people don't know how to use DeFi.
Few DeFi uses cases:
P2P lending.
Global borrowing.
Investing in international projects.
Anonymous identities.
It's almost like if you can decentralise finance, you can decentralise anything.
Because "men who can manage money, manage them all"
and now more people be a part of that circle, who wants to manage money and not just a bunch of governments and banks.
2. Decentralised Storage:
Even though it's much cheaper to use centralised storage, I believe in the vision of a Decentralised one.
Today, almost everything lives on centralised storage. Lots of lives depend on them. Businesses, influencers, personal information, etc.
There is a good possibility that they are probably in AWS, Google Cloud and Facebook servers.
Imagine, one day they just switch it all off. What if they pull the plug?
I mean they won't but don't you think we are relying too much on just a few bunches of people with monopolies?
Few decentralised storage platforms:
Filecoin which runs on top of IPFS.
Livepeer - Decentralised video streaming network.
Mirror, Wordcel, BlogChain are platforms for writers. Read more about them here - Decentralised Essays
3. Privacy
Technology like ZK and non-custodial wallets will allow us to live without revealing information.
The simplest way to explain ZK in a single tweet
Watch this video to understand ZK proofs better.
You can be completely anonymous and run
4. Decentralised Internet
One of the most common use cases that everyone talks about is Helium. A decentralised internet network.
Usually, the Internet is provided by monopolies or duopolies.
In India, they are Airtel and Jio.
But helium is completely people-owned.
Helium is definitely not perfect and very few people are actually using it.
Liron put out an interesting thread and as a neutral in this space, I don't know what to make of it.
here's how helium's founder replied to it.
but some things take time. I would definitely keep an eye on Helium.
5. DAOs
Decentralised Autonomous Organisations.
All the big companies are owned and handled by a few sets of people. All the major decisions are taken by them as well.
But in a DAO proposals are proposed and the members who hold the coin or the NFT can decide what is that they want. Plus it can be completely anonymous.
The best way to learn about DAOs is by joining and contributing to them.
Here are a few DAOs I suggest joining:
Cult DAO
Bankless DAO
DeveloperDAO
I'd also suggest buying a few NFTs and joining their private channels on Discord.
DAOs are still in very early stages and now is the time to join and grow with them.
That's it, folks.
These are a few of my current use cases of web3. I will write more on the topic as more interesting things happen in this space.
Before I let you go, I just want to share that the biggest use case of web3 is decentralization.
We've never lived in a world where there are no middlemen and monopolies. We've always been dependent on someone else.
Web3 is the getaway to own a piece of the internet.
Thank you for reading.
If you have any questions, leave a comment or reply personally to me. Would love to have a conversation on this topic.
You can also read something similar I had written few ago…
Prado out
10 Interesting things for you 🙌
1. Seven megatrends that will shape the next 20 years (Blog)
2. Something from my Twitter👇
3. Fake dog for home security (Interesting hack)
4. Why Solana is more decentralised than we think (Blog)
5. Interesting Human of the week:- The US might have been a leader in 5G had it been easier for one immigrant to stay in the country - Tanay Jaipuria
6. Question of the week:-
7. Picture of the week:- Most people will skip big quotes, but we are not most people are we?
8. Current read: Reading lots of blogs and newsletters on Web3, couldn’t read any book this week :(
9. Meme of the week:- LinkedIn is Cringe :)
P.S: I did my first paid ad on LI this week. I don’t know how it got 4k+ impressions. I only have 1.5k followers :)))
The company that paid probably hyped it up somewhere.
10. Quote of the week:
"Silence is a source of great strength"- Lao Tzu
(Tweet this quote)“People become risk-seeking when all their options are bad.” —Daniel Kahneman
(Tweet this quote)"The cost of living is going up and the chance of living is going down." — Flip Wilson
(Tweet this quote)
Sugarcube to a friend 🙌
I want to thank my friend Arvid Kahl for writing some amazing newsletters every week.
Big fan of his work and read both his books ❤️ I know him since the end of 2020 and he is one of the most humble people I know on the internet 🙌
Check his newsletter out - The Bootstrapped Founder
Subscribe and tell him Prado sent you. Let’s give him a surprise.
Check out some previous newsletters:
Diderot Effect (Read)
Life’s lines of Closeness (Read)
Cathedral Thinkers (Read)
Join in if you want me to trigger your curiosity every week👇
Personal Announcement 🚨
Next week I’ll be heading to the Polygon fellowship organised by Devfolio.
9 days in a villa where fellows will be learning interesting things and building simultaneously.
I’m the chief storyteller and I’ll be documenting the entire hacker house. It’s going to be really amazing.
You can follow the journey here
Enjoy your weekend. Cheers.
In This Together,
Prado
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