Written on December 30, 2024.
Three million years ago, at the beginning of the Paleolithic period, Homo sapiens made the earliest stone tools, which they then used to hunt animals and cut meat for burning.
Twenty thousand years ago, at the beginning of the Middle Stone Age, in addition to the more diverse stone tools made by humans to capture prey, stone carvings and stone ornaments began to appear to meet the spiritual needs of users.
Fourteen thousand years ago, in the Neolithic Age, represented by polished stone tools, humans learned to sow plant fruits and raise wild animals in captivity, thus giving rise to farming and animal husbandry, which is known as the "first agricultural revolution."
Ten thousand years ago, humans learned to make bronze tools such as bronze hoes, thus beginning to settle and cultivate, known as the 'Second Agricultural Revolution.'
Five thousand years ago, humans learned to make iron plows and used domesticated cattle as a power source for farming, while employing irrigation technology to increase yields, known as the 'Third Agricultural Revolution.' These three prolonged 'agricultural revolutions' now seem commonplace.
Tracing the timeline back nine centuries to the 12th century, Europe began the 'Enclosure Movement,' a brutal yet productive 'cannibalistic' movement that continued until the 19th century. As humans began to venture into maritime endeavors, exploring new land spaces, the highest market value company in history, the East India Company, was born. The three major industries of marine, textile, and sheep farming formed the backdrop of the 'Enclosure Movement': nobles drove away tenant farmers, demolished their homes, and used the land to earn more sheep money. With land concentration, larger and more intensive farms and ranches were formed. A large number of displaced farmers flooded into cities, providing cheap labor for the first industrial revolution between 1830-1840.
Indeed, the first financial revolution occurred on the eve of the first industrial revolution in Europe. The so-called 'financial revolution' has largely been overlooked today, but its impact may be greater than the industrial revolution itself. The Amsterdam Stock Exchange was established in 1602, the Bank of England, the first central bank, was established in 1694, the London Stock Exchange was established in 1773, and the New York Stock Exchange was established in 1792. Since then, financial products such as stocks, bonds, foreign exchange, and commodities have become commonplace. The first financial revolution provided the capital fuel for the three industrial revolutions that followed over the next 500 years, making technological research and large-scale industrial production possible. Finance nurtures technology and promotes further transformation of the economic society. Today, human society has once again reached a shining moment of integration between technology and finance known as FinTech.
Humans took 3 million years to transition from the Stone Age to the Agricultural Age, 14,000 years to move from the Agricultural Age to the Industrial Age, and only 500 years to enter the Digital Age from the Industrial Age. In these 500 years, although stocks, bonds, exchanges, and corporate practices have continually innovated, they are merely new wine in old bottles until the emergence of cryptocurrencies represented by Bitcoin in 2009. From then on, the four major financial assets—stocks, bonds, currency, and commodities—encountered an unprecedented asset class: programmable assets, commonly known as 'money.' The blockchain is like a golden horned beast that fell to Earth from outer space, while cryptocurrency is like the golden horn on the beast's head that shocked traditional financial markets in what later became known as the 'second financial revolution.'
The economic value created by 14,000 years of agriculture far exceeds that created in 3 million years of the Stone Age; the economic value generated in 500 years of the Industrial Age far surpasses that of 14,000 years of agriculture. The economic value created in nearly 60 years of the digital age is also much higher than that produced in nearly 300 years of the Industrial Age. Humanity is in the early stages of a technological explosion, with the continuous emergence of programmable tools worldwide being a core feature of this explosion. From stone tools to plows, and then to programmable tools, the entire process took 3 million years. The starting point of all digital processes originates from the birth of the 'computer.'
The emergence of integrated circuit computers in 1964 marked the entry of humanity into the digital age, providing a physical foundation for large-scale programming. The first characteristic of the digital age is the programmability of tools. With the help of such programmable tools, humanity has far surpassed ancient humans and primates in transforming the physical world, profoundly changing the industrial landscape in various fields.
The platform architecture of the digital age is divided into front-end and back-end. The back-end includes back-end devices and networks, while the front-end includes front-end devices and user interactions. Back-end devices include chips, operating systems, servers, data centers, and communication networks. From the single-machine and local area network era of Web0 to Web1, Web2, and now Web3, this is the development of the internet. Front-end devices include computers, smartphones, smartwatches, glasses, headphones, vehicle systems, and smart furniture; user interactions include graphics, voice, video, spatial imagery, and brain-machine interfaces.
From the front-end perspective, the main difference between Web3 and Web2 is that Web3 users have more data sovereignty. Why can Web3 make ownership decisions while Web2 cannot? An important technology is verifiability at the time of data generation. From the back-end perspective, a significant feature of Web2 is the emergence of cloud computing, while Web3 is characterized by the emergence of blockchain. The cloud represents centralized production output, while blockchain signifies decentralized production supply.
User data in Web2 is typically stored on central servers, which may have multiple backups, but these servers are managed by a single provider. While providers can prove ownership, data ownership entirely belongs to these centralized entities due to the blockchain allowing for ownership of these assets and data. At the entry point, the blockchain generates verifiable time series to establish ownership at a consensus level.
However, the development of new things is never smooth sailing, as there will always be those who exploit new things for evil and engage in illegal activities. As the core product of the second financial revolution, programmable financial products have, under the pressure of past governments and traditional sectors, become generalized as 'currency' and 'virtual currency,' with 'currency' becoming a term to be avoided. The blockchain, as the core of the Web3 back-end, has also had its ups and downs in its development path, with some being forced to shut down projects and others choosing to cross oceans to become digital nomads.
Faced with unprecedented phenomena, humans are a thinking reed. In the past 500 years of the industrial age, new inventions such as steam trains, automobiles, and airplanes caused significant panic when they first appeared, but as ordinary people began to use them, the panic dissipated. Blockchain and digital currency will inevitably go through this stage. After all, even great thinkers like Pythagoras, Plato, Aristotle, and Ptolemy once fantasized about the Earth being the center of the universe, and even thought the Earth was the center of ordinary people.
Web3 is not purely technology-driven; it is also accompanied by the second financial revolution. Therefore, Web3's role in driving the economic society is not singular but operates through the overlay of programmable financial products known as Crypto, or cryptocurrencies. Programmable financial products are not monsters, nor are they stablecoins. Programmable financial products have never appeared in the past 500 years of the industrial age, but they will inevitably emerge at certain stages of digital finance development. Governments around the world clearly have not yet adapted to this new phenomenon and are still in a stage of surprise, confusion, learning, understanding, pondering, and testing.
But there are always those who seize the opportunity presented by technological and financial changes early on. Typical cases include Aptos and Sui founded by Meta (Facebook); Qualcomm founded Solana; and investment institutions represented by Sequoia Capital and a16z have invested $57.3 billion in Web3 since 2021; graduates from top global universities are also joining the 'Enclosure Movement.' According to statistics from Rootdata, based on a database of Web3 projects created by alumni from Harvard University, Stanford University, UC Berkeley, MIT, Tsinghua University, Peking University, and Zhejiang University.
Among all the projects that received financing, the United States has 386, accounting for 35.12%; China has 109, accounting for 9.92%; Singapore has 105, accounting for 9.55%; India has 68, accounting for 6.19%; the United Kingdom has 62, accounting for 5.64%; South Korea has 35, accounting for 3.19%; Canada has 34, accounting for 3.09%; France has 34, accounting for 3.09%; and Vietnam has 26, accounting for 2.37%. The difficulty of obtaining investment for projects in China is much higher than that for projects in the United States, and the voice of Chinese Web3 capital is far lower than that of American Web3 capital.
When it comes to Web3 policies, the dynamics between China and the United States are the most critical. On February 20, 2023, the Hong Kong Securities and Futures Commission released a consultation document on cryptocurrency trading, marking the Hong Kong government’s opening up of the cryptocurrency trading sector under central government tacit approval. Does this mean that China may regain its dominant position in Web3 in the next decade?
Regardless, Web3 has 250 million users globally, with its penetration extending from finance to gaming, social networking, content creation, communication, travel, healthcare, education, shopping, supply chain, manufacturing, finance, marketing, and corporate governance. At the current pace of territorial competition, Web3 may reach 1 billion users globally in less than five years and cover 60% of the global population within ten years. In other words, Web3 could consume the entire globe in just over a decade. By then, the world will undergo earth-shattering changes in a generation.
#Web3 #cryptocurrency
