Ordinary people do not have to go 'All In Web3', but it is necessary to learn and understand Web3. To help everyone better enter the Web3 field, today I want to share a beginner's guide to Web3.0, enabling ordinary people to quickly get started with Web3.
1. What is Web3? Understanding the basic concepts and terminology of Web3 to establish initial recognition.
1. What is Web3?
The term Web3 was coined by Gavin Wood, one of the co-founders of the Ethereum cryptocurrency, in 2014. Since then, it has become an all-encompassing term for anything related to the next generation of the internet, namely the 'decentralized digital infrastructure.'
To clarify Web3, we need to first look at Web1 and Web2. This image has previously circulated widely on the internet and summarizes the concepts clearly.
Web1.0: Web pages are 'read-only'; users can only search for information and cannot interact. Web1 information is distributed unilaterally from issuers to users. Who are the issuers? Traditional media, portals, etc.; users just watch, which is no different from reading newspapers or watching TV.
Web2.0: This refers to the 'read-write' web, where users are not limited to browsing; they can also create content and upload it to the web. Well-known platforms like WeChat, Douyin, and Google belong to the Web2 era. Most internet companies of Web2 provide free services to accumulate users, but the data of users belongs to the platform, which is the most valuable asset of Web2. But why is this asset, which is clearly generated by users, given to the platform?
Web3.0: Refers to the formation of a large interconnected network that can read, write, interact, and own. The biggest change from Web2 is in 'control.' Web3 returns data value to users; in the Web3 era, you can log into various applications with a wallet. Theoretically, the user's wallet belongs only to them and not to any company or organization. The user controls their account, data information, assets, etc., as long as the wallet's private key is intact, no one can forcibly take away the user's assets.
Therefore, regarding Web3, we can say: Web3 breaks the trust in centralized platforms or institutions, with the core being that users own their information property rights on the internet. From the moment information is produced by the user, it is certified to the user, representing the owner's economy.
2. Does Web3 equal trading coins and NFTs?
Many people have this impression mainly because some Web3.0 applications are closely related to cryptocurrencies, but in reality, Web3.0 is not just about cryptocurrencies; it involves the practical application of related technologies. It represents a new internet architecture where user data sovereignty is restored, achieving interconnectivity of applications.
Thus, at this point, the Web3.0 internet is akin to the early stages of Web1 and Web2 development over 20 years ago, where the proportion of those truly participating in Web3 from traditional industries is very low, with few competitors. At this moment, participating in Web3 presents a new opportunity, with many chances, providing entrepreneurs with a chance to break traditional monopolies and achieve a competitive edge.
3. Basic concepts and terminology of the Web3 industry.
Due to the many specialized terms in the Web3 space, these terms are generally difficult for newcomers to understand, so here are some basic Web3 terms listed for better learning and entry.
Blockchain: A digital decentralized ledger composed of data blocks (also known as a distributed ledger) used to store information related to transactions or information sent over the network.
Public Chain: A public blockchain is an open, decentralized blockchain network. It allows anyone to join and participate in the network and enables everyone to view and verify transactions on the network. Public chains operate without centralized control and ensure network security and reliability through consensus mechanisms.
GameFi: Referring to Game Finance, it gamifies DeFi rules and NFT-izes game item derivatives, providing players with a new financial gaming experience. In GameFi, players' assets become equipment or tools in DeFi games, allowing them to earn returns or rewards through participation.
Decentralized Social: An online environment built on blockchain technology where users can connect, share ideas, and tell stories. These platforms do not need to link to real-life identities, allowing users to create profiles using wallets, enhancing privacy protection.
L1/Layer 1: Layer 1 is the base blockchain or on-chain network. Layer 1 serves as the ecosystem of the blockchain network, meaning they can process and complete transactions within their blockchain ecosystem. Examples include Bitcoin (BTC), Ethereum (ETH), and Solana (SOL).
L2/Layer 2: Layer 2, also known as off-chain networks built on existing blockchains, aims to enhance efficiency and scalability. Some transaction loads are moved to Layer 2 to adjust the architecture of existing blockchains. Examples include Polygon on Ethereum (ETH) and the Lightning Network on Bitcoin (BTC) functioning as Layer 2.
Wallet: An application installed on a computer or smartphone used to store public or private keys for crypto asset transactions, NFTs, and digital signatures.
Private Key: The private key consists of a string of letters and numbers and should be kept secure, as it serves as the password to unlock the crypto wallet.
Public Key: The public key is the address of the crypto asset wallet. With the address, crypto assets can only be sent to that person. No one can withdraw or log into that person's account.
Hot Wallet: It is a form of digital storage that can be accessed via computer or mobile phone. Hot wallets are usually free but are susceptible to hacking.
Cold Wallet: It is a form of cold storage similar to a physical device (mainly USB drives) that keeps crypto assets completely offline. Since it is not connected to the internet, it cannot be attacked.
Gas: A pricing mechanism in blockchain protocols used to calculate the cost of operations and transaction fees for smart contracts.
DApps - Decentralized Applications: Applications that autonomously run on blockchain technology using smart contracts.
DAO - Decentralized Autonomous Organization: A group controlled by its members, where the operations and decisions of the DAO are determined by consensus algorithms and votes from community members, without a centralized authority.
DeFi - Decentralized Finance: By using smart contracts on a public blockchain, it enables peer-to-peer financial services without relying on intermediaries such as exchanges or banks.
TVL - Total Value Locked: Total Value Locked (TVL) measures the total assets locked in decentralized finance (DeFi) protocols, including all tokens and functions such as borrowing, staking, and liquidity pools.
PoS - Proof of Stake: Proof of Stake (PoS) is a consensus mechanism that selects participants known as validators. Validators need to stake cryptocurrency assets to have the opportunity to validate blocks and earn rewards.
PoW - Proof of Work: To validate blocks on the blockchain, complex mathematical equations need to be solved, which requires high computational power achieved through physical devices such as computers.
Token Economics: Token economics refers to the economic design and structure of a cryptocurrency or token ecosystem. It includes factors such as token supply, distribution, utility, governance mechanisms, and incentives.
Ethereum/ETH: Proposed by Vitalik Buterin at the end of 2013 and crowdfunded in 2014. One of the important digital assets of Web3.
Bitcoin/BTC: Bitcoin is the first cryptocurrency and the most important cryptocurrency in Web3. It was invented by Satoshi Nakamoto in 2008.
ICO: Typically used as a fundraising activity for new projects. Participants in an ICO receive a certain number of tokens in return.
Stablecoin: A stablecoin is a type of cryptocurrency that aims to minimize volatility. The primary purpose of stablecoins is to provide a more suitable option for common transactions, usually pegged to the US dollar or gold.
Altcoin: Refers to cryptocurrencies other than Bitcoin. Be aware that while many altcoins offer potential investment opportunities, they are high-risk.
White Paper: A detailed document outlining the concept, technology, goals, and implementation plans of a crypto project. It provides an in-depth analysis of the project's vision, technical specifications, token economics, and potential impacts, offering comprehensive guidance.
Yellow Paper: Similar to a white paper, a yellow paper is a technical document that typically delves into the underlying protocols, algorithms, and technical complexities of a project, providing detailed explanations and specifications for developers and researchers.
Second, proficiently use various tools essential for Web3.
Essential tools for beginners in Web3, categorized into four major types: Social, Data, Wallet, and Information, as well as Centralized Exchanges and DEX.
Social Category:
1. Discord: Abbreviated as 'DC', it is a platform dedicated to community services, where major Web3 projects also establish groups to share industry information and deepen the maintenance of the Web3 community.
2. Twitter/X: The base for Web3 people, also one of the main traffic entry points for Web3. Almost every Web3 person has a Twitter ID, which is also the main battlefield for Web3 project promotion, allowing for quick access to project information.
3. Telegram: Compared to similar private social apps, TG features high privacy, cross-platform support, and is free and open-source. It is also commonly used by some old Web3 OGs as a community tool.
4. Gmail: Used as an email for web3 certification platforms, it is basically the industry default supported email domain.
Web3 Wallet Category
1. MetaMask: Also known as the 'little fox wallet', it is a browser extension wallet that does not require you to download and install a client to connect directly to the website's chain. It is not limited to a single device or platform, and users can access the wallet from different devices by importing it using a mnemonic phrase.
2. Coinbase: Often regarded as one of the safer hot wallets in the current industry. It's also a popular wallet among users in North America and has been listed on NASDAQ; it is trustworthy and has never been hacked.
3. OKX: Offers a variety of functions, supports many mainstream chains, is convenient and quick, suitable for beginners, and has relatively good security.
It is recommended to use Metamask and OKX Web3 wallet; Metamask, known as the little fox wallet, is the largest on-chain wallet, while the OKX Web3 wallet is built into the OKX APP and is the most user-friendly software wallet I have used.
Data Category
1. Non-small number: A well-established blockchain data analytics platform in China, an essential tool for industry insiders. It gathers global digital asset resources and provides real-time market data and multi-dimensional platform data analysis.
2. CoinMarketCap: Also known as CMC, it is a well-known overseas blockchain data service platform that provides users with timely global blockchain information, with all data displayed in detail, and also pushes market trend information daily.
Mainstream Exchanges:
1. Binance: A globally leading cryptocurrency exchange known for having the most users. 2. OKX: Another mainstream trading platform. DEX category:
1. 1inch: This is a decentralized aggregation DEX that enables low-slippage fast trading, easily finding the optimal price.
2. Uniswap: As one of the largest DEXs, Uniswap provides deep on-chain liquidity, facilitating your trading needs.
Third, some reference advice for newcomers to Web3. In this field, do not be influenced by money-making myths; it is important to understand that stories of losing and losing money are significant components of this field, at least for now. Therefore, for newcomers, it is crucial to keep these opinions in mind and always remember them.
1. Do not trust anyone: Many newcomers enter this field without sufficient understanding and can easily fall victim to scams. There are many fraudulent projects in this circle, so maintain a skeptical attitude towards those who share information with you. Additionally, there are often various 'airdrop links' and many phishing links that resemble official links for popular projects; carefully distinguish them, and do not easily authorize the wallet or leak some information.
2. Find high-quality Web3 circles: The threshold for Web3 is low, but currently, there is no systematic learning path. Although there are many courses, the quality varies greatly, and it is easy to mix fake knowledge with genuine learning. If there are false links or behaviors mixed in with real and effective information, a large number of novice users can easily be deceived. Finding high-quality circles can help acquire knowledge beyond previous understanding, and its efficiency will be much higher than studying alone.
3. Engage more in areas you are good at: The entire Web3 space involves many subfields such as DID, GameFi, PFP, DAO, etc., making it difficult to study every field thoroughly. The speed of hot topic shifts in Web3 is very fast, but for unfamiliar areas, it is essential to manage your capital allocation while chasing trends; remember not to go All In. Similarly, for familiar fields, we can allocate more funds.
4. If asset leakage accidentally occurs, discard the wallet immediately: Once there is any asset leakage from the wallet, it should be discarded immediately without any sense of luck. The underlying reason for wallet asset leakage is usually the leakage of the private key or mnemonic phrase at some point, which could have happened months ago, but the hacker might only remember to withdraw the assets months later. Therefore, once any signs of trouble are detected, do not have any sense of luck; the top priority is to prepare a new wallet as quickly as possible and transfer all assets.
5. Avoid storing your wallet information on the internet: Try not to keep your private key, mnemonic phrase, or other sensitive information on internet-connected mobile devices. Use handwritten notes or backups on offline phones (less commonly used devices) to mitigate potential risks. If possible, avoid connecting your computer and mobile devices to public Wi-Fi.
6. Stay away from contract trading: Contracts are relatively high-risk and can easily become addictive; it is not recommended for novices without a mature trading system to participate, as it can easily lead to significant losses. For newcomers, participating in spot trading and the primary market is an effective way to increase capital.
7. Be patient and manage risks: For most projects, your investment may go to zero, which is normal. A few projects may allow you to break even or make a small profit, helping you recover a bit, but overall it will still be a loss. However, there will always be some projects where luck helps you achieve returns of dozens or even hundreds of times. Therefore, keep patience and wait for opportunities; do not go ALL IN.
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