How is the Web3 useful to humanity? We constantly here about all the buzz words around web 3 and how it is a revolution but why is it so praised by tech enthusiasts? What impact can it have on your live, yes, I’m talking about you listening to this.

Well, this is what we will find out today. Listen very well cause I’m sure you’ll see web3, the blockchain and all the like differently after listening to this.

Stick till the end to know which companies are leveraging the web3 to build the future today.

This article is also available on my podcast (In French), as an Episode. You can listen to it directly on Spotify, Apple Podcast, Google Podcast etc.

How The Web3 is useful to you and me?

Imagine a world where you could lend money to someone located on the other side of the world, someone you’ve never seen before, someone you don’t trust yet you’re 100% guaranteed you’ll get your money back or an equivalent collateral.

Imagine you had social media platforms where you owned your data entirely, and no one could sell it or ban you just by clicking a mouse.

Imagine a world where you could sell items (Your used car, your phone, etc.) to someone you don’t know and don’t trust without any third party like eBay or amazon, and without the fear of being scammed.

If you are a musician or an artist, imagine that you could ensure the authenticity of your work, and avoid illegal replication, and reselling of counterfeits.

This isn’t fiction anymore all the examples I listed above are possible thanks to Web3. You see, the web3 isn’t simply a new iteration of the web as we know it today. It isn’t simply about bitcoin, alt coins, and pixels being sold for millions of dollars. It goes far beyond that. The web 3 has applications that could be found in the real world, blending our reality as we know it with self-enforcing contracts made in the digital world.

I’m sure you’re asking yourself How is all this possible? Don’t worry. Before going further with my explanation of how the web3 can be useful to you and me, I must answer this question first. All the examples above are possible thanks to two pieces of software known as “smart contracts and NFTs”.

What is an NFT?

NFT stands for non-Fungible token. As mentioned on the Ethereum website, NFTs are special tokens that can be used to represent ownership of unique items. NFTs let us tokenize real world items on the blockchain. These includes arts, real estate etc…. The special thing about NFTs is that no one can modify the ownership of an NFT if it is yours, then it is yours.

What is a smart contract?

A smart contract is a self-enforcing agreement, whose terms are established and executed as code that runs on the blockchain. This is basically a piece of software, and the agreements found in this contract are enforced by a consensus mechanism that runs on the blockchain. Since this consensus is made by nodes on the blockchain, you can’t tamper with the rules in a contract once it is established.

So, right now I’m sure you’re starting to get it. This piece of software has the power to take instructions and enforce them in an impartial manner without any central entity. But how does it interact with the real world? This software is only available on the blockchain. How does it blend into our lives to ensure that real world transactions are made in accordance with the laws enforced in the virtual world (that is the blockchain)? well, it does so thanks to what we call Oracles.

This leads us to the question:

What is an Oracle?

Smart contracts can be invoked from within the block chain, and out of the block chain (that is, off chain) the entities that invoke smart contracts from outside the blockchain are called “Oracles”.

Oracles can be software or hardware entities. There are basically two main types of oracles (though you might find some more over the internet, I will only mention two types for brevity).

Inbound Oracles: Entities that interact with smart contracts from the external world (The real world we live in) into the blockchain.

Outbound Oracles: Entities that provide smart contracts with the ability to interact with the external world.

To make this simple, let’s say you and I make a bet on the score of a football match, and we code a smart contract with the rules of the bet that is, who ever wins will have to send cryptocurrency from his account to the other. Once the match is over, the inbound oracle will send information to the smart contract that the match is over, and the score of the match. The smart contract will then send the tokens to the winner and tell an outbound oracle to notify both of us on our phones that the transaction is completed.

Potential Real-world applications of web 3

With all what we’ve been talking about, you must start thinking about potential use cases.

The sharing economy could be more secured, with smart contracts enforcing agreements between peers, and facilitating payments between them.

My Favorite example is that of buying a car on the web2 vs web3. It is an example highlighted in one of my favorite web3 books (Token Economy) links in references.

Let’s say Alice wants to buy Bob’s car. In today’s web2 world, Alice will

Go to the internet, to find a platform where second had stuff are sold (like eBay or Leboncoin)
Bob on the other side goes to the same website and posts his car for sale with the terms and conditions of selling his car.
Alice finds Bob’s car and likes it
She talks to Bob to coordinate how the exchange will take place.
Alice pays an amount about 10000$ for the car to the platform
In addition to the platform, to really attest Bob’s ownership of the car, another entity like Insurance company and the vehicle registration authority might be involved in the sales process
Alice gets the car’s documents; she agrees to send the payout to Bob and sign ownership documents
Bob transfers the car and the required documents to Alice.
The platform takes a fee on the money, and sends the rest to Bob
Alice gets the car and every document

Now, if Bob and Alice where in the web3 here is how the car sale would have been done.

Bob wants to sell his car; he identifies himself with his blockchain address and uses a smart contract to set the terms of sales of the car
The terms in the smart contract might be
- If 10K$ worth of cryptocurrency arrives at my blockchain address, transfer my car’s owner ship to the address, and grant access to the car’s smart lock to that address
Bob the leaves his car and the keys in a garage locked with a smart lock that can be controlled by a smart contract.
Alice wants to buy a car; she goes to the internet on a Web3 website this time where the car is listed for sale.
She likes Bob’s car and clicks the buy button by doing so, she signs the contract with her private key and transfers 10K$
- When she clicks this button, the smart contract is verified by the nodes on the blockchain to check if Bob is the real owner of the car, if Alice has enough funds to buy the car too.
When the verification is passed, the blockchain network registers Alice as the new car owner and their crypto balances are updated.
The smart lock calls an oracle to grant garage’s smart lock’s access is to Alice, and she can now get the car
If a thief steals away the car from Alice, anyone can inspect the blockchain and verify who is the real owner of the car.

See how the third party’s role is limited to verify ownership and ensure a smooth transaction between two people who do not trust each other? No insurance company, nor car registration institution. The website listing the car didn’t touch the transaction money, since it is a web3 website running on the blockchain.

This example can seem far fetched today, but the foundation for building these types of technology is being laid and we can already see companies building the future today. Experts say the web3 is still in its infancy. If you are skeptical about this, remember what people thought about cars in the beginning.

Companies Applying Web3 to our world

Several companies have been taking advantage of the Web3 already, raising billions of dollars and making a lot of money. Not all have been successful though, but most are disruptive. Here are a few examples of companies.

Tera0 https://terra0.org/

They brought the concept of self-managing forests. They use a smart contract on the Ethereum blockchain to manage the logging and selling of trees from a forest in Germany. They do this by using drones and satellites to monitor the growth of the forest and depending on the state of the forest, trigger events in the smart contract to permit the logging of trees and selling of wood.

Block Bar (https://blockbar.com/)

The world’s first direct to consumer NFT marketplace for wines and spirits. Bottles are uniquely tied to NFTs on the blockchain giving them a kind of unique identity. Each NFT comes from a luxury brand and is tied to a real-world physical bottle.

Tangible https://www.tangible.store/

This company converts real world assets into NFTs. They can convert gold, real estate and other assets to blockchain NFTs, and assign ownership to the owners of these assets. And these assets could be sold later, and ownership switched.

Starton https://www.starton.io/

This company builds an API to make it easy to make and deploy smart contracts on the blockchain, interact with these smart contracts and watch events they produce. What they do is very technical, but I really love it. I can already see how impactful this startup is going to be in the future.

Conclusion

What do you think of Web3 and all its goodies? Did I succeed in changing your mind? or making you more excited about what the future has for us? If you loved it, don’t forget to subscribe, and follow me on social media for more content like this.