Web 3: A platform for decentralized apps¶
Many have come to believe that an open, trustless blockchain platform like Ethereum is perfectly suited to serve as the shared “back end” to a decentralized, secure internet - Web 3.0. An internet where core services like DNS and digital identity are decentralized, and where individuals can engage in economic interactions with each other.
As intended by the Ethereum developers, Ethereum is a blank canvas and you have the freedom to build whatever you want with it. The Ethereum protocol is meant to be generalized so that the core features can be combined in arbitrary ways. Ideally, dapp projects on Ethereum will leverage the Ethereum blockchain to build solutions that rely on decentralized consensus to provide new products and services that were not previously possible.
Ethereum is perhaps best described as an ecosystem: the core protocol is supported by various pieces of infrastructure, code, and community that together make up the Ethereum project. Ethereum can also be understood by looking at the projects that use Ethereum. Already, there are a number of high-profile projects built on Ethereum such as Augur, Digix, Maker, and many more (see Dapps). In addition, there are development teams that build open source components that anyone can use. While each of these organizations are separate from the Ethereum Foundation and have their own goals, they undoubtedly benefit the overall Ethereum ecosystem.
- Vitalik Buterin - TNABC 2015: https://www.youtube.com/watch?v=Fjhe0MVRHO4
- Gavin Wood - DEVCON 1 - Ethereum for Dummies: https://www.youtube.com/watch?v=U_LK0t_qaPo
- Ethereum London Meetup (best detailed here): https://www.youtube.com/watch?v=GJGIeSCgskc
Would you enter in a contract with someone you’ve never met? Would you agree to lend money to some farmer in Ethiopia? Would you become an investor in a minority-run newspaper in a war zone? Would you go to the hassle of writing up a legal binding contract for a $5 dollar purchase over the internet?
The answer is no for most of these questions, the reason being that a contract requires a large infrastructure: sometimes you need a working trust relationship between the two parties, sometimes you rely on a working legal system, police force and lawyer costs.
In Ethereum you don’t need any of that: if all the requisites to the contract can be put in the blockchain then they will, in a trustless environment for almost no cost.
Instead of thinking of moving your current contracts to the blockchain, think of all the thousand little contracts that you would never agree to simply because they weren’t economically feasible or there was not enough legal protection..
Here is just one example: imagine you own a small business with your friends. Lawyers and accountants are expensive, and trusting a single partner to oversee the books can be a source of tension (even an opportunity for fraud). Complying strictly with a system in which more than one partner oversees the books can be trying and is subject to fraud whenever the protocol isn’t followed exactly.
Using a smart contract, ownership in your company and terms for the disbursal of funds can be specified at the outset. The smart contract can be written such that it is only changeable given the approval of a majority of owners. Smart contracts like these will likely be available as open source software, so you won’t even need to hire your own programmer instead of an accountant/lawyer.
A smart contract like this scales instantly. A couple of teenagers can split revenue from a lemonade stand just as transparently as a sovereign wealth fund can disburse funds to the hundred million citizens who are entitled to it. In both cases the price of this transparency is likely to be fractions of a penny per dollar.