🤦♀️ Wait.. if Web5 is here, where did Web4 go?!
In today's newsletter, we cover web5 and DCA (Dollar Cost Averaging)
gm degens 🙏
“Gamblers often chase their losses. They bet more money trying to get back their losses and it's more likely, they're just going to end up losing even more.”.
- no idea about the author, unknown
We’ve started today’s newsletter with this powerful quote for gamblers/degens (i.e. ourselves). I have seen so many cases at this point where everyone talks about DCA (dollar cost averaging) and similar concepts where they trying to bring down their average cost, thinking that market will be recovering soon.
I am at fault personally myself as well, as so far we have lost around $20k using the very same concept, except that this money has been invested in stocks and not in crypto (although there is a high correlation between crypto market and tech sector, especially for the companies I bought their stocks are heavily involved in the crypto space).
While DCA is widely used method, it works perfectly fine for those who want to have less risk exposure to specific tokens/stocks, except that this works in market conditions which are more stable and not in situations like this where market is extremely volatile which also has plummeted in the last couple of months.
Of course, this is not a financial advice. My only suggestion is that, before you decide to DCA a particular position on a specific token or stocks, make sure you are super bullish on that and you are thinking about long term potential as it might not work as expected in short run.
Btw, if you are still not sure what DCA is, there is this chart from Simplecryptoguide which explains it pretty well.
🤦♀️ Wait.. if Web5 is here, where did Web4 go?!
Okay, enough of chit-chat. Let’s get into real stuff..let’s talk about Web5.
Yes, I know..it sounds crazy. It feels like it has been skipped on purpose, just so people can talk about it even more. Although, the intention was different. The reason behind the name web5 instead of web4 is simply because web5 is meant to offer what both web2 and web3 offer combined.
It all started with a tweet from Jack (see below). He specifically mentioned that current web3 is owned by VCs and I think this is really important and worthy digging more into it. Before we do that, let’s see what web5 actually is.
TBD @TBD54566975Web5: An extra decentralized web platform https://t.co/LDW3MZ8tON
They have posted an entire presentation (18 slides long) where they talk about it. If you want to read a summary on that, stick around, otherwise if you would like to read the entire presentation, you can find it here.
TBD is the name of the business unit within Block ( formerly known as Square), where they will be building the concept around web5. Let’s see their official definition.
Web5 is a Decentralized Web Platform that enables developers to leverage Decentralized Identifiers, Verifiable Credentials, and Decentralized Web Nodes to write Decentralized Web Apps, returning ownership and control over identity and data to individuals.
Wow wow..hold on a sec Jack, what is this with all those fancy never-heard words..
They argue that in the current model (web2 and web3), users do NOT own their data and their identity, their activity is held in silo apps.
The Decentralized Web Platform (DWP) enables developers to write Decentralized Web Apps (DWAs) using Decentralized Web Nodes (DWN), returning control and ownership and control over identity and data to individuals ←— we are calling this web5
Here’s an example. Your name is Alicia (maybe it is not, but let’s pretend it is).
Alice has created a facebook account where she actively engages her customers. Lately, there are so many changes happening in the platform that Alice is not happy about it. Ideally, she would want to move somewhere else but she would have to move into another platform and then basically start from scratch building her audience (and that only if those people are in the other platform). So she is stuck with it and has to use it no matter what.
Well, that was until now. On Web5, Alice will own her own identity and data. What this means is that, if Alice is not happy with Facebook ( or any specific DWA in web5), she will be able to transfer her friends list, and all her activity/data in another DWA app. She is no longer limited to sticking around with a specific platform because she will be the owner of everything she has done on web which will be stored in Blockchain.
All this will be achieved using did:// (Decentralized identifiers), self-owned identifiers that enable decentralized identity authentication and routing.
TBD relies solely on BTC because Jack (founder of Block) is a BTC maximalist. And that, for a reason. He believes that most of the other blockchain alternatives are VC owned and although they claim to be decentralized, they are still owned by a small group of people.
There is this powerful chart that shows some of the popular blockchains that are partially owned by VCs. In most of them, Insiders (VCs) are the majority shareholders.
On Bitcoin blockchain, there will be no VCs and no public sale of new token as it will rely on BTC only. It will be fully open source and decentralized.
I have argued about this countless times. The idea that web3 is all about community never really satisfied me as in most of the cases, founders and VCs were the actual owners who benefited the most from a token sale, whether that was in form of a crypto or NFT. Actual holders were lucky enough to benefit by speculating with the prices only.
I know it is long, but it had to be explained in details. That’s it. Go back to what you were doing before. Stay cool.
Btw, I think it is time to either re-brand my newsletter or buy the web5lunch domain now. 😂