It’s me, the person who works in crypto. I’m home for Thanksgiving.
We have the answers for the usual barrage of questions stuffed with preconceived judgments about Web3, crypto and blockchain
Midjourney modified by Blockworks
If you are like me — the one crypto person representing the entire industry around the dinner table this Thanksgiving — you are also likely anticipating the usual barrage of questions stuffed with preconceived judgments about Web3, crypto and blockchain.
Let’s think about all those questions before we are in a food-induced stupor, and maybe this year we can finally be thankful for finally getting through to your most skeptical aunt.
What is going on with the crypto guy who has been in the news?
FTX, SBF, FBI, SEC — an alarming jumble of letters that has spelled out some stressful times for our industry. In short, Sam Bankman-Fried (SBF) committed fraud using an exchange he created.
When it comes down to it, fraud is fraud. Bankman-Fried committed fraud and used crypto and Web3 to do it, and no, his actions are not reflective of an entire industry. Think about the internet; we can use it to order double chocolate cookies to our door, or we can use it to sell fake autographed pictures of Elvis.
Read more: SBF’s guilty: What’s next?
The use of a technology like the internet as we know it, or Web3, doesn’t make it inherently bad. Bankman-Fried’s use of a crypto exchange to steal money from his customers doesn’t make crypto inherently bad either.
Bitcoins and doggie coins? Did I miss something?
Bitcoin is crypto (a cryptocurrency), just as ether, and dogecoin (or doggie coin as my cousin prefers to call it) are. There are actually thousands of cryptocurrencies with different pros and cons. Some people love to speculate on crypto prices, some people think they are securities, and some people move to Miami because of them.
The interesting thing about them, to me at least, is what they could do. Think borderless payments, contracts without middlemen, and a more accessible financial system. We are working on it.
Is it called crypto, or Web3, or what?
We delight in arbitrarily changing up which term we use to maintain a sense of intellectual superiority, but when it comes down to it:
Crypto often refers to the industry, but more specifically cryptocurrencies (think about bitcoin, ethereum, etc.)
Blockchain technology is the technology that powers everything — basically, a ledger that can be used without the traditional trust and middlemen required by our current systems, and it’s permanent and can’t be edited.
Web3 is the big umbrella term that covers everything we are talking about, from cryptocurrency, blockchain, and the applications that are built on top of blockchain networks. We like to think we are building a new internet. What most of us use now is Web2 (think Google, Amazon, current websites, etc.) and Web3 is a move forward to improve it all by giving you control over your own data and money.
Isn’t crypto terrible for the environment?
Technology and our current financial system (banks, credit cards, etc) require energy. Our industry is no exception. Crypto got a bad rap because of how much energy Bitcoin was using, but many projects have shifted their approach to be much more environmentally friendly by shifting how they work (Ethereum did this), paying for carbon removal, or shifting their energy sources. These days, research shows that Bitcoin is powered primarily by renewable energy sources and, in some cases, is actually reducing harmful emissions.
Where do you work (a quick key)?
I work in a new field of technology called Web3. One year feels like 5 sometimes, which is why I look significantly older this year.
If you work for a layer-1: I work in a new field of technology for a project focused on the foundation layer of Web3, which is a new version of the internet. A layer-1, or L1, is what the whole world of other projects build on top of, think of Nintendo 64 as a layer-1 and Starfox as the project built on top of it.
If you work for a layer-2: I work for a project that is supposed to improve the foundation layer of Web3 by making it easier to use — faster and more streamlined, or just adding enhanced functionality. In this case, think about the foundation layer (L1) as a N64 controller and the layer-2 (L2) as the rumble pack.
If you work for a crypto focused investment firm: I work for a firm that funds different projects, like layer-1s, layer-2s etc.
I know it’s still confusing, it’s not just you. I’ve heard different questions for the past five Thanksgivings, and I’m genuinely thankful you are still curious about it all. Just like stuffing recipes, there are variations in how we do things and we don’t even agree on everything among ourselves. It will all stay a little stressful, and a little different, until this new technology fades into the background and becomes something we use without really thinking about it.
Pass the cranberry sauce please.
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