Blockchain: the third generation web

Introduction

In today’s online world, and increasingly in the offline world as well, the word “blockchain” resonates more and more. In fact, you can find numerous articles of various kinds discussing all the characteristics that distinguish this technology. In particular, you can read the typical mantra repeated by almost anyone in the field:

“Blockchain is a decentralized, distributed, and global ledger with three fundamental characteristics: secure, immutable, and transparent.”

However, I have come to the personal conviction that to introduce a broad audience to complex topics, it is right to avoid the use of specialized language, in order to correctly play the role of a “bridge” between the common user and the computer technician. In this article, I will not write about how it works, or more generally, what blockchain is, or its most used protocols. Instead, I have chosen to stay on a much lighter level, which, if successful, aims to illuminate the reader about the potential of this technology, which in my opinion is still too underestimated and misunderstood.

Before delving into the technology itself, I believe it is important to contextualize the period in which blockchain took its first steps online. The official launch of the first functioning blockchain was on January 3, 2009, when a group of people led by the – or by – the user under the pseudonym Satoshi Nakamoto created the first block of the Bitcoin chain.

The driving force that brought together computer scientists, cypherpunks (a niche of data coding enthusiasts), economists, and mathematicians was the need to create an electronic currency that was not managed by a “fallible” counterpart, or in other words, a human one. In fact, Bitcoin, the currency on the eponymous “Bitcoin” network (the distinction is made through the use of lowercase), has the peculiarity of being able to be sent, received, and exchanged through the network between two or more parties without necessarily having a central point that must authorize the operation.

In other words, the role of the intermediary, seemingly essential and mostly performed by a bank (in the financial sector), is questioned, and Bitcoin thus begins its race, which to this day does not seem to want to stop. For many, this date marks the beginning of the Web 3.0 era.

Note: Web3 can be defined as anything built on a blockchain. The main actors in this sector are cryptocurrencies, NFTs (non-fungible tokens), Metaverses, dApps (decentralized applications), DAOs (decentralized autonomous organizations), and of course, the blockchain itself. It’s important to keep in mind that when we talk about Web 3.0, we mean the use of decentralized infrastructures, but not necessarily present on a blockchain.

Thus, a new frontier is born online, the third generation of the internet, which, thanks to this always active and uncensorable block ledger, allows users a new way to certify legitimate ownership of a physical asset, but also, for the first time, a virtual one.
In short, it’s about the ability to record a data composed of a unique and unchangeable identifying code (obtained through complex mathematical calculations), a date and time, and the “certification” of a certain operation (ownership, transfer, purchase, sale, vote, and so on). Somewhat like a notarial signature.

The underlying idea of the entire Web3 is the sharing of resources, while at the same time safeguarding individual privacy but leaving the entire system transparent to everyone. Every operation performed on the blockchain can be verified through the unique identifier I mentioned earlier and can be verified by anyone.

Web3, like the users who drive its development, aims to create a kind of global library shared by all, uncensorable, and allowing participants to contribute to the development of the system itself through democratic votes that accept or reject new proposed functions from time to time.

This is a fundamental characteristic that makes me believe that this system will gain more and more space in everyone’s daily life, precisely because its goal is to generate value for the user, without intermediaries controlling the system and without “owners” who can take away the intellectual or artistic property of those who use the system, depriving users of that value. The user becomes the central point of the entire system.

Now, let’s take another step and add a piece to this enormous puzzle, trying to convey how all of this is possible.

The Only Limit is Imagination

When we talk about blockchain, we implicitly refer to the function of a shared ledger on which we store various types of data and operations performed.

But what brings the entire network to life and acts as the driving force is the use of special tools called “smart contracts.“
These software programs, in fact, play the role of intermediaries, as mentioned earlier. Simplifying the concept for ease of understanding, smart contracts are a set of rules that, once satisfied, execute one or more operations. This functionality can be likened to a vending machine: when selecting the desired drink, the purchase price is displayed, and only once the necessary payment is made will the metal spiral be activated, causing the snack to fall. If this were managed by a smart contract, its code would be written to check for the presence of the requested snack in the vending machine (condition A), that the necessary coins are inserted (condition B), and that the exchange between coins and the product only occurs once both conditions are met (execution).

Consequently, if one of the parties involved does not meet the required requirements set by the system, the operation simply will not be successful, and the situation will return to its initial state.

To interact with a contract, it is necessary to authenticate (anonymously) in the system through your wallet. You can think of it as your “online identifier,” which is currently given by the classic combination of “email + password,” but with the advantage of being unique for the entire system. Moreover, everything stored inside our wallet technically becomes our property and has the ability to interact autonomously with any system it is connected to. Furthermore, through the unique string that ties our identity to an online counterpart, it is possible to reconstruct the entire history of operations performed from day zero (i.e., creation) of that specific wallet.

Let me explain all this with a practical example.

Alice and Bob enter a supermarket and each buy three apples. At the time of payment, with a simple pass of their wallet on the designated reader, Alice will be informed that she can pay for only two apples because she is a member of a loyalty program at the store. Bob, on the other hand, will be offered the option to pay for one of the three apples by deducting the “shopping points” he has earned over time.

What just happened with Alice and Bob can be compared to any supermarket loyalty program that will work more or less like this in the future:

When their wallet is read – or card, if you prefer, it doesn’t matter – the system will recognize that Alice’s wallet (or card) contains an NFT that is issued only to members of the store. Thanks to this NFT, the system will deduct the price of the third apple from the total, giving Alice an exclusive discount.

Similarly, it will recognize that Bob’s wallet contains enough loyalty points (which are, in fact, cryptocurrencies accepted as a method of payment at that specific store) to support the purchase of that apple.

But now, blockchain comes into play with its aces up its sleeve. Unlike traditional systems, closed within centralized and proprietary databases, often with proprietary languages as well, thanks to smart contracts, it is possible to make multiple systems interact without these systems sharing their data. This means safeguarding your data while being able to make agreements without imposing limits, even when the parties belong to different sectors.

With the ability to chain these software programs, the purchase of the three apples in the previous example could go to finance a part of the structure that produced those apples automatically, or share purchase statistics to improve the supply chain in a targeted manner. Moreover, consumers could have certainty about the origin of the harvest through product traceability.

This concept should not be limited to buying/selling but expanded to obtaining a degree, completing a course, proper waste disposal, reduced consumption or savings, correct payment of taxes, and much more.

In more general terms, it is possible to reward user behavior by connecting the entire society without limits of compatibility, scalability, or resource sharing.

A person’s wallet could function perfectly as a “universal digital document,” containing their health, academic, and professional data. In the workplace, for example, it would be possible to share one’s wallet with a human resources manager so they can track our educational, professional, and career path through the collection over time of various titles or “awards” obtained through virtuous behavior, certified by various companies for which service has been provided.

I would like to remind you, before alarming the more “shy” ones, that personal data within wallets can be chosen by the user who owns them. While it is possible to keep certain types of data private (such as health data), it is impossible to hide others, such as a warning received.

Control over one’s data remains in the hands of the user who is the sole legitimate owner.

An Incentive for Self-Improvement

From my point of view, the ability to involve different structures creates in the user the possibility of being encouraged to behave correctly in various sectors. The highly democratic nature conceived for the system‘s development would bring with it the seed of continuous improvement: if a new feature introduced by someone generates new value, it will be used more and will encourage other users to analyze and subsequently improve it, spontaneously. On the other hand, if the new function does not bring added value to the community but rather new complications in use, the user will not be inclined to use it, and this will push the function to be redesigned with more effective features.

In this way, the system will tend to constantly and organically improve based on the needs of its users, purging itself of malfunctions, penalizing fraudulent behavior, and encouraging the correct use of the tools offered. This could evolve into a technology that is simpler and accessible to all, built on the real needs of a society that uses it. Finally, I believe that human nature tends to be competitive, both with others and with oneself. Therefore, a visible competition system that rewards virtuous behaviors is inevitably an interesting tool that should be taken into strong consideration.

The Need for Blockchain

At this point, after understanding that it is possible to have a common and accessible ground for everyone on which to develop new ideas, generate value, and build entire shared systems, I want to emphasize the implicit need for blockchain in a hyper-connected society like the present one. There is a need to connect all the systems that have been created in the last three decades and are part of our daily lives, still today operating as independent islands and rarely communicating with each other.

I also believe that it is necessary to have the assurance of the reliability of a transparent system that safeguards my data and is interoperable between the online and offline worlds. A system that values users and facilitates everyday operations. It should not be controlled by an entity whose purpose is to generate money but should focus on generating new value. A system that is participated in by the users who use it and can contribute to its improvement by integrating new functions or eliminating obsolete ones. A living, functional system that tends toward natural improvement, without constraints and censorship.

I personally believe that blockchain is taking its first steps, but despite this, we will soon see it start running.

In conclusion, I want to remind you of the definition of technology: the development of science and technique with the aim of simplifying and facilitating an individual’s life.

For me, this is blockchain.