Learning To Use Web3: First Impressions

Come along with me as I learn about blockchain and web3: the good, the bad, why it’s needed, how to learn it, and, in the end, if it’s really what it’s hyped up to be.

Web3 is a new vision of the internet. Based on blockchain distributed public ledger technology, it poses opportunities—and questions—for me as a Salesforce administrator. 

Web3’s potential to transform how businesses transact and perform merits attention. In contrast, all new creations come with new concerns. But Is this just another innovation that will eradicate the need for my skills in the tech ecosystem? As a new Salesforce admin, I feel I haven’t even scratched the surface of all the knowledge I need to establish myself in the tech community. And with the talk of AI already in the air, I fear that technology will learn my industry faster than I ever could. 

Though AI and Web3 gave me anxiety, the idea of a decentralized version of the internet piqued my interest. 

Over the next series of articles, I will outline my experience learning about the good and the bad of Web3, how it pertains to me as a Salesforce admin, and how my perspective shifts along the way. Once I started digging into Web3, I realized the first thing I needed to understand was how a blockchain works. 

What Is Blockchain?

A blockchain is essentially a large collection of publicly available transactions. The blockchain used for most of Web3 is the Ethereum blockchain. 

In September 2022, the Ethereum blockchain switched from a high energy-absorbing blockchain run on POW (proof of work) to a blockchain run on POS (proof of stake) consensus. In a POS consensus mechanism, each block in the chain is proposed and validated by individuals who have “staked” crypto capital in the system. The “stakers” are rewarded with ether (ETH) if the block is created. If the staker does something that implies malicious intent (known as “slashable” behaviors) they are penalized by having their ether taken and by being removed from the network. This process consumes a lot less energy than the POW mechanism that is still used by Bitcoin. By switching to POS, Ethereum has lowered their electrical energy requirement by 99.84%. The blockchain has made it so that Web3 can be completely decentralized. 

As I began researching Web3, one of my questions was: “Why is Web3 important?”  After learning about how Web3 works on the blockchain, my question shifted to: “Why is decentralization important?”  

In October of 2020, a Nigerian protest group's bank account was frozen by authorities. The authorities froze the accounts in attempts to suffocate the SARS movement. In response the protestors, a group called the “Feminist Coalition” went to Twitter and asked for donations in bitcoin. They ended up raising over one million dollars in donations.  This article made it apparent to me that in a centralized system, you never have full control over your assets. Events like the one mentioned above aren’t aberrations, especially considering that in 2023, 72% of the world's population lives under an authoritarian government. In my role, I typically have full access to a client's data. That’s a lot of trust to put in an individual. 

Decentralization is aimed at addressing this risk. It allows for openness, peer insight, and collaboration, which is ineffaceable in strengthening a clients trust in an administrator. Bitcoin may have made steps toward decentralization, but Web3 could be the solution to these betrayals of trust. Let’s look at how Web3 aims to do that.  

What Is Web3? 

Web3 was first conceptualized by Gavin Wood, co-creator of Ethereum, in 2014. The core principles of Web3 are:

Decentralization 

Instead of the Internet being controlled by a centralized system, such as large companies or banks, ownership is awarded to the users. It is a new, decentralized version of the internet that runs on blockchain technology. 

No Third Parties

In Web3, you use your crypto wallet to store your data and make payments within the network. This is meant to keep your data private, as other users will be able to see the wallet’s activity but not the user’s identity. In addition to extended privacy, users also no longer have to put their trust and finances into the hands of a third party. When data enters external environments, it becomes vulnerable to security issues, loses visibility, and multiplies in complexity. By eliminating reliance on third parties, as an administrator, I obtain transparency, reliability, and simplicity. When managing customer data and complex platforms, these are priorities. 

Resistant to Censorship

Because Web3 runs on blockchain technology, it is incredibly hard to censor what a user does or says on the platform. The blockchain is also heavily encrypted, which prevents hackers from modifying your data. 

Democratic Ideals 

With Web3, not only can you have full ownership of your data, but you can also take part in owning some of the platform. The apps on Web3 are owned by DAOs (decentralized autonomous organizations). To become a part of a DAO, you must possess governance tokens, which allow you to vote on how funds are spent and how the group functions. DAOs are meant to be transparent and to eliminate the need to trust others in the organization; you just have to trust the DAO’s rules embedded in the blockchain’s code. While DAOs vote on smart contracts, a broader example of democracy in Web3 is through the proof of stake system mentioned earlier. 

Downsides

However, Web3 is still in early development, and there are still some concerns I have regarding who owns most of the crypto, its lack of regulation, and the steep learning curve. Let's explore the downsides of this technology in greater detail. 

Does More Crypto Mean More Power? 

My main curiosity is, “Will this just be another large economy that makes the rich richer and the poor hopeful?” Currently, in Bitcoin markets, 0.01% of bitcoin owners control 27% of the supply. This means the more crypto you own, the more power you have, which could be the case with Web3 as well. In the Ethereum POS mechanism, the more crypto a staker “stakes,” the more voting power they have. To me, this raises a major red flag. How can something claim to be decentralized when the more money you have, the more power you have? 

Lack of Regulation 

Currently the US government has not put in writing any regulations regarding Web3 or cryptocurrency, which creates a huge security risk for users. Cryptocurrency payments are not protected or reversible. During Ethereum's move from a POW blockchain to a POS mechanism, over $1.2 million in crypto was scammed. Because of users' lack of understanding around the merge, scammers were able to swindle users out of their crypto under the guise of an Ethereum upgrade. Scams happen frequently when users don’t have a proper understanding of telltale signs of scams or fully know how the system works. As an administrator, data security is my number one priority. Unprotected data getting into the hands of the wrong individual could mean the ruin of a company. Which is why lack of regulation is not something that can go unaddressed. 

Steep Learning Curve

Web3 may be difficult for new users to understand. Some of the concepts of Web3 are complicated for less technically minded people. I know I don’t even have a full understanding yet. Potential new users may be turned away or unable to participate if they don’t have access to educational resources about the blockchain, cryptocurrency, or other aspects of the environment. Not to mention, newer users may fall victim to scammers because of their lack of education surrounding the platform. Does this create a space everyone can participate in or only people with expendable incomes and resources? 

Conclusion 

Everything else aside, Web3 is still in its early days, and lots of things will change before it becomes mainstream. Like every new idea, there are bound to be benefits and pitfalls. While Salesforce is ahead of the curve by implementing web3 technologies, when Web3 becomes accessible to all kinds of users and puts more regulations in place. 

I think Web3 will be a valuable innovation, and I am excited to help companies implement it in their Salesforce instances. In the next article, I will go into more detail about blockchains, NFTs, DeFi, GameFi, and other Ethereum products. I will also see what the hype about crypto wallets is all about.