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How Bitcoin Fits into Web 3
- 1. How Bitcoin Fits into Web 3 Alex Lewin Warning: Gonna lump all non-bitcoin web3 together @_AlexLewin
- 2. Hello! ● I’m Alex Lewin. ● Software Engineer - BlockSpaces ● Work on Bitcoin & Lightning Network ● Passions: Bitcoin, Chess, Bojack Horseman @_AlexLewin
- 3. Talk Goals ● Missions & Priorities (Bitcoin vs. Web3) ● Trade-offs and Design Choices ○ Innovations to allow advancement WITHOUT compromising its goals. ● Why it’s worth it
- 4. Bitcoin ● Oct. 2008 - Satoshi releases whitepaper ● Describes a solution for digital money ● Decentralized, peer-to-peer, public ledger ● This system is commonly known today as the first blockchain.
- 5. Ethereum ● Nov. 2013 - Vitalik Buterin releases whitepaper ● Describes a new blockchain with built-in smart contract support ● Allows developers to build complex applications on a shared, decentralized infrastructure ● Sparks the Web3 movement
- 6. Web 3.0 ● Cambrian explosion of innovation ● Discovers a mountain of use-cases for blockchain, far beyond the scope of Satoshi’s paper ● Utilizes smart contracting platforms to reimagine the internet
- 7. Web 3.0 - Today ● $30 Billion invested into Web3 from Venture Capital ● >65 Web 3.0 Unicorns ○ Company with $1B+ valuation ● Web 3.0 awareness is nearly universal. Jan 2022
- 8. How the HECK is Bitcoin still around? WTF?? Because Bitcoin’s playing a different game. …considering all the innovative competition.
- 9. Mission - Summary 1. Decentralize Money (Crypto) 2. Decentralize Identity (SSI) 3. Decentralize Assets (NFTs) 4. Decentralize Governance (DAOs) 5. Decentralize Decisions (Contracts) 6. Decentralize Data Storage (IPFS) 1. Decentralize Money Use Blockchain to… Use Blockchain to… “Maximize blockchain’s innovation and usability for the new, decentralized internet.” “Create the best money in the world for the next 300 years.”
- 10. What’s so hard about that? Let’s make a money!
- 11. Let’s make a money! Step 1: Find a BEARER asset Bearer Asset == Measurement Asset
- 12. Let’s make a money! 1. Measureable
- 13. Let’s make a money! 1. Measureable 2. Divisible
- 14. Let’s make a money! 1. Measurable 2. Divisible
- 15. Let’s make a money! 1. Measurable 2. Divisible 3. Durable 4. Scarce
- 16. Let’s make a money! 1. Measurable 2. Divisible 3. Durable 4. Scarce
- 17. Let’s make a money! 1. Measurable 2. Divisible 3. Durable 4. Scarce
- 18. Let’s make a money! 1. Measurable 2. Divisible 3. Durable 4. Scarce 5. Fungible/Homogenous
- 19. Let’s make a money! 1. Measurable 2. Divisible 3. Durable 4. Scarce 5. Fungible/Homogenous GOAT since 9000 BC
- 20. Let’s make a money! 1. Divisible 2. Measurable 3. Durable 4. Scarce 5. Fungible/Homogenous GOAT since 9000 BC Globalization The Internet
- 21. Let’s make a money! 1. Divisible 2. Measurable 3. Durable 4. Scarce 5. Fungible/Homogenous 6. Global & Digital Venezuelan Bolivar 14 mil for a chicken
- 22. Let’s make a money! 1. Divisible 2. Measurable 3. Durable 4. Scarce 5. Fungible/Homogenous 6. Global & Digital 7. Incorruptible by Human Beings circa 2018
- 23. Let’s make a money! 1. Divisible 2. Measurable 3. Durable 4. Scarce 5. Fungible/Homogenous 6. Global & Digital 7. Incorruptible by Human Beings Q: “How can human beings make a system that’s INCORRUPTIBLE by human beings?” A: You get close if remove the need for trust and put in a bunch of fail-safes.
- 24. Let’s make a money! 1. Divisible 2. Measurable 3. Durable 4. Scarce 5. Fungible/Homogenous 6. Global & Digital 7. Incorruptible by Human Beings Q: “How can human beings make a system that’s INCORRUPTIBLE by human beings?” A: You get close if remove the need for trust and put in a bunch of fail-safes.
- 25. We Did It! The Best Money in the World… +/- some hand waving ;D
- 26. Recent Innovations “Is there anything new with Bitcoin since 2009?”
- 27. Biggest Areas of Research ● Scalability ○ More/faster/cheaper transactions ● Privacy ○ Protect against the $5 wrench attack ● Extensibility ○ Adding Features ○ Taproot
- 29. The Lightning Network - Scalability & Privacy ● Settlement time ○ On-chain: ~30 minutes ○ Lightning: ~1 second ● Fees ○ On-chain: ~$1 - $5 (ATH: $60) ○ Lightning: ~$0.01
- 30. 1. Bob sends bitcoin from his wallet to a payment channel with Alice. (Opens the bar tab) 2. Bob and Alice send payments back and forth. (The cumulative balance of all the payments is tracked) 3. Eventually, Bob and Alice close the channel and the net balance is settled on-chain. (Closes the bar tab, settles up)
- 31. USD - Denominated Account USD - Denominated Account Settle Payment over the Lightning Network Swap - Settle - Swap
- 34. Interested in Lightning? ● Bitcoin Design Guide ○ https://bitcoin.design ● BOLT.fun ○ https://bolt.fun/
- 35. Who cares?
- 36. Human Rights Foundation on Bitcoin
- 37. Takeaways 1. Bitcoin is Money… and nothing else. 2. Bitcoin is patient and uncompromising. 3. Bitcoin doesn’t have many features. 4. Bitcoin is important.
- 38. Learn More ● Atlanta BitDevs ● Atlanta BitPlebs ● Terminus Labs ○ terminus.money
Editor's Notes
- I’m grouping together all decentralized smart contracting platforms that implements ERC-20 or something similar
- We have a few goals for this talk… I’m hoping to give you an intimate feel for bitcoin… Demystify why the oldest, first-gen blockchain is still relevant… in this exciting, fast moving industry Bitcoin’s What are Bitcoin’s goals The trade-offs bitcoin makes to fulfill this vision And discuss some of the exciting innovations in bitcoin that allow it to advance without compromising its goals And due to the imposed limitations on Bitcoin… what are some of the innovations that allow bitcoin to advance… despite the limitations In ethereum land… you’re met with incredible developer resources IDE’s (remix) Incredible dev tooling Out-of-the-box boilerplate repos to begin a project It feels modern, fast-moving, and innovative Because of the EVM, ethereum feels like a developer’s playground… Internet first You can make a bunch of cool stuff Like casinos, markets, different types of tokens, The scope of work… anything with users/assets In Bitcoin land… You can make a cool wallet app! … Noteworthy organizations (which side did they choose) UN… Advises developing nations to use CBDCs They prioritize international geopolitical stability above all else Human Rights Foundation… Big advocates of Bitcoin The Human Rights Foundation is a nonpartisan, nonprofit organization that promotes and protects human rights globally, with a focus on closed societies. We promote freedom where it’s most at risk: in countries ruled by authoritarian regimes. Why the trade-offs are worth it. Closing Now, with the incredibly exciting I’m addicted to moving mountains, and seeing the impact of my work I choose to work in bitcoin to help
- Oct 31st, 2008… An anonymous person going by the name “Satoshi Nakamoto” unveils a COMPLETE solution to digital money… Digital money had worked on for decades to no prevail But in his paper, Satoshi described a complete solution to the digital money problem, involving a revolutionary system for processing transactions… This system is commonly known today as a blockchain
- This is huge… Now, I can write some code and glean the DECENTRALIZATINO BENEIFTS of the blockchain… but WITHOUT NEEDING to worry about the infrastructure.. Developers find this new tool and their
- Enter the world of web3 A cambrian explosion of innovation that reimagines how the internet should operate Utilizes this powerhouse feature of smart contracting platforms… to reimaging the internet.
- Enter the world of web3 A cambrian explosion of innovation that reimagines how the internet should operate Utilizes this powerhouse feature of smart contracting platforms… to reimaging the internet.
- How the heck is BITCOIN still around???? And what in god’s name is it doing at the top of the leaderboard???? WTF is it still doing on top???
- What properties are shared? What are the differences? And despite the picture… there’s much more in common than different.
- In Fall 2008 - an anonymous person going by the name “Satoshi Nakamoto” publishes a whitepaper,
- Both bitcoin and web3 have 90% of the same DNA… they use the same basic technology to accomplish similar goals But they’re strategy for doing so and their attitude about it is slightly different The web3 mission is multi faceted… ii’s broad.. Web 3 has several goals… Decentralize money… through tokens Decentralize Identity… through Self-Sovereign Identity Decentralize Governance… through DAOs Decentralize Decision making… through smart contracts Decentralize Datastorage… through ipfs Decentralize identity… through Self Sovereign Identity There’s a lot going on here! It seems like every aspect of our lives is being touched… So that’s web3… Now moving over to Bitcoin… Bitcoin takes a different approach… it has a different mindset Bitcoin’s only has one mission and that’s to decntralize money… It’s view is that fixing the money is the MOST important use of this technology And it’s not willing to make ANY compromises Bitcoin has this slogan: Fix the money, Fix the world… It believes that if you COMPLETELY FIX the money… all of the other world’s problems will sort themselves out… This is a bit of a lofty goal… maybe a tad of an overstatement… But this is Bitcoin’s outlook on the world.. It’s unompromising! And it takes this task incredibly seriously Bitcoin acknowledges that it can’t do as many cool things as it’s competition. BUT bitcoin is okay with that Bitcoin will NOT compromise to keep up with competition… because ALL it cares about is being the best money in the world. It’s to be long-lasting, incorruptible… PERFECT money… for the next 300 years.. High bar
- Let’s walk through what goes into making a digital money Traditional Money works in a couple of different ways, What makes a money good Plan Go through examples of bad money to glean the properties of a GOOD money. Well, this is harder than it sounds… All we have to do is think of something… that can be measured… And that measurement can’t change for YEARS And that you can’t make MORE of… What’s the purpose of money? It’s purpose is to keep track of how much VALUE you someone has and to allow people to trade that VALUE for goods and services… obviously Facilitate trading Cool… so as a society, let’s pick SOMETHING to represent our money. Let’s pick apples… Well… someone can plant an apple tree and CHEAT… They can just plant the apple tree That’s not fair… Our money CAN’T BE EASY FOR ANYONE TO MAKE… So it’s has to be scarce Also, if i collect a bunch of apples and they go bad… I’ve just lost all my money!! So it has to last forever (durbility) So let’s pick something else… What about diamonds… THAT many dithere’samond mines on the planet… and they can only pull so many diamonds out of the ground. And I cant break a diamond… so that fixes the durability issue Okay.. but let's think this through… How do we know how many of your SMALL diamonds are worth one of my BIG diamonds? Because they’re all different, it becomes difficult to use them as a measurement tool. So diamonds aren’t Homogenous or FUNGIBLE our society only has one diamond mine… so not everyone can make it right? Well, what about the people who the diamond miners? That’s pretty unfair… if they’re surrounded by diamonds, then they have an unfair advantage compared to the rest of us It has some properties that PREVENT PEOPLE FROM CHEATING IN THE ECONOMY You want the game to be fair… if someone has money, it had to have PERSONALLY earned it, or been gifted it by someone who got it legitimately. What are the common ways to cheat in THESE properties Physical money Has a few advantages Process of making a payment with physical, hard money Someone pulls out a bill Fixed supply (expensive to produce more)
- To make a money, we have to find a A BEARER Asset… This is an asset that measure value itself. Therefore, it has
- Who’s got ideas??? Idk… what about the EIFLE TOWER. Let’s make the eiffel tower our money. Oh shoot.. There’s only ONE eifle tower and we can’t split up the eifle tower into a million pieces
- Who’s got ideas??? Idk… what about the EIFLE TOWER. Let’s make the eiffel tower our money. Oh shoot.. There’s only ONE eifle tower and we can’t split up the eifle tower into a million pieces Gotta think of something else to be our money…
- What about Apples? They’re divisible… Okay so I’m going to put a bunch of apples in a vault and come back in a year… Oh shoot… my apples are spoiled… My money is gone. My money can’t rot away Also, my neighbor BOB has an apple tree… He’s gonna just make MORE MONEY That seems pretty cheaty to me… Here’s another
- Okay we’re getting somewhere… All we have to do is find something that’s MEASURABLE, DURABLE, and SCARCE
- What do we know that’s measurable, durable, and hard to make??
- What do we know that’s measurable, durable, and hard to make??
- What’s all of these things? Gold is pretty freaking good at being money… For a long time, it was the best money in the world Gold coins or pieces have been around in some form for the past 11,000 years… And that was perfect! … until a new challenger emerged - globalization and the internet.
- Globalization and the internet…
- What about… let’s say the Venezuelan Bolivar! You know the Bolivar, right? The official money of the great nation of Venezuela Just like the apples rotting in your safe deposit box… anyone’s wealth denominated in the Bolivar Vanished Except… now… it costs 14 mil Bolivars for a chicken and
- Now we have to find a money that is divisible.. measurable.. Dur…. global AND digital.. This is getting challenging
- Now we have to find a money that is divisible.. measurable.. Dur…. global AND digital.. This is getting challenging
- The first 6 things are programed into bitcoin… I don’t have the time to explain how bitcoin works today, but you’ll have to take my word that these six things are solved… The MUCH harder task is figuring out how to prevent humans from The first
- If you’re interested
- Let’s walk through what goes into making a digital money Traditional Money works in a couple of different ways, What makes a money good Plan Go through examples of bad money to glean the properties of a GOOD money. Well, this is harder than it sounds… All we have to do is think of something… that can be measured… And that measurement can’t change for YEARS And that you can’t make MORE of… What’s the purpose of money? It’s purpose is to keep track of how much VALUE you someone has and to allow people to trade that VALUE for goods and services… obviously Facilitate trading Cool… so as a society, let’s pick SOMETHING to represent our money. Let’s pick apples… Well… someone can plant an apple tree and CHEAT… They can just plant the apple tree That’s not fair… Our money CAN’T BE EASY FOR ANYONE TO MAKE… So it’s has to be scarce Also, if i collect a bunch of apples and they go bad… I’ve just lost all my money!! So it has to last forever (durbility) So let’s pick something else… What about diamonds… THAT many dithere’samond mines on the planet… and they can only pull so many diamonds out of the ground. And I cant break a diamond… so that fixes the durability issue Okay.. but let's think this through… How do we know how many of your SMALL diamonds are worth one of my BIG diamonds? Because they’re all different, it becomes difficult to use them as a measurement tool. So diamonds aren’t Homogenous or FUNGIBLE our society only has one diamond mine… so not everyone can make it right? Well, what about the people who the diamond miners? That’s pretty unfair… if they’re surrounded by diamonds, then they have an unfair advantage compared to the rest of us It has some properties that PREVENT PEOPLE FROM CHEATING IN THE ECONOMY You want the game to be fair… if someone has money, it had to have PERSONALLY earned it, or been gifted it by someone who got it legitimately. What are the common ways to cheat in THESE properties Physical money Has a few advantages Process of making a payment with physical, hard money Someone pulls out a bill Fixed supply (expensive to produce more)
- The code for Bitcoin is constantly changing… It consistently gets upgrades to improve its ability to be the BEST MONEY IN THE WORLD! There’s a few flavors of HUMAN ERRORS Bugs in the code
- The code for Bitcoin is constantly changing… It consistently gets upgrades to improve its ability to be the BEST MONEY IN THE WORLD! There’s a few flavors of HUMAN ERRORS Bugs in the code
- Despite the challenges of bitcoin
- Okay… I get it… it’s good money that moves around This brings the question…