Web3 has introduced many decentralized technologies that might revolutionize how we deal with data. The new iteration of the internet has given us the immutable blockchain, no central points of attack, and removed the need for any intermediaries while conducting transactions. This new era is very exciting and promising, however, many people have misconceptions about what Web3 really is. This article will debunk all the Web3 myths so you welcome this era with open hands.
Web3 Myths and Misconceptions
Web3’s myths circle around a variety of topics that make people confused about what these new decentralized technologies are all about. There are misconceptions surrounding cryptocurrencies, non-fungible tokens (NFTs), blockchains, and the Web3 space as a whole.
Web3 Is Illegal
If it isn’t the biggest misconception of them all. The first thing people might say when you bring up the word Web3 is, It is illegal right? Or is that where shady businesses and illicit activities take place? They must be confusing it with the deep web.
Web3 however is the new iteration of the internet that follows the read-write era of Web2. Web3 is coined as the read-write-own era that is decentralized, permissionless, and trustless. The technology responsible for this radicle shift is the blockchain. Which itself is an immutable distributed ledger that acts as a record or database of transactions.
So basically, nothing shady or illicit here. However, there is room for illicit activities in everything, not just Web3. Some argue that cryptocurrencies are used for illicit flows of funds, but so as gold, livestock, and fiat currencies are. Nothing new here. Things like wash trading, money laundering, and plagiarism are very much present in Web2 as they are in Web3.
Also, blockchains are literally public, so it might be the worst place to conduct illegal acts. Although authorities are yet to regulate the space, it is definitely not illegal.
Cryptocurrency Is a Scam
This misconception is widely thought of, and it is simply wrong. People might attribute crypto and NFT-related scams and rug pulls to the whole Web3 space. Just like you can be scammed in real life using fiat currency, that doesn’t mean that the whole currency system of your country is a scam.
Part of this misconception also circles around the idea that cryptocurrencies are “not real money”. What they refer to with real money is cryptocurrency is not used as a medium of exchange for services other than flipping tokens. However, crypto is very much being used as real money in daily purchases.
In the past couple of years, there has been an increase in the integration of traditional payments with crypto payment, and thus, many services have emerged that allow people to use crypto instead of fiat currency.
Web3 Itself Is a Myth
Many speculate that Web3 itself is a myth, or that the decentralization it preaches is nothing but a lie. Although Web3 is not that decentralized, it doesn’t mean that it is central or a lie. Many think that Web3 is a scam or Web2 in disguise trying to take away their money by promoting a fake universe (Metaverse) and useless Jpegs (NFT).
However, in a technical sense, Web3 is the third generation of the internet and its ethos is based on decentralization. Although it is still not yet fully implemented, many funds are going towards organizations and companies that are trying to make Web3 a reality.
Web3 Apps Are Very Different than Web2 Apps
This is again, false. Actually, part of why Web3 is regarded as a myth altogether is that Dapps are very similar to Web2 apps in terms of the user interface. The front end doesn’t have anything to do with the back end (which in this case is the blockchain).
In addition, using a decentralized app doesn’t expose your identity, this is also a common Web3 myth. This is not the case, however. The terms of privacy will be clear depending on which app you use, exactly like you would see using Web2 apps. For instance, in some apps, your purchases and trades will be public, but your identity will not.
Crypto Transactions Are Anonymous
This Web3 myth kinda relates back to myth #1, but it’s the other way around. Some people believe that all crypto transactions are anonymous and thus, many would resort to Web3 for conducting illegal transactions. However, this is far from the truth. The blockchain is a public ledger that tracks how much is sent from one address to another.
Many would think that the wallet address is too complicated for one to tell who it belongs to, and thus, they can hide behind it. However, many governments have reached out to many exchange platforms to map each address to its owner.
Blockchain Equals Bitcoin
This one is very common among those who know little to nothing about the whole blockchain technology. Since Bitcoin is way more popular than its underlying technology, people confuse it with the actual blockchain.
Blockchain is a peer-to-peer distributed digital ledger that records transactions between entities. It is the database that stores all decentralized information and it is the root of Web3 technologies. Bitcoin however is a cryptocurrency or a token that can be exchanged between two parties without intermediaries by being recorded on the blockchain.
However, the Bitcoin token does have a blockchain of its own just like Ethereum does.
Blockchains Are Not Reliable Because Crypto is Volatile
This is a common Web3 misconception. Many relate the volatility of cryptocurrencies or the NFT market with the credibility of the blockchain itself. The blockchain is not responsible for any crypto price fluctuations.
Cryptocurrency volatility is a result of several factors including demand, utility, competition, and mining. Even a single person with high power such as Elon Musk can influence the crypto market. However, the blockchain is highly secure and immutable and its credibility is related to data security, not market volatility.
You Have to Run your Own Blockchain Node
Running a node to operate the blockchain is not that easy or user-friendly. This is why this is considered a myth. You wouldn’t expect that all Web3 community runs a node on the decentralized network. The only thing you’ll need to join is a good internet connection and you’re good to go. However, if you like to operate your own node, you can with the right equipment.
NFTs Have No Value
This Web3 myth is somewhat valid. From an outsider’s perspective, NFTs are ape Jpegs that are being traded for millions of dollars. There is simply no point in this context. However, this misconception comes from the fact that many don’t understand what an NFT is.
Non-fungible tokens (NFTs) are unique tokens that act as a certificate of ownership for a unique asset. NFTs can be linked to literally anything and provide proof of ownership. You can attach an NFT for a land deed and trade the land directly on the blockchain, removing the need for real estate agents and paperwork. You can also track all previous transactions related to this specific land.
The applications of NFTs are quite limitless. The core of this technology is authentication, which can be used in many fields and industries. The future of NFTs is yet to unfold in order for them to elevate to their true potential.
NFTs Are “Downloadable”
This is the mother of all NFT myths. The Web3 community calls this a “right-click saver” mentality. This is again coming from a perspective that doesn’t understand how NFTs work. Outsiders claim that NFTs are useless since they can literally save and use the image. However, there’s a fundamental problem with how we view digital art in the first place.
Although you can save an image, that doesn’t give you the right to use it. Copyright infringement is a big deal. Blockchain technology introduced the ability to take ownership of digital images and media. Even if someone “stole” your NFT image that you paid a lot to buy, they can’t really use it. You have a token that proves that you are the sole owner of the image. If they ended up using it, however, the best thing you can do is sue them.