Web3: A Guide For Product Managers
Web3 is an internet owned by users and builders orchestrated with tokens. — Chris Dixon
What is Web3
Web3 is about the next evolution of the web. A web that is more open, transparent and decentralized.
Web3 is about the next evolution of the web. A web that is more open, transparent, and permissionless and runs on decentralized infrastructure such as blockchains. Global and decentralized applications (DApps) that anyone can interact with. They often have native assets integrated (such as Ether) to transact value but are not just about money or payments. These decentralized applications offer a range of digital services, such as storage, bandwidth, and computation without any risk of downtime, censorship, fraud, or 3rd-party interference.
Benefits
Open - in that they are built from open-source software, by an open and accessible community of developers and executed in full view of the world.
Trustless - in that the network itself allows participants to interact publicly, or privately without a trusted third party
Permissionless - in that anyone, both users and suppliers, can participate without authorization from a governing body
Further reading :
A Cyberphunk's Manifesto Eric Hughes
Why decentralization matters Chris Dixon
📺 But how does bitcoin actually work? 3Blue1Brown
The shift from open platforms to digital commons, David Bollier
📺 Deconfusing decentralization (VIDEO), Greg Slepak
Decentralized Networks (Dapps)
A decentralized application (dapp) is an application built on a decentralized network that combines a smart contract and a frontend user interface. On Ethereum, smart contracts are accessible and transparent – like open APIs – so your dapp can even include a smart contract that someone else has written.
A dapp has its backend code running on a decentralized peer-to-peer network. A dapp can have frontend code and user interfaces written in any language to make calls to its backend.
Zero downtime – Once the smart contract is deployed and on the blockchain, the network as a whole will always be able to serve clients looking to interact with the contract.
Privacy – You don’t need to provide real-world identity to deploy or interact with a dapp.
Resistance to censorship – No single entity on the network can block users from submitting transactions, deploying dapps, or reading data from the blockchain.
Complete data integrity – Data stored on the blockchain is immutable and indisputable, thanks to cryptographic primitives.
Trustless computation/verifiable behavior – smart contracts can be analyzed and are guaranteed to execute in predictable ways, without the need to trust a central authority.
What is a Smart Contract To introduce dapps, we need to introduce smart contracts – a dapp's backend for lack of a better term. A smart contract is code that lives on the Ethereum blockchain and runs exactly as programmed. Once smart contracts are deployed on the network you can't change them. Dapps can be decentralized because they are controlled by the logic written into the contract, not an individual or company. This also means you need to design your contracts very carefully and test them thoroughly.
Further reading :
The Architecture of a Web 3.0 application - Preethi Kasireddy
A 2021 guide to decentralized applications - LimeChain
What Are Decentralized Apps? - Gemini
Smart Contracts - Nick Szabo
Ethereum in 25 mins - Vitalik Buterin
Best Practices for Smart Contract Development – Yos Riady
Clean contracts - a guide on smart contract patterns & practices – wslyvh
What are Gas and Fees
Gas refers to the unit that measures the amount of computational effort required to execute specific operations on the Ethereum network.
Since each Ethereum transaction requires computational resources to execute, each transaction requires a fee. Gas refers to the fee required to conduct a transaction on Ethereum successfully.
Calculating the total transaction fee works as follows: Gas units (limit) * (Base fee + Tip)
Let's say Jordan has to pay Taylor 1 ETH. In the transaction, the gas limit is 21,000 units and the base fee is 100 gwei. Jordan includes a tip of 10 gwei.
Using the formula above we can calculate this as 21,000 * (100 + 10) = 2,310,000 gwei or 0.00231 ETH.
When Jordan sends the money, 1.00231 ETH will be deducted from Jordan's account. Taylor will be credited 1.0000 ETH. Miner receives the tip of 0.00021 ETH. Base fee of 0.0021 ETH is burned.
Further reading :