Why Should You Care About Crypto? | Sergey Nazarov

Summary

The web 3 world is not just about tokens, but a shift towards a deterministic society where digital relationships are guaranteed and verifiable. It contrasts with the probabilistic nature of traditional systems like banks and insurance, where outcomes are not certain. Web 3 is about mathematically enforced properties that ensure transactions occur as expected, offering a reliable alternative that prioritizes user control and trust in the system.

Takeaways

• 🌐 The core of Web 3 is not just about tokens, but about creating a more expansive and functional infrastructure, similar to how the internet evolved beyond email.
• 🔄 Web 3 aims to transition from a probabilistic world, where promises are not guaranteed, to a deterministic world governed by mathematics and certainties.
• 🔐 In a deterministic system, control over assets is achieved through mathematical proof and cryptography, rather than reliance on potentially fallible human institutions.
• 🔑 Private keys are central to the concept of ownership in the Web 3 world, allowing individuals to have direct control over their assets without intermediaries.
• ✅ The verifiable web is characterized by the ability to verify system operations, real-time transparency, and the capacity to execute transactions based on predefined conditions.
• 💡 Web 3 technology ensures that digital relationships and transactions are deterministic, providing trust and security through mathematical enforcement.
• 🚀 The transition to a verifiable web is not about replacing existing systems, but about enhancing them with the deterministic properties of Web 3 technology.
• 📈 The appeal of deterministic applications lies in their reliability and consistency, which align with the preferences of rational economic agents.
• 🌟 Beyond the hype of tokens, the true value of the industry lies in its potential to create a more reliable, secure, and deterministic digital ecosystem.
• 🔄 The comparison of the internet to the postal service illustrates the broader potential of Web 3 to revolutionize industries beyond its initial perceived function.

Q & A

What is the common misconception about the Web 3 world?

The common misconception is that Web 3 is solely about tokens, similar to how the internet was initially perceived as being just about transmitting emails.

How has the internet evolved beyond its initial purpose?

The internet has evolved from merely moving around emails to supporting a wide range of applications, including video streaming, e-commerce, and various forms of information sharing.

What does the speaker mean by a 'deterministic world'?

A deterministic world refers to a society where outcomes are dictated by mathematical and cryptographic principles, rather than being subject to the whims of individuals or institutions.

How does the probabilistic world differ from the deterministic world?

In the probabilistic world, institutions and people promise certain outcomes but have the ability to change the rules or not deliver on their promises. In contrast, the deterministic world is governed by mathematical rules that ensure promised outcomes are met.

What is the significance of a private key in the context of Web 3?

A private key allows an individual to control a token or asset through mathematical means, without relying on any third-party permission or potential rule changes.

What are the three properties that define the transition to a verifiable web?

The three properties are the ability to verify how the system works, the ability to know what's happening in the system as it changes, and the ability to sign transactions that allow you to exit the system under the conditions you initially verified.

How does a deterministic system ensure that value is guaranteed and verifiable?

A deterministic system uses mathematical principles to ensure that any value put into the system is secured and transactions occur as verified, without the possibility of interference or deviation from the expected outcomes.

Why would users prefer a deterministic application over a probabilistic one?

Users would prefer a deterministic application because it guarantees that the application will always perform as expected, deliver on its promises, and protect user assets and information without the risk of deviation or failure due to third-party decisions.

What is the speaker's comparison of the internet's early days to the current state of the Web 3 industry?

The speaker compares the early days of the internet, where its potential was underestimated, to the current state of the Web 3 industry, suggesting that people are not fully recognizing the transformative potential of a deterministic digital infrastructure.

How does the speaker describe the core purpose of the Web 3, blockchain, and digital asset industries?

The speaker describes the core purpose as creating a deterministic version of the world where digital relationships and transactions are verifiable, guaranteed, and not subject to the unpredictable changes of centralized control.

Outlines

00:00

🌐 Understanding the True Nature of Web 3

This paragraph discusses the common misconception that Web 3 is solely about tokens, comparing it to how the internet was initially perceived as being just for transmitting emails. It explains that Web 3, like the internet, is about much more than tokens. The industry's goal is to create a deterministic world, contrasting the probabilistic nature of traditional systems where promises are not guaranteed and can be controlled by people, with a deterministic approach where outcomes are dictated by mathematics and cryptography. The transition to a verifiable web is emphasized, highlighting the importance of verifiable systems where digital relationships and transactions are based on deterministic properties, ensuring trust and reliability.

05:00

🚀 Embracing the Future with Web 3 Blockchain and Digital Assets

The second paragraph encourages interest in the Web 3 blockchain and digital asset industries, emphasizing that the true essence of the industry is not about tokens but about creating a deterministic version of the world. It likens the current state of the industry to a pivotal moment in the development of the internet, where its potential was underestimated. The paragraph suggests that rational economic agents would prefer applications with deterministic properties, as they offer guaranteed outcomes and reliability, just as the internet eventually outperformed traditional mail services.

Keywords

💡Web 3

Web 3, also known as the decentralized web, is the next evolutionary step of the internet that focuses on user ownership of data, privacy, and the ability to control one's own digital identity. In the video, it is contrasted with the current internet, emphasizing its potential to create a more deterministic and verifiable digital ecosystem.

💡Tokens

Tokens in the context of Web 3 refer to digital assets or units of value that are used to represent ownership, access rights, or to facilitate transactions within decentralized networks. They are an essential component of the blockchain technology that underpins Web 3, but as the speaker clarifies, they are not the entirety of what Web 3 is about.

💡Deterministic World

A deterministic world, as described in the video, is one where outcomes are not based on probabilities or the discretion of individuals or institutions, but rather on fixed rules and mathematical certainty. In the context of Web 3, this means that transactions and interactions are guaranteed to occur as programmed, without the risk of arbitrary interference or manipulation.

💡Probabilistic World

A probabilistic world is one where outcomes are based on likelihoods, risks, and the promises of institutions or individuals. This concept is used in contrast to a deterministic world to illustrate the current state of many systems, such as banking and insurance, where the user must trust that the institution will uphold its promises, but there is always a degree of uncertainty involved.

💡Private Key

A private key is a unique and secret digital code used in blockchain technology to prove ownership and control over a cryptocurrency or digital asset. It is a fundamental aspect of the deterministic nature of Web 3, as it ensures that the asset's owner has full,不可篡改的 control over their assets, without the need for intermediaries.

💡Verifiable Web

The verifiable web refers to a version of the internet where all digital interactions and transactions are transparent, auditable, and guaranteed to execute as agreed upon. This concept is central to Web 3, emphasizing the need for trustless systems where users can verify the integrity and functionality of the systems they interact with.

💡Blockchain

Blockchain is a decentralized and distributed digital ledger technology that records transactions across many computers in such a way that the registered transactions cannot be altered retroactively. It is the foundational technology behind cryptocurrencies and is integral to the development of the deterministic web mentioned in the video.

💡Digital Assets

Digital assets are intangible assets that exist and are stored on digital platforms or networks, such as cryptocurrencies, digital art, or other forms of electronic data that have value. In the context of the video, digital assets are controlled and managed through the deterministic systems of Web 3, ensuring secure and transparent ownership and transactions.

💡Cryptography

Cryptography is the practice and study of securing communication and data in the presence of adversaries. It involves the use of mathematical techniques to protect information from unauthorized access or disclosure. In the video, cryptography is a crucial element of Web 3, enabling secure and private transactions through the use of private and public keys.

💡Decentralized

Decentralization refers to the distribution of power, authority, or functions away from a central, concentrated source. In the context of Web 3, a decentralized system means that no single entity has control over the entire network, leading to increased resilience, transparency, and user empowerment.

💡E-commerce

E-commerce refers to the buying and selling of goods or services using the internet, and the transfer of money and data to execute these transactions. In the video, e-commerce is used as an example of how the internet evolved beyond its initial purpose of email transmission, similarly to how Web 3 is expected to expand beyond just tokens and cryptocurrencies.

Highlights

The core concept of Web 3 is not just about tokens, but about creating a more expansive infrastructure similar to how the internet evolved beyond email.

Web 3 aims to create a deterministic society, contrasting with the probabilistic nature of many current systems.

In a probabilistic system, entities like banks and insurance companies make promises that are not guaranteed and can be subject to change based on their discretion.

Deterministic systems are based on mathematics, ensuring that outcomes are not subject to the choices of individuals but are enforced by mathematical principles.

Private keys in Web 3 allow individuals to control assets through the rules of mathematics rather than relying on the permission of other individuals.

The transition to a verifiable web signifies a move towards digital relationships that are deterministic, guaranteed, and transparent.

The three properties defining this transition are: the ability to verify system operations, real-time knowledge of system changes, and the capacity to sign transactions under initially verified conditions.

In a deterministic world, individuals have full control over their assets, and entities like banks and insurance companies cannot prevent transactions based on their discretion.

The technical systems of Web 3 mathematically enforce the rules and transactions, ensuring a level of trust and reliability not found in probabilistic systems.

People often overlook the deterministic aspect of Web 3 due to the focus on tokens, but this is the true innovation that the industry is centered around.

The deterministic version of applications provides a level of certainty and reliability that would be preferred by all rational economic agents.

The essence of the Web 3 industry is to create a world where digital interactions are based on deterministic, verifiable, and secure relationships.

The analogy of the internet's early days being seen as a competitor to the postal service highlights the misunderstanding of the true potential of disruptive technologies.

Web 3 is not just about sending electronic 'mail' (tokens); it's about building a decentralized infrastructure that enables deterministic relationships.

The industry's goal is to shift towards a world where the foundational digital infrastructure is deterministic, transparent, and secure.

Individuals interested in a world with verifiable and deterministic digital interactions should be interested in Web 3, blockchain, and digital asset industries.

Transcripts

so I think the thing that people don't

understand about the web 3 world is that

they think it's about tokens the web 3

world is about tokens like the internet

is about transmitting emails right it is

about that but it's about a lot more and

at a certain point the internet was

about only moving around emails but then

the infrastructure of the internet

developed and became about much more

became about everything really about

video all kinds of information

everything e-commerce and so on the

thing that our industry actually does is

create a deterministic world a

deterministic society so there's two

ways that the world can work there's the

probabilistic way and the deterministic

way in the probabilistic world you have

Brands institutions people promising you

that systems work a certain way they

basically say if you give me your money

into a bank account I will always return

it to you or if you pay me for the

insurance I will pay you out of

something happens but the reality is

that there is nothing about the system

or the systems that that money goes into

that guarantees you those outcomes those

outcomes are completely controlled by

people that could decide that our bank

isn't returning your money right now

because we're going into insolvency or

our insurance company doesn't want to

pay you because we don't want to pay you

for whatever reason that's probabilistic

even though their brands are promising

you that that's not how it works we know

that's how it works because we've seen

endless examples of banks not giving

people their money insurance company's

not paying and so on then there's the

deterministic world which is determined

by mathematics and Mathematics doesn't

have any dimension of choice it's

mathematics physics

cryptography basically if you have uh

something called the private key you can

control a token you can control an asset

not because there's a person allowing

you to do that but because mathematics

is allowing you to do that so you can go

and at any time send a message to a

system

that's out there being run by a

multitude of people that have nothing to

do with you and their only real goal is

to make sure that the system operates

according to the way that it's supposed

to operate and the way it's

mathematically forced to operate is that

if you send that transaction in it will

do what the transaction says as long as

you have the mathematical proof to make

it do that and so in a deterministic

world if you control an asset you

control it through mathematics in a

probabilistic world you control it

because you have a password to a user

interface that's connected to a database

that someone else controls and they can

always CH change the rules of that so

this is uh really what we mean by the

transition to the verifi transition to

the verifiable web the transition to the

verifi web is a world where all

relationships All Digital relationships

are deterministic all the value you put

into a system is something that's

guaranteed and deterministic and it's

really defined by three properties the

first one is the ability to verify how

the system works the second one is the

ability to know what's going on in the

system as as it's happening as anything

is changing and the third one is to sign

transactions that allow you to leave the

system according to the exact conditions

you initially verified so in a

deterministic world if you have value in

a bank no one could ever stop you from

withdrawing it if an insurance company

was supposed to pay you something they

have no choice but to pay you because

the system itself the technical system

itself mathematically forces that

payment to happen and this is really

what our industry is about once people

understand this they generally realize

that if you could take any application

and you could take that same application

with the same features the same cost the

same usability but you could apply this

additional deterministic property to it

everyone would choose that

application right if you just get the

same exact thing same application same

speed same cost same features but the

application now in the in the

deterministic state can never deviate

from your expectations can will always

do what you expect it to do will always

give you back your money we'll always

pay your insurance we'll always keep

your information safe regardless of what

anyone

decides that is the application that

people and every rational economic agent

prefers what people don't realize

because of all the noise around tokens

is that that's not what the industry is

about the industry is about this

deterministic version of the world it's

kind of like a period in the internet

where everyone was saying or thinking

that the internet is a big competitor to

the United States Postal Service right

the postal service has a big competitor

it's called the internet because the

internet can send electronic

mail yeah that's true electronic mail is

kind of interesting but that's by by no

stretch to the imagination what

information technology in the internet

is about and it's the same about this

decentralized infrastructure that

creates these deterministic uh

relationships

so that is really what our industry is

about and if you're interested in a

world like that I think you should be

interested in the web 3 blockchain and

digital asset

Industries