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Part 4: The Web3 and Blockchain FAQ

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Part 4: The Web3 and Blockchain FAQ

This is the last in a four-part series on blockchain’s many facets, including being the primary pillar of the emerging Web3.

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Part 1: First There Was Blockchain  |  Part 2: Delving Deeper into Blockchain  |  Part 3: Web3 Emerging

No matter how much information an article offers, sometimes you just want a fast, detail-complete answer to your burning question. Here’s nine more answers. We hope the answers to these frequently asked questions — along with the other three parts of the series — address any nagging Web3 and Blockchain questions you may have.

 

QUESTION: Is Web3, a methodology, a set of principles, a change in the way we do business, a trend, an idea, a philosophy, a fad?

 

ANSWER: I think Web3 is both philosophical and technical. Philosophical because awareness concerns over data privacy are growing with a few large entities gaining control of the lion’s share of data; prompting the desire for more decentralization. Technical processing and data storage is moved to the edge and decentralized with Web3, and networking is in a peer-to-peer architecture. Hence the catchphrase the edge is the new cloud. I think Web3 is the new Internet, and it's very disruptive. —Eric Frazier, senior solutions manager, Supermicro

 

 

QUESTION: What are the key benefits of Web3?

 

ANSWER:

1. Decentralization (peer to peer network and anyone can be connected with anyone directly

2. Trustless (no intermediary/middleman)

3. Permissionless (anyone can participate without authorization from a governing body

—Jörg Roskowetz, director product management blockchain technology, AMD

 

 

QUESTION: How should the data center of an enterprise be equipped to handle blockchain?

 

ANSWER 1: A tier 3 data center with proper redundancy is highly recommended as well as consistent bandwidth at 10 Gig minimum with 100 Gig recommended. —Michael Fair, chief revenue officer and longtime channel expert, PiKNiK

 

ANSWER 2: Typically, workstations with complementary GPU coprocessors. —Frazier

 

 

 

QUESTION: What are the benefits of NFTs?

 

ANSWER: There are several, here are the three more significant benefits: 

1. NFTs preserve the information necessary to support collection of royalties, even after multiple resales, with the proper smart contracts in place.

 

2. NFT’s could lead to the development and growth of a completely new creator economy in which music, video, art, book creators would be in control of their content sales, merchandising, they might even get tokenized payments for fan interaction and avoid any need to transfer ownership to platforms that publicize their content. The long line of business “partners” with their hands out awaiting their cut could be a thing of the past.

 

3. Inclusive growth: As NFTs bring content creators together into a shared market, a democratization of valuation will most likely occur that will benefit all participants.

—Frazier and Scot Finnie, managing editor, Performance-Intensive Computing

 

 

QUESTION: Does Blockchain or Web3 improve security?

 

ANSWER  1: First, Web3 user-to-platform interactions are confidential and anonymous, both in principle and in practice. This lets individuals realize their self-sovereignty and be assured of the security of their private information. Plus, Web3’s decentralized structure offers inherent security benefits because it eliminates the single point of failure. Blockchains are also composed of several built-in security qualities, such as cryptography, public and private keys, software-mediated consensus, contracts and identity controls. Bitcoin has not been hacked since its inception because the Bitcoin blockchain is constantly reviewed by the entire network. —Frazier

 

ANSWER  2: Blockchain-based data storage can defeat some types of ransomware, where the data itself is not sensitive but it is unique and irreplaceable. If your data storage system inherently gives you around-the-world redundancy that can survive flood, tornado, fire and so on, that’s increased data security. —Fair and Finnie

 

 

QUESTION: What are the advantages of storing enterprise data in a blockchain cloud storage service?

 

ANSWER: The value proposition for using a service like PiKNiK Web3 Cloud Storage is based on the following differences from traditional cloud storage providers:

1. Significantly lower costs

2. Immutability.  The blockchain monitors the data stored and reports back regularly to the customer verifying that the data has not been altered in any way. This is a free service; it’s part of the blockchain protocol.

3. Extra copies can be made anywhere in the world upon customer request. — Fair

 

 

QUESTION: What enterprise applications and make good sense for organizations to implement with blockchain?

 

ANSWER: An InterPlanetary File System (IPFS) storage system, supply chain, logistics, IP protection, licensing --Frazier and Roskowetz

 

 

QUESTION: What is the InterPlanetary File System and why does it matter?

 

ANSWER: The InterPlanetary File System was created by Juan Benet and was initially released as an alpha build in early 2015 (Wikipedia). Benet also founded Protocol Labs and is a Web3 advocate. It is believed that Benet was inspired for various aspects of the code by GitHub, BitTorrent and an MIT Distributed Hash Table (DHT). The DHT assigns a 24-digit immutable hash to identify content by name instead of by location. IPFS may be thought of as a replacement for the location-based addressing scheme that has underpinned the Web for 30 years—the HTTP protocol, written by Tim Berners-Lee. One of the key aspects of IPFS is that works like BitTorrent to leverage downloads by peers to preserve bandwidth. IPFS is a key piece of Web3 architecture. —Finnie

 

 

QUESTION: What are “dapps” (decentralized apps)?

 

ANSWER: Rich MacManus, writing for the New Stack, concluded that the problem with Web3 is dapps. It stands for decentralized app. Apparently, backend coding for a dapp is very different from traditional app coding and focuses on communication with smart contracts. What’s a dapp? Dapps serve the same purpose as apps written for other platforms except that they’re designed to run in a blockchain environment. For a recent list of top 10 Dapps see Geekflare. —Finnie

 

 

Other Stories in this Series:

Part 1: First There Was Blockchain

Part 2: Delving Deeper into Blockchain

Part 3: Web3 Emerging

Part 4: The Web3 and Blockchain FAQ

 

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Where Are Blockchain and Web3 Taking Us? — Part 3: Web3 Emerging

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Where Are Blockchain and Web3 Taking Us? — Part 3: Web3 Emerging

This is the third in a four-part series on blockchain’s many facets, including being the primary pillar of the emerging Web3.

Learn More about this topic
  • Applications:

Part 1: First There Was Blockchain  |  Part 2: Delving Deeper into Blockchain  |  Part 4: The Web3 and Blockchain FAQ

Perhaps the most surprising aspect about Web3 is the DAO, an acronym that stands for Decentralized Autonomous Organization. A DAO is an emerging alternative type of organization that operates without centralized management. Instead, power is shared by token holders who cast votes in a bottom-up approach, according to Investopedia. Activity in the DAO is recorded on the blockchain, where it is open to all. Smart contracts form actions that help govern organizational process and policy. From the outside, a DAO appears to function similarly to a corporation; from the inside it is very different. There’s no CEO, COO or President. Instead, DAOs are often managed by governing bodies, although many rules are pre-determined by smart contracts. For real-world examples of DAOs, see this Forbes article.

 

So, What is Web3, Anyway?

 

Web3 (also spelled Web 3.0) is a name for the next evolution of the web, following Web 1.0 and Web 2.0. It is expected to be built on open-source software, blockchain, NFTs (non-fungible tokens), smart contracts and other Blockchain-related technologies. Gavin Wood, founded Polkadot, co-founded Ethereum and was the originator of the Web3 Foundation. Wood coined the term Web3 in a 2014 blog post.

 

Web3 is not to be confused with another effort to remake the Web, also known as the Semantic Web and sometimes called Web 3.0.  The Semantic Web dates back to 1999, when Tim Berners-Lee coined the phrase, according to Wikipedia. The Semantic Web’s primary goal is to extend the standards set by the World Wide Web Consortium (W3C) to make the meaning of internet data machine-readable.

 

In April 2022, speaking to CNBC International, Wood defined Web3 “as an alternative vision of the web, where the services we use are not hosted by a single service provider but instead are purely algorithmic. They are in some sense hosted by everybody” in peer-to-peer fashion. “The idea being that all participants contribute a small slice of the ultimate service. No one really has any advantage over anyone else, not in the same sense at least as when you go to Amazon, eBay or Facebook, for example, where the company providing the service has power over how” that service is rendered and how your data are handled. In summing up, Wood said: “Web3 is about reducing the trust needed to use the internet services we use every day.”

 

Still Early Days

 

Web3 is available in test-tube fashion today. A basic form of the tech stack can be cobbled together using the Ethereum blockchain, it’s challenging and still doesn’t create the seamless end-user experience that it is hoped will describe the eventual product set.

 

The Web3 Foundation and others are working on different aspects of Web3.  Visit the Web3 Foundation for a look at Wood’s Web3 Technology Stack diagram.

 

The diagram describes the end-user software as a “protocol-extensible user-interface cradle ("browser")” that “a user would use to interact directly with the blockchain without needing to know implementation details. Examples include Status, MetaMask or MyCrypto.”

 

Web3 leaders would do well to remember that it was the user interface in the form of the Mosaic web browser that exploded, making the advent world-wide web content a certain thing. Available in public beta since earlier that year, Mosaic 1.0 released for Windows in November 1993. Just a year earlier, in November 1992, there were only 26 websites in the world (Wikipedia).

 

Juan Benet, founder, ceo, engineer of Protocol Labs, and creator of Filecoin and IPFS, is another key Web3 visionary who is tracking the user experience. In 2018, he gave a speech at the Web3 Summit called What Exactly Is Web3? Among other things, he spoke about browsers and the Web3 user interface: “Web 3.0 browsers are very different. Some look like existing browsers and they browse the web that way. Some are a single webpage that that connects you to the blockchain and lets you [initiate] transactions. Some are [“Web3 wallets”]. And some are extensions to your existing browser that add capabilities. We don’t really know what the browser of Web3 ought to be. We don’t have good usability yet. It’s a major challenge.”

 

Fervor

 

Web3 is a call to action for a user movement — like the user movement to PCs; like the movement to the world-wide web. When very large numbers of users insist upon a specific change, change happens. You don’t have to be clairvoyant to see that end-user security and privacy in the US has been severely compromised by our own intelligence agencies, big tech companies and foreign countries. It’s a bubbling pot waiting to boil over. How long before users demand a change?

 

There’s a fervor you sense from some of the people behind Web3 that you may not immediately understand. Blockchain is an open source-based system. It’s based on a P2P approach, which eliminates intervention from other parties, such as large tech companies, each of which controls access to a huge block of users. They have an overlapping monopoly on the personally identifiable data of millions of people. Web3 seeks to use a new web technology stack, blockchain and user crypto wallets to give back the ownership of such data to its users. For many the prospect of using blockchain technology and Web3 principles to take back user privacy is empowering.

 

For a well-written and comprehensive primer of Web3, see Ethereum’s Introduction to Web3.

 

 

Other Stories in this Series:

Part 1: First There Was Blockchain

Part 2: Delving Deeper into Blockchain

Part 3: Web3 Emerging

Part 4: The Web3 and Blockchain FAQ

 

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Where Are Blockchain and Web3 Taking Us? — Part 2: Delving Deeper into Blockchain

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Where Are Blockchain and Web3 Taking Us? — Part 2: Delving Deeper into Blockchain

This is the second in a four-part series on blockchain’s many facets, including being the primary pillar of the emerging Web3.

Learn More about this topic
  • Applications:

Part 1: First There Was Blockchain  |  Part 3: Web3 Emerging  |  Part 4: The Web3 and Blockchain FAQ

To get a sound understanding of blockchain, you should be aware of some of the nagging issues and criticisms. For example, blockchain has no governance. It could really use the guidance of a small representative group of industry visionaries to help it chart a course, but that might lead to a more centralized orientation. You should also familiarize yourself with the related tools and technologies and what they do. NFTs, in particular, work hand in hand with blockchain and add protection for those who create.

 

Getting NFTs

 

It has been effectively open season on digital content on the internet from the get-go. DRM technology didn’t solve the problem. Will the non-fungible token (NFT) make inroads? Its long-term success or lack thereof will largely be dependent on the success of blockchain. Make no mistake, blockchain is here to stay. It’s too useful a tool to leave behind. But Web3’s premise — that blockchain-based servers might someday run the internet — is by no means certain. (Come back for Part 3 which explores Web3.)

 

What are NFTs? “NFTs facilitate non-fraudulent trade for digital asset producers and consumers or collectors,” said Eric Frazier, senior solutions manager, Supermicro.

 

An NFT is a digital asset authentication system located on a blockchain that gives the holder proof of ownership of digital creations. It does this via metadata that make each NFT unique. Plus, no two people can own the same NFT, which also can’t be changed or destroyed.

 

Applications include digital artwork, but an NFT (sometimes called a "nifty") can be used for a wide variety of uses in music, gaming, entertainment, popular culture items (such as sports merchandise), virtual real estate, prevention of counterfeit products, domain name provenance and others. Down the road, NFTs may have a significant effect on software licensing, intellectual property rights and copyright. Land registry, birth and death certificates, and many other types of records are also potential future beneficiaries of NFTs.

 

If you’re wondering whether NFTs can be traded for cryptocurrency, they can be. What they are not is interchangeable. You may have an NFT for a piece of art that was sold as multiple copies by its owner. But each of those NFTs has unique meta data, so they may not be exchanged one for the other.

 

Smart Contracts Execute

 

A smart contract is blockchain-based, self-executing contract containing code that runs automatically when predetermined conditions are met as set out in an agreement or transaction. So, a hypothetical example might be: on January 15, transfer X value of cryptocurrency in payment for a specific NFT owned by a specific person. Smart contracts are autonomous, trustless, traceable, transparent and irreversible. Key hallmarks of the Smart Contract are that they exclude intermediaries and third parties like lawyers and notaries. And they usually use simple language, require fewer steps and involve less paperwork.

 

Blockchain Power Consumption

 

Some blockchains gobble up electricity and are heavy users of compute and storage resources. But blockchains are not all created equally. Bitcoin is known to be resource in hungry, while “Filecoin’s needs are materially less,” said to Michael Fair, chief revenue officer and longtime channel expert, PiKNiK.

 

It’s also possible to make changes to some blockchains to make them less power hungry. For example, Ethereum switched from the Proof-of-Work (PoW) to the Proof-of-Stake (PoS) algorithm a few months ago, which reduced power consumption by over 99%. However, Ethereum is less decentralized as a result because it is now 80% hosted on AWS. (See the discussion on Understanding Decentralized in Part 1.)

 

“With the algorithm switch from PoW to PoS, Ethereum’s decentralization took a big hit because the majority of transactions and validations are running on Amazon’s cloud” said Jörg Roskowetz, director of blockchain technology, AMD. “From my point of view, hybrid systems like Lightning on the Bitcoin network will keep all the parameters improving — scalability, latency and power-consumption challenges. This will likely take years to be developed and improved.

 

Can Web3 Remain Decentralized?

 

Is the blockchain movement viable going forward? There are those who are skeptical: For example, Scott Nover writing in Quartz and Moxie Marlinspike. Both stories were published almost a year ago in January 2022, well before the change at Ethereum.

 

Nover writes: “Even if blockchains are decentralized, the Web3 services that interact with them are controlled by a very small number of privately held companies. In fact, the industry emerging to support the decentralized web is highly consolidated, potentially undermining the promise of Web3.”

 

These are real concerns. But it’s not like the expectation was that Web3 would exist in a world free of potentially undermining factors, including the consolidation of Web3 blockchain companies as well as some interaction with Web 2.0 companies. If Web3 succeeds, it will need to support a good user experience and be resilient enough to develop additional ways of shielding tself from centralizing influences. It’s not going to exist in a vacuum.

 

 

Other Stories in this Series:

Part 1: First There Was Blockchain

Part 2: Delving Deeper into Blockchain

Part 3: Web3 Emerging

Part 4: The Web3 and Blockchain FAQ

 

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Where Are Blockchain and Web3 Taking Us? — Part 1: First There Was Blockchain

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Where Are Blockchain and Web3 Taking Us? — Part 1: First There Was Blockchain

This is the first story in a four-part series on blockchain’s many facets, including being the primary pillar of the emerging Web3. 

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 |  Part 2: Delving Deeper into Blockchain  |  Part 3: Web3 Emerging  |  Part 4: The Web3 and Blockchain FAQ

There has been a lot of buzz about blockchain over the past five years, and yet seemingly not much movement. Long, long ago I concluded that the amount of truth to the reported value of a new technology was inversely proportional to the level of din its hype made. But as with so much else about blockchain, it defies conventional wisdom. Blockchain is a bigger deal than is generally realized.

 

Basic Blockchain Definition and Introduction

 

(Source: Wikipedia): Blockchain is a peer-to-peer (P2P) or publicly decentralized ledger (shared distributed database) that consists of blocks of data bound together with cryptography. Each block contains a cryptographic hash of the previous block, a time stamp and a transaction date. Because each block contains information from the previous block, they effectively form a chain – hence the name blockchain.

 

Blockchain transactions resist being altered once they are recorded because the data in any given block cannot be altered retroactively without altering all subsequent blocks that duplicate that data. As a P2P publicly distributed ledger, nodes collectively adhere to a consensus algorithm protocol to add and validate new transaction blocks.

 

“A blockchain is a system of recording information in a way that makes it difficult or impossible to change, cheat or hack the system,” said Eric Frazier, senior solutions manager, Supermicro. “It is a digital ledger that is duplicated and distributed to a network of multiple nodes on the blockchain.”

 

Michael Fair, PiKNiK’s chief revenue officer and longtime channel expert added, “In the blockchain, data is immutable. It’s actually sealed within the network, which is monitored by the blockchain 24 x 7 x 365 days a year.”

 

Blockchain was created in 2008 under the apparent pseudonym, Satoshi Nakamoto. Its original use was to provide a public distributed ledger for the bitcoin cryptocurrency also created by the same entity. But the true promise of blockchain goes way beyond cryptocurrency. The downside is that blockchain operations are computationally intensive and tend to use lots of power. This issue will be covered in more detail later in the series.

 

Understanding “Decentralized”

 

The term decentralized is probably the most important tenet of Web3 and it is at least partially delivered by blockchain. The word has a specific set of meanings, although it’s become something of a buzzword, which tends to blur its meaning.

 

Gavin Wood is an Ethereum Cofounder, Polkadot founder and the person who coined the term Web3 in 2014. Based on comments made by Wood in a January 2022 YouTube video by CNBC International, as well as other sources, decentralized means that no one company’s servers exclusively own a crucial part of the internet. There are two related meanings for decentralized that get confused sometimes:

 

1. In its most basic form, decentralized is about keeping data safe from monopolization by using blockchain and other technologies to make data and content independent. Data in a blockchain is copied to servers all over the world, which cannot change that information unilaterally. There’s no one place that this data exists and that protects it. Blockchain makes it immutable.

 

2. Decentralized also means what Wood called “political decentralization,” wherein “no one will have the power to turn off content,” the way top execs could (in theory) at companies like Google, Facebook, Amazon, Microsoft and Twitter. Decentralization could potentially kick these and other companies out of the “Your Data” business. A key phrase that relates to this meaning of the term is highly consolidated. How many companies have Google, Amazon, Microsoft, and Facebook purchased over the past couple of decades? Google purchased YouTube. Facebook bought Instagram. Microsoft nabbed LinkedIn. But that’s just the tip of the iceberg. Where once there were many companies, now there are a few, very large companies exerting control over the internet. That’s what highly consolidated refers to. It’s term that’s often used to describe the opposite of decentralized.

 

Blockchain Uses

 

Since 2019 or so, new ideas for blockchain applications have arrived fast and furiously. And while many are plausible theories, others have been actively produced. If your company’s sector of the marketplace happens to be one of the areas that blockchain has been identified with, chances are good that blockchain is at least on your company’s radar.

 

Many organizations are looking to blockchain to rejuvenate their product pipelines. The future of blockchain will very likely be determined by technocrats and developers who harness it to chase profits. In other words, thousands of enterprises are developing blockchain products and services to their own needs, and if they succeed, many others will likely follow.

 

Beyond supporting cryptocurrency, three early uses of blockchain have been:

  • Financial services
  • Government use of blockchain for voting
  • Helping to keep track of supply chains. There’s a synergy in the way they work that makes blockchain and supply chain ideal for one another.

Blockchain has quickly spread to several areas of financial services like tokenizing assets and fiat currencies, P2P lending backed by assets, decentralized finance (DeFi) and self-enforcing smart contracts to name a few.

 

Blockchain voting could help put a stop to the corruption surrounding elections. Countries like Sierra Leone and Russia were early to it. But several other countries have tried it – including the U.S.

 

In healthcare, a handful of companies are attempting to revolutionize e-records by developing them on blockchain-based decentralized ledgers instead of stored away in some company’s database. The medical community is looking at it to store DNA information.

 

Storage systems are an early and important blockchain application. Companies like PiKNiK offer decentralized blockchain storage on a BTB basis.

 

Other Stories in this Series:

Part 1: First There Was Blockchain

Part 2: Delving Deeper into Blockchain

Part 3: Web3 Emerging

Part 4: The Web3 and Blockchain FAQ

 

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Eliovp Increases Blockchain-Based App Performance with Supermicro Servers

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Eliovp Increases Blockchain-Based App Performance with Supermicro Servers

Eliovp, which brings together computing and storage solutions for blockchain workloads, rewrote its code to take full advantage of AMD’s Instinct™ MI100 and MI250 GPUs. As a result, Eliovp’s blockchain calculations run up to 35% faster than what it saw on previous generations of its servers.

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When you’re building blockchain-based applications, you typically need a lot of computing and storage horsepower. This is the niche that Belgium-based Eliovp fills. They have developed a line of extremely fast cloud-based servers designed to run demanding blockchain workloads.

 

Eliovp has been recognized as the top Filecoin storage provider in Europe. This refers to a decentralized blockchain-based protocol that lets anyone rent spare local storage and is a key Web3 component.

 

To satisfy the compute  and storage needs, Eliiovp employs Supermicro’s A+ AS-1124US® and AS-4124GS® servers, running quad-core AMD EPYC™ 7543 and 7313 CPUs and as many as 8 AMD Instinct™ MI100 and MI250 GPUs to further boost performance.

 

What makes these servers especially potent is that Eliovp rewrote its code to run on this specific AMD Instinct™ GPU family. As a result, Eliovp’s blockchain calculations run up to 35% faster than what it saw on previous generations of its servers.

 

One of the attractions of the Supermicro servers is the capability to leverage the high-density core count and higher clock speeds as well as the 32 memory slots. And it comes packaged in a relatively small form factor.

 

“By working with Supermicro, we get new generations of servers with AMD technology earlier in our development cycle, enabling us to bring our products to market faster," said Elio Van Puyvelde, CEO of Eliovp. The company was able to take advantage of new CPU and GPU instructions and memory management to make its code more efficient and effective. Eliovp was also able to reduce overall server power consumption, which is always important in blockchain applications that span dozens of machines.

 

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