2019-2021: The Second Revolution of Web3
From 2019 to 2021, thanks to the boom of blockchain applications DeFi, NFT, and metaverse, the concepts of cryptocurrency and Web3 swept the world again. This stage was called "the second revolution of Web3" by historians.
Decentralized Finance, commonly known as DeFi, is finance created on the blockchain. It does not rely on financial instruments provided by financial institutions such as brokers, exchanges, or banks. Rather, it uses smart contracts on the blockchain (such as Ethereum) to carry out financial activities. The DeFi platform allows users to lend or borrow money from others, trade cryptocurrencies, and earn interest in accounts similar to bank deposits. As of October 2020, more than $11 billion had been deposited in various decentralized financial protocols. By the end of June 2021, the size of the DeFi market was smaller than $48 billion, down by 45% compared with data of May 2021. By the end of August 2021, more than 150 billion had been deposited in various decentralized financial protocols.
A Non-Fungible Token (NFT) is a data unit on the blockchain digital ledger. Each token represents a unique digital profile as an electronic authentication or certificate of virtual commodity ownership. Not being interchangeable, NFT can represent digital files, such as paintings, sounds, videos, items in games, and other forms of creative works. Although the files (works) themselves can be copied indefinitely, the tokens representing them are tracked on their underlying blockchain and provide proof of ownership for buyers. Cryptocurrencies such as Ethereum and Bitcoin have their own token standards to define the use of NFT.
The discussion of metaverse centers around a persistent and decentralized online three-dimensional virtual environment. This virtual environment will be able to enter the artificial virtual world through virtual reality glasses, augmented reality glasses, mobile phones, personal computers, and video game consoles. The concept of Metaverse has been applied to platforms such as VRChat and games such as Second Life, but it is still limited. Metaverse has considerable potential in computer games, commerce, education, retail, and real estate. At present, Metaverse application is mainly limited by the technical constraints of hardware devices and sensors required to interact with the real-time virtual environment. Many companies, such as Meta, Roblox, Epic Games, Byte Dance, and Microsoft, are investing in the research of Metaverse to improve its cost-effectiveness and expand its applications. Metaverse can be regarded as a massive application of all existing technologies, or a virtual space that requires various technologies including blockchain, artificial intelligence, augmented reality, and machine vision. Those who follow Metaverse also have concerns over data privacy and user addiction, which is a challenge for the entire social media and computer game industries.
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