We need to first confirm the definition of web3 in this article, which is limited to the official documentation of Ethereum: Web 3 refers to decentralized applications that run on the blockchain, and Web3 uses blockchain, cryptocurrency, and NFTs to return power to users in the form of ownership. As for the advantages related to web3 and the problems it solves, these are old topics that will not be elaborated on extensively. More effort will be spent on discovering, describing, analyzing, and solving problems.
1.1 Data Monopoly
As for the stories of traditional Internet companies, when Internet products start operating, they will try their best to recruit users and third parties such as developers, enterprises, and media organizations to supplement their services to make them more valuable. After accumulating a certain number of users, platform products are boosted by the flywheel effect. The more users, the better the platform value, and the more dependent users are on the platform. After obtaining a large number of users and user data, under the Matthew effect, large platforms can crush small platforms of the same type in competition, with large platforms having a large amount of traffic and algorithm models based on user data. This ultimately leads to a few large platforms being able to gather more users and data, forming a monopoly.
The core reason for the power and monopoly of giants is the control of the database. Only they can decide who has permission to read and write this database and which parts of the database can be accessed. As a user, you do not actually own any data.
At this time, the ownership and control of user data are monopolized: these large companies usually own and control the data generated by users on their platforms, while users have limited control over their own data; data liquidity monopoly: user data is usually locked in specific platforms or services, which limits the liquidity and interoperability of data. Monopoly on data value ownership: These companies often use their control over data to profit through advertising and other business models, while users who use their own data do not receive any benefits.
(As shown in the figure: when they reach the top of the S-curve, their relationship with network participants changes from positive-sum games to zero-sum games. The easiest way to continue to grow is to extract data from users and compete with complementary products in terms of audience and profits.) Because users’ data and relationships are monopolized by giants, when users switch to platforms of the same type, their previous social relationships and produced content no longer exist. At this time, new software is difficult to survive, even if the product design is good and innovative, some companies that control mainstream traffic may copy it and occupy the head of this type of industry by relying on strong traffic and user base.
Today, the giants sit with a large number of users and their monopoly on data has resulted in users being trapped in the cages defined by these giants. They decide what we can see, say, and do, and even distribute garbage content to us. The wrongdoing of centralized companies leaves users with no weapons to resist this.
(Recently, when searching for a well-known crypto project on Google, the first result was a sponsored result, but it was not official and was a phishing website, causing many people to lose a huge amount of wealth.)
They customize the laws of our behavior in the digital world, and with the blessing of big data and algorithms, a large amount of content erodes users like opium. We are like humans in the matrix controlled by AI in the life support system, and they let us live in a false dream to extract our bioelectricity as the nutrient for their operation.
1.2 Data Island
In today’s web2.0 environment, the account systems and data between various platforms are disconnected. We often use various apps to meet our daily needs, such as using WeChat for chatting, using Weibo to follow current news, or using Taobao for shopping. However, these apps have their own independent account systems, and users need to create new accounts and perform initialization steps when using new apps. This means that users need to remember a large number of usernames and passwords, and if they forget them, they need to go through the tedious password recovery process.
Similarly, due to the fragmentation of data between various platforms, users’ social networks on different platforms are also disconnected. For example, your friend information on WeChat cannot be shared on Alipay. If you want to share a piece of social information, you may need to post it on Twitter and WeChat Moments separately. This scattered data storage method requires users to search for and manage their information on multiple platforms, which affects their social experience. You may find that your friends on one platform do not exist on another platform, or you cannot migrate the social relationships established on one platform to another platform.
In addition, the content you like on one platform cannot be known on other platforms. This means that, except for yourself, basically no one can confirm whether your Twitter account, WeChat account, and other social accounts belong to the same person.
1.3 Ownership of data and the looting of data value
In the current traditional Internet environment, users usually only have the right to use account data, not ownership. Once a centralized company decides to ban a user’s account, that person’s existence in the online world may be completely erased, which can be said to be “social death.”
User data is an important asset of Internet companies and can be used for user behavior analysis, product recommendations, targeted advertising, and other purposes. Under the Web2.0 model, the value of user-generated data is mainly divided by the platform. For example, social media platforms may use user behavior data to sell ad space to advertisers, but users themselves cannot benefit from this process. Worse still, platforms sometimes push different content and information to users based on their characteristics to maximize their own interests. Although the data is generated by users, users cannot decide whether their own data can be used, nor can they share the benefits generated by data use. Some people even use the term “freeloading.”
Some Internet companies even sell users’ privacy data, such as phone numbers and user preferences, which may be used by other platforms for commercial use.
In addition, if the platform goes bankrupt or suffers a hacker attack, users’ data may face the risk of loss or leakage. For example, when Blizzard and Netease terminated their cooperation, users’ virtual assets in these games (such as game skins, etc.) could only be “frozen” and could no longer be used.
2.1 Decentralized computing
At the technical level, according to Vitalik’s description in “The Meaning of Decentralization,” decentralization can be divided into three aspects: architectural decentralization (distributed deployment of servers), political decentralization (dispersion of control service operators), and logical decentralization (independent operation capability of the system), the article link is as follows:
However, decentralization is not only a proprietary term of web3. Nowadays, many key services in traditional Internet technology architecture (such as gateways and service buses) take decentralized measures to avoid the risk of single-point failures. These services run on various system nodes to prevent a service from crashing and causing the entire system to collapse, thereby increasing the fault tolerance of the system.
So we can see that to some extent, decentralization in architecture and logic can increase the fault tolerance of the system. Because a decentralized system is difficult to attack, destroy, or manipulate, the system becomes highly robust in operation.
At the product level, Web3 advocates decentralized services as the core. Products that operate on decentralized services or are operated by decentralized product teams are not subject to the control of a few powerful giants.
2.2 Identity Sovereignty Digital Identity DID
Even if one day your body disappears, there are countless computers proving that you exist in this world.
Identity sovereignty may be one of the most important revolutions of web3. Identity is everyone’s most important asset and needs to be put on the chain. DID ultimately hopes to build a description of a person’s identity in the decentralized digital world.
For example, the Next.id project is undertaking such a demand, integrating all web3 and web2 accounts together to form a user’s own avatar, forming a complete person in the digital world.
(The official avatar formation process of next.id, https://docs.next.id/core-concepts/how-it-works uses various account relationships and metadata to describe who you are in this networked world.)
Through hashing biological information on the chain, Worldcoin binds your carbon-based self and your silicon-based self together.
2.3 Value Flow
The market economy is the most effective way for us humans to achieve value distribution and value flow today. However, today we achieve value flow through fiat currency. Fiat currency is endorsed by government credit, and when the government stimulates the economy through a large amount of currency issuance in some financial regulatory means, it is bound to bring inflation and affect normal value exchange. Trade between transnational entities is also subject to political risks.
We can see today that any value exchange and circulation between individuals requires centralized support or intervention. However, today centralization of third parties is not a completely reliable choice, and because of the intervention of third parties, we have efficiency issues in value conversion. Traditional financial institutions and third-party payment systems have some limitations, such as transaction fees, time costs, and security issues.
There is now a form of transaction that is not restricted by centralization, enables peer-to-peer payments, and is resistant to censorship, significantly improving the efficiency of value flow. This type of transaction is based on blockchain technology and is a form of cryptocurrency. With this currency, people can conduct decentralized transactions without relying on traditional financial institutions and third-party payment systems. This method of transaction can reduce the time cost and transaction fees while ensuring security.
First, let’s take a look at the internal mechanisms that maintain the good operation of Bitcoin:
1) The P2P distributed structure makes it extremely tenacious; it can only be “parted with you” if the Internet is shut down. But as long as the Internet is restored, it will come back!
2) The issuance limit set by the mathematical algorithm makes it logically have a good store of value function;
3) The inherent anti-counterfeiting function in the algorithm;
4) Payment based on the Internet is anonymous, free, and secure;
5) It does not consume physical materials and has no wear and tear;
6) It can be infinitely divided.
Obviously, it is difficult to find a better form of currency than this.
Since Satoshi Nakamoto released the Bitcoin white paper, the characteristics of using encryption technology to achieve decentralized transactions, no third-party verification, resistance to censorship, and user ownership have attracted tens of thousands of developers to build the web3 ecology. However, a beautiful vision is empty without users. Just like web2 applications, dapps in web3 also need to place user growth at the P0 level. In addition to operations, there is a necessary condition for achieving user growth, which is whether the product itself is good enough to experience. Dr. Xiao Feng said that all web2 products are worth redoing in web3. We need to think about how to attract users from web2 to web3, and how to provide some value that cannot be replaced by web2 in the same scenario without losing the user experience.
Vitalik in “Some personal user experiences” mentioned that there are many problems in user interaction experience, settlement efficiency, and gas fees for transactions. The original link is as follows:
( https://vitalik.ca/general/2023/02/28/ux.html )
Yu Jun mentioned in “Yu Jun’s Product Methodology” that the value of a product is divided into business value and user value, and business value is the decisive factor for investment, while user value is the decisive factor for users to use the product.
User value = New experience – Old experience – Replacement cost
Replacement cost refers to the user’s own time, money, and learning costs. To increase the value of the product for users, we need to greatly reduce the replacement cost, that is, reduce the threshold.
Nowadays, due to the excessive emphasis on decentralization, the user-unfriendliness of Web 3 has brought tremendous pressure to the entire ecosystem. Of course, this is mainly due to the current lack of mature decentralized infrastructure, and technology is a double-edged sword. Today, we introduce blockchain technology to solve some centralized problems, which will bring many problems caused by this still immature technology. Today we need to carefully understand the problems currently existing in Web 3, and think about the technical solutions needed to solve these problems.
Today, both the number of users and the daily activity of Web 3 are several orders of magnitude lower than those of traditional Internet.
It is completely possible to form a consensus on the user experience of Web 3 today. The user experience of Web 3 is very poor compared to Web 2. A good user experience is a necessary condition for ordinary users to onboard to web3 dapps without speculative purposes.
Vitalik combined his own experience from multiple perspectives such as user interaction experience, transaction security, wallet recovery, and privacy to talk about some of the current user experience based on Vitalik’s article, combined with his own development and experience to further discuss the problems and related solutions of Web 3.
3.1 High user learning cost
Reducing learning costs means reducing the time and complexity required for users to become familiar with product usage. Web 2 products allow users to quickly understand how to use the product through excellent user interface and interaction design, but the situation is different in Web 3.
Web3 wallets are the passports to enter the decentralized world, which is an undisputed conclusion. Users need to use wallets to conduct transactions and interact with other users. In Web 3, the user’s wallet represents the user himself. In addition, excitingly, in the Web2 world, products that are isolated from each other require users to remember account passwords on different platforms. In Web 3, users only need their own wallet to achieve full-platform login.
However, there is no doubt that the design of EOA wallet is currently one of the biggest obstacles to ordinary users. The current wallet products are very difficult for users who are new to the circle and have no technical background. Users need to understand concepts such as public-private key pairs, asymmetric encryption, and mnemonics, and they also need to understand wallet types such as hosted wallets, self-hosted wallets, cold wallets, and hot wallets. For users who have been spoiled by Web2, this is unacceptable. Users will feel, “Are you teaching me to do things? Why do you have to teach me so much knowledge before I use it?” If the entry is so difficult, how can we talk about the Dapp behind the entry? Therefore, wallet products based on EOA accounts that need to manage private keys adopt mnemonic schemes will inevitably become history.
3.2 High User Usage Cost
All data on-chain operations require a certain amount of gas fees, and the completion time of on-chain operations is relatively long. Users who use dapps need to pay a certain fee for any operation involving data changes and wait for a certain amount of time. This is unacceptable for ordinary users. The high gas fees and long wait times are due to the high computational costs of data on-chain operations, but these calculations can be delegated to an independent layer so that the chain only records the final results. Therefore, Layer2 is the solution to this problem.
As for the application direction, in the transaction payment scenario, in web2, users only need to scan the payment tool bound with a bank card, enter the password, click to confirm, and the whole process does not exceed 5 clicks. In web3, users need to convert legal currency into crypto tokens, confirm which public chain the other party’s network belongs to, confirm whether the gas fee is sufficient, confirm whether the other party’s address is correct, switch networks, select the currency, and confirm payment. These complicated steps can only be done by web3 users who are willing to do so for profit. “Yujun’s Product Methodology” mentions that “users are difficult to educate, so we should cater to users instead of changing them.”
Web3 payment scenarios should cater to users who use web2 payment tools such as BlockingyBlockingl and aliBlockingy. Many of these steps can be replaced by the program itself. The wallet interaction can be hidden in the program in API form. Therefore, the development of smart contract wallets, this infrastructure, can solve the user experience problem in this scenario.
3.3 High User Risk Control Cost
There are ten thousand ways in this industry to make you rich overnight, and there are ten thousand ways to lose all your assets. Asset security issues are typical directions for these zeroing methods. Currently, crypto applications can be said to be an ATM for network hackers.
Several characteristics of current crypto transactions make security incidents frequent: 1. No bank or other third-party trusted institution marks risky transactions 2. Encrypted transfers are irreversible. After the transaction is transferred, if it is a risky transaction, the assets cannot be recovered by freezing the assets. 3. Losing the private key means losing all wallet permissions.
Therefore, in web3, user risks mainly come from the characteristics of EOA wallets and the characteristics of crypto transactions. The specific risks are as follows:
1. Single-point failure: If the user’s mnemonic is lost or forgotten, there is no current technological means to retrieve the wallet. Therefore, in order to securely save the mnemonic, users need to pay a high cost. However, no storage medium can guarantee both security and loss retrieval at the same time.
2. The risk of wallet theft is high: If any user obtains the mnemonic or private key of a wallet, they can gain access to all permissions of the wallet, and there is no risk control measure to prevent hackers from making transactions with the wallet. In contrast, in Web2, WeChat requires a lot of verification processes when logging in on a new device, and payment tools like Alipay and Blockingl have mature risk control models to monitor and protect every transaction that is about to take place or is in progress. Therefore, ordinary users who use Web3 products may lack sufficient sense of security and are afraid to put their assets in them.
3. High transfer risk: Due to the long address, when users transfer funds, they may only check whether the beginning and end of the address are similar before making the transfer. However, during the transfer, the target address may be tampered with, causing the transfer to be sent to the wrong address. It is even possible that the interaction type is tampered with, turning verification into a transaction. Without the user clicking “transfer,” the hacker can directly obtain permission and transfer the user’s cryptocurrency out of their account. In addition, the transfer target may not have any risk control data, and the target the user wants to transfer to may be a risk unit that has lost credit.
4. Data privacy: The data on the chain is public. If this data is user information, users will not want their privacy to be exposed.
To solve the above asset and data security problems, relevant processing needs to be done at the underlying and application levels: the underlying layer introduces the design concept of smart contract wallets, and most security problems can be solved without private keys or mnemonics. At the application layer, risk control models need to be introduced. For example, for the transfer of user ENS, transactions and reports, form some data for risk control, reminding users of the risk status of the target user to be transferred. When authorizing and transferring, multiple verifications are performed to ensure that the target address has not been tampered with, and DID is introduced to help users understand the person behind the target address is the real person that the user wants to transfer to.
The data on the chain is public. To solve the problem of data privacy, we need to use encryption technology to encrypt personal information and personal behavioral data, and only users who have their private keys can decrypt them. In addition, when a platform needs user data as a parameter for verification, this is no longer necessary under zero-knowledge proof. Users only need to answer whether the platform’s question is true or false, without telling the platform their actual age, for example, if the platform wants to verify whether a user is over 18 years old.
“Product Methodology of Yu Jun” mentions that users should be treated as fools, not allowed to think and choose, and their needs should be anticipated in advance by the product.
For all user actions, the product needs to have the ability to predict risks and remind users of risky operations. On the Web3 platform, products have no right to prohibit users from doing anything, but have a responsibility to remind and help users safeguard their data and property security.
3.4 Data-related Issues
In fact, today’s Web3 platform has excessively amplified the economic characteristics of transactions, allowing valueless projects like “Dogecoin” to thrive, while neglecting some of the most essential values of Web3, such as its social characteristics that represent identity and its interface with the real world. Today, we return to the essence of Web3, its most precious value, namely decentralized data.
Ideally, there would be no data isolation between Web3 products, and user data and attribute data would be integrated across different products. The user’s enriched data accumulation in payments, social networking, search, and all Web3 scenarios is richer than ever before. In Web3, the user’s rich data is no longer used by the platform for price discrimination, advertising, and other purposes that only benefit the platform, but is used to truly give users what they want and need. In the field of financial credit and risk control, user data has valuable value for both the platform and the user. However, today, users’ data in Web3 has many problems, which prevents the value of data itself from being fully utilized.
3.4.1 Lack of High-performance and Large-scale Data Storage
Based on the basic principles of blockchain, there is no doubt that blockchain is a very expensive storage resource, but dapps have a large demand for data storage. Having a chain that can ensure decentralized data and data privacy is crucial. Currently, the players in this track are IPFS, Arweave, and Filcoin, which are more file-oriented storage, and Ontology does not support high-performance large-scale data addressing queries, data computing, and data modification, which are the data needs of dapps.
Today, some social and gaming dapps are very eager to have such a data storage infrastructure that can decentralizedly store a large amount of data, meet high-performance data queries, and meet our storage needs for diverse data types (KV, relational, file, Graph) while ensuring data credibility and meeting high-frequency data change needs.
3.4.2 Data Privacy Can’t Be Guaranteed
The nature of blockchain makes the transacting parties anonymous, but transaction history and address balances can be clearly seen on the chain. I believe that in the future, as users’ relationships and data become more and more enriched on web3, identifying a person will become very easy. Many users certainly do not want their balance and transaction history to be seen by others, or their private data to be publicly visible. We hope that in the future, web3 can use some technology to help users choose what data can be made public and what data needs to be kept private.
3.4.3 Difficulty in Data Assetization
Web2 companies have made huge profits by leveraging big data and algorithm models because they have access to a large amount of user data. Today, we hope that such wealth can be enjoyed by users who provide data. However, currently, user data exists in a different sense of data isolation, and there is no unified protocol for data interaction between different ecosystems, as well as issues of data credibility, all of which hinder the transformation of user data into value.
3.5 Performance-Related Issues
If a web3 product has a daily active user count of millions in the future, it will need to support at least thousands of TPS.
There have been countless public chains that have challenged EVM in history. Can any public chain break Vitalik’s so-called “trilemma”?
4.1 Security Guarantee
4.1.1 Front-End Code Hosting
Currently, most dapp technology architectures are front-end heavy, interacting with the blockchain through scripts. Unlike the back-end, the front-end code can be changed on the user side, and hackers can implant malicious code attacks against dApp front-end, steal cookies, modify transfer addresses, change sign permissions, and more. Therefore, secure and reliable front-end code hosting is needed to ensure that when users interact with dApp through their web browser, it is an official secure build.
4.1.2 Perfect Risk Control
In Jason’s security and risk control article, we can see that due to the centralized custody, KYC, biometrics, and risk control strategies of Web2’s funds, even if you get someone’s Alipay account and password, you still cannot transfer the money out. Even if it is really transferred away, Alipay and banks can also freeze assets. Even if Alipay has the account password, it is difficult to transfer money. Even if it is transferred, it can be frozen by freezing the account after being identified as a dangerous behavior later.
Most people do not understand the complex signature content, contract functions, and other information, so appropriate tools are needed to help users identify risks: 1. Help users quickly understand risky operations 2. Help users judge the risk of interactive contracts 3. Help users judge whether the other party is trustworthy
4. Help users judge whether the signature is likely to be attacked and exploited.
4.1.3 Contract Security Guarantee
The code error of web2 may only cause a period of service unavailability, while the code error of web3 may cause huge asset losses. There have been countless incidents of asset security accidents caused by contract vulnerabilities in history, so it is necessary to have a complete code quality guarantee and audit process. Or is it possible to add a certain degree of fault tolerance to the code at the VM level today besides doing some guarantees at the code level?
4.2 The same user experience as web2
If we want web2 users to board web3 today, we first need to reduce the cost of replacement, which requires giving users an experience similar to web2. Vitalik mentioned the importance of wallets in user experience in his article “Some Personal User Experience”. The important idea of reducing replacement costs and improving user experience is to try not to let users perceive the characteristics of blockchain itself such as private keys, gas fees, cross-chain, etc. in the user interaction process. Hide the blockchain technology behind the game and application, and give users a simple and centralized experience in the front end, without feeling that they are interacting with the blockchain. The assets in games and applications related to the interests of users flow on the chain.
We can consider the following directions to improve user experience: 1. Simplify the entry process: For users who are not familiar with blockchain technology, the entry process of Web3 applications may be very complicated and confusing.
2. Ensure safety: Safety is a critical issue in Web3 applications. Therefore, all necessary measures must be taken to ensure the security of user data and transactions. Implement multi-factor authentication, encryption, and other security measures to protect your user information and assets.
3. Optimize performance: In traditional internet, RT (Response Time) is a very important technical indicator, which directly affects user retention and other business indicators. It is necessary to optimize the performance of on-chain interactions.
4. Minimize required steps: In Web3 applications, achieving general interaction goals generally requires more steps than large Web2 applications. Simplify the information required for registration and the number of screens that need to be navigated. Simplify the process as much as possible to make it faster, intuitive, and easy to use. Therefore, as the entrance to Web3, wallets are the most frequently used tool for user interaction, and are an important direction for experience optimization: on the security side, private keys can be sharded through MPC to avoid the risk of single-point failure; on the experience side, smart contract wallets can shield the existence of private keys, giving users the same login experience as Web2. Smart Contract Wallets, through multi-signature to improve security and stability, programmable access control can be compatible with complex business scenarios, batch processing of transactions, strong scalability, programmable recovery (social recovery) and other features can become technical solutions to improve user experience.
Web3 account and key separation. When the key is lost, you can replace the new lock through identity verification, non-custodial, no GAS, support for social recovery, multi-execute, flexible gas payment, and refined permission model.
Based on the technical characteristics of smart contract wallets, the following business goals may be achieved:
1. No private key experience: Allow social login: allow users to log in with their social media accounts (such as Google, Facebook, or Twitter). Help streamline the entry process and reduce user replacement costs;
2. Programmable access: Can support some complex B-side payment scenarios such as OA approval, DaoTool incentives, financial management, etc.;
3. Biometric signature: In combination with projects like worldcoin, biometric payment similar to Alipay’s facial payment can be realized;
4. Fine-grained permission model: Default operations, such as helping to switch networks, can be directly skipped, for large amounts;
5. Able to support offline authorization, multi-update and other offline operations. EOA has a characteristic that the program needs to be actively signed by the user to execute, and many technical solutions required by business scenarios need to be processed offline or executed concurrently. User-by-user authorization cannot make such technical solutions land. Users need to authorize a program to execute things within their allowed range for a certain short period of time;
6. Account recovery: Help users recover their wallets through social networks, reminder words, and other common web2 account recovery methods;
7. Contract linkage to real-world interfaces: for example, fiat currency is directly converted to U through BlockingyBlockingl and other payment tools, and virtual currency is transferred to the user’s address through a simple transfer like a bank transfer;
8. Gas proxy payment: After combining Layer2, when the gas fee gradually becomes low enough to be negligible, it can be paid through a third party or by the user.
Known players in the current track:
1. UniBlockingss conducts social recovery via email, and new users sign in directly through email, and an account is created directly afterwards
2. joy.id is bound to the hardware of the current device, and an account is generated based on the current device
3. Soul Wallet verifies the guardian’s email address on-chain for social recovery.
ZKP (zero knowledge proof) allows one party (the prover) to prove to another party (the verifier) that they know certain information about a value, without revealing any other information about that value. Based on this feature, it is used in two points in web3:
1. Privacy: User data is displayed in plaintext in the crypto world. DApps can use this data to perform business logic processing. If users do not want to disclose data, these business logics can also run normally while ensuring that the data is not leaked.
2. Proof: In the technical solution of the second-layer rollup, multiple transactions are compressed and packaged on-chain, but the validity of the off-chain cannot be guaranteed. Through the current track related technology:
ZkEVM: A technology that combines zero-knowledge proofs with the Ethereum Virtual Machine (EVM). It allows smart contracts to be executed in a privacy-protected manner. ZkEVM utilizes zkSNARKs (zero-knowledge succinct non-interactive argument of knowledge) to prove the correctness of the calculation without revealing any sensitive information. This makes it possible to verify smart contract execution without verifying each calculation step, thereby significantly improving scalability. ZkEVM focuses mainly on privacy and scalability in smart contract execution.
zkRollup: zkRollup is a second-layer scaling solution designed to increase the scalability of Ethereum by aggregating multiple transactions into a single batch and storing their encrypted proofs on the main Ethereum chain. In zkRollup, the rollup operator collects and verifies transactions offline and generates a succinct proof called zkSNARK to prove the validity of the entire batch. This proof is then submitted to the Ethereum main chain, reducing the computational and storage burden on Ethereum while maintaining security. zkRollup provides scalability benefits by reducing the number of on-chain transactions and associated gas fees while still ensuring the security of off-chain transactions.
ZKVM: “VM,” or “Virtual Machine,” is a virtual machine specifically designed for zero-knowledge proofs and cryptocurrencies. Its goal is to provide a platform that both protects user privacy and supports complex smart contracts, and almost all programs can run on zkVM.
4.4 Decentralized Data
4.4.1 Decentralized Storage
An application consists of programs and data, with the program being simple with only three steps: data acquisition, computation execution, and final result update.
We can see that two of the three steps in the program execution are directly related to data IO. Data is the most important part of the entire computing world, and the storage capacity, addressing ability, indexing ability, and high-speed IO ability of data determine the lower and upper limits of all aspects of an application. As mentioned earlier, the reason why web2 companies have such a large monopoly power is that the giants control user data, and we need some infrastructure to help users fight for ownership of data from the giants. Decentralized storage is the infrastructure for users to control data, ensuring data security and privacy.
In an ideal situation, the entire architecture of decentralized storage can be divided into the following layers from bottom to top:
1. Consensus layer: Ensure the credibility of off-chain data entering the blockchain world through an oracle, and solve problems such as data ownership and update consensus through the blockchain;
2. Immutable data layer: Or it can be called the cold data layer. The characteristics of this layer are large storage capacity, low data IO efficiency, and immutability. It mainly stores files;
3. Mutable data layer: On the basis of ensuring data storage in the cold data layer, through technical means such as rollup consensus or stream transactions, it provides the ability to update data while ensuring the principle of immutable cold data;
4. Data infrastructure layer: After having the ability to update data at the data layer, a trusted off-chain computing framework (web3 version of SBlockingrk and Flink) is needed to ensure the credibility of data computation. It is necessary to ensure user privacy on the open network, unify protocol and data standard specifications, improve the query capability of data through real-time + offline indexing, improve the IO capability of data through gateway services, and aggregate user data through data center to provide one-stop data services to maximize the value of user data.
Data decentralized storage is just the beginning of the revolution. In the long term, there are many problems that need to be solved:
1. Data consistency in the open network
2. Data privacy issues
3. Data modification conflict issues
4. Data inflation issues
5. Preventing malicious nodes
6. Data loss and retrieval issues
7. Ensuring data interoperability
8. Data governance issues: data integration and cleaning, data standards, data quality
9. A complete economic model of circulation and value flow among miners, platforms, and users
4.4.2 Data Credibility
Data credibility is a serious issue in an open network like web3. When traditional Internet companies use data, they don’t question whether the data is accurate enough or whether the source is real, because all the data used by Internet companies, from production to aggregation to processing and computation, all the core nodes of this chain run on their own servers, and the processing code is also deployed by internal members personally. It can be said that the entire data processing chain is crystal clear in front of the company, and there is no need to consider the issue of data credibility. What is more concerned is whether the data metric calculation is accurate.
However, today in web3, interacting with data outside the chain is an inevitable trend. Chain data can ensure data credibility and anti-censorship, so when introducing off-chain data, how to ensure the safety, accuracy, and credibility of off-chain data and make it participate in business together with on-chain data is an important technical solution. Oracle is the solution to achieve this goal, and data introduction is only the first step. In the calculation of data in the development network, how to ensure that the computing node does not do evil, and the data it calculates is a final credible data. In the on-chain system, EVM ensures the credibility of the results through consensus calculation. However, off-chain data generally has characteristics such as large amount of data and high computation demand. At this time, whether consensus calculation is a technical solution that balances cost and business needs needs to be jointly considered by everyone.
4.4.3 Data Middleware in Web3
Data interoperability, or the ability for different applications to share and use data, is of critical importance for the future of a data-driven world. It can break down data silos between applications, allowing data to flow across a larger scope and increasing the efficiency and value of data use. While current web3 dapps may eventually ensure that users own their data, the lack of standardized formats currently prevents smooth usage of data on other platforms once the data has been taken from the current platform.
One thing that users need help with is ensuring that the content they publish on one platform can be synchronized across all platforms and that their personal characteristic data can be used across all platforms. Data interoperability in a web3 environment is one of its core experiences. In this environment, the ownership of data belongs to the user, not the platform. This means that users have the power to control their data and decide which applications can access and use their data. This is a user-centric data model that respects users’ ownership of their data and makes data more secure, as only authorized applications can access data.
For example, off-chain storage solutions such as Filecoin and Arweave distribute data across various servers on the network by splitting and encrypting it, which is far less expensive than centralized storage. However, this data is not completely open and requires user authorization to be called, ensuring the security and privacy of the data.
Furthermore, IPFS second-layer solutions such as Ceramic can record events of applications and update the results to IPFS after a period of time, just like centralized clouds. This design makes the experience of decentralized applications (dapps) more similar to traditional applications. Ceramic goes further by introducing the concept of a data model, establishing a standard for data interoperability between applications and making cross-application data interoperability possible.
In the ultimate experience of Web3, the application matrix can achieve interoperability. In this matrix, users fully own their data, including social relationships and behavioral data. These data can be managed through some products, providing low-cost management for non-technical users, and inputting data into platforms through general APIs to train models and form personalized recommendations.
To achieve the business goals of data interoperability, platform-wide data updates, and data acquisition, a web3 version of data middleware is needed. While web2 data middleware is responsible for breaking down data silos and providing one-stop data governance, web3 version of data middleware provides unified data services for data querying and modification on this basis. Furthermore, because it aggregates all user data, it can provide user characteristic services after running algorithm models, which can be used for search and promotion that require user characteristic data services.
There are two main technical differences between Web 2.0 and Web 3.0 products:
1. Login authentication has changed from centralized username/password verification to wallet linking without a third-party.
2. The database has changed from centralized data storage, such as MySQL, to public decentralized data storage forms like blockchain and IPFS.
However, the technical details of Web 3.0 products are often displayed to users in a raw and exposed manner, and users are required to bear the risks associated with incomplete technology. To reduce the entry threshold for users into Web 3.0, these technical details must be improved and safeguarded by underlying infrastructure. Therefore, the development of fundamental infrastructure such as cross-chain, Layer2, DID, account abstraction, zk series (zkEVM, zkRollup), etc. requires full attention.
As a technical developer, I believe that the technical implementation of applications is not just for developers to challenge themselves, but to truly provide solutions to user pain points from the user’s perspective. From the user’s perspective, we need to think about the benefits of decentralization for users, not just centralization for decentralization’s sake. We need to balance decentralization and centralization based on business goals and user experience.
I believe that when Satoshi Nakamoto wrote the white paper in 2008, he definitely didn’t want crypto to be just a toy for a few people. The most essential things are the most precious value of crypto.