Dear Web3 Academy DOers!
We need to talk about wallets!
We believe that Web3 wallets are going to become our identity…
The place where we keep our money, credentials, art and even grocery receipts.
It is also going to act as the portal to the world wide web, granting us access to all of the existing applications.
It’s going to take some time to achieve that spot, but we’ll get there slowly but surely!
Let’s dive into what a Web3 wallet is, its benefits and why it’ll become the means through which we express our identity.
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If not, what the hell are you waiting for?
What Is a Web3 Wallet
A Web3 / crypto wallet, also called a non-custodial wallet, is a decentralized wallet that allows you to store crypto assets and access Web3 applications. MetaMask, Coinbase Wallet or Phantom are just a few examples of the existing Web3 wallets. Because of its size and popularity, MetaMask will be the only one I refer to throughout this article!
First of all, let’s establish what the hell “non-custodial” means…
Think about your bank account. To keep it safe, the bank keeps custody of your assets. A crypto wallet on the other hand doesn’t have that option. It is up to you to manage and custody your wallet through securing your keys.
The keys to your wallet are typically formed of 12 or 24 random words that grant you access to your wallet. In real life, to access your account, you need to go and ask permission from the bank. In crypto on the other hand, you just access your assets through inserting your 12 words (aka secret phrase).
The whole idea of this process is to give the user 100% power over their assets. However, it is tricky to handle your secret phrase. Where do you store it, what if you lose it? Some people have to go to extremes to keep their funds safe.
Example: Vitalik Buterin has divided his 24 words in 3 parts and stored each part in a different country, so whenever he needs access to his wallet, he has to travel to three countries before being granted access.
Storing your private key/secret phrase can be a real pain in the ass but it’s the price we pay for freedom!
The Benefits Of A Crypto Wallet
Now that you’re roughly familiar with a Web3 wallet, let’s discuss its benefits.
- Interoperability
- Privacy
- Convenience
- Transparency
1. Interoperability
Aren’t you tired of creating an account for each and every website you want to access?
The existing features of “Log in with Gmail” or “Log in with Facebook” have been invented for that precise reason: to remove the excess need for multiple accounts.
Similarly, that’s what crypto wallets aim to solve too, like MetaMask which enables access to any application built on Ethereum and other EVM chains. You can access DeFi (Curve, AAVE, etc.), DEXs (Uniswap, Sushiswap, etc.), NFTs (Opensea, Looksrare, etc.) and so much more without needing to create any additional accounts apart from your one MetaMask wallet.
Right now, there are limited existing applications but new protocols are built everyday and this will only continue. We believe that in the not so distant future, we’ll be able to log in with MetaMask (or other wallets) to a lot more applications than we imagine at the moment.
2. Privacy
A crypto wallet represents you but keeps you anonymous behind a public address. All of your activity is transparent on the blockchain but your identity is visible only for those you choose.
First of all, you do not need to submit any personal information for creating a crypto wallet!
Second of all, the problem with the existing technologies (looking at FB and Google here) is data manipulation. Big tech corporations run on the business model of gathering your data and selling them to the highest bidder.
Theoretically, a crypto wallet allows you to access any application without the need of submitting personal information like race, color, age or sex. This would increase the level of privacy, something that is growing in demand dramatically.
That said, everything in your Metamask wallet is on a public ledger, so there is some debate between how private this will end up being. Tools like Disco.xyz aim to merge on-chain and off-chain data so our identity and data can be as private is we want it to be in Web3. Check out our podcast with the CEO of Disco here to learn more.
3. Convenience
Imagine if you could replace all your current accounts (including your bank and email account) with a crypto wallet. You’d have all your funds on that wallet, you’d be able to log in to any social media account with that wallet (no more need for passwords), you’d be able to access crypto products, you’d be able to apply for jobs and universities with that wallet and you’d be able to store all your achievements in that wallet. It would be convenient wouldn’t it?
Let’s explore this further…
- All funds in the same place A crypto wallet allows you to keep your stablecoins (FIAT currencies) and your crypto in the same place, safely, without any limitations, government seizures or hacking risks because you own your private keys to that wallet!Naturally, that wallet allows you to spend the money through sending or making online payments. Unfortunately, not many sites accept crypto payments, yet!
- Log in anywhere For reference, In Sweden, every citizen has an application called BankID, which allows you to log in to any financial institution. If you want to pay your bills, access your bank account or take a loan, you need to approve every move with your BankID. Similarly, that’s how a crypto wallet works. Further benefits are that the wallet allows you to log in on any social media or online websites as well. Well, not yet, but we’re heading towards that reality and it looks like Twitter will implement this first. (In the meantime, we’ll use Lens Protocol :D)
- Apply for jobs and keep your achievements Isn’t it a hassle to keep track of all your completed courses, degrees and diplomas? With a crypto wallet, you can theoretically receive a token (an NFT), that will prove your completion of certain duties like LinkedIn courses or even a university degree. With this NFT, you can apply for a job (using your wallet to log in) and the employer will automatically see your achievements.To take it one step further, employers could gate their applications to only those who hold a specific credentialed NFT (ie. truck drivers who have their truckers driving license or servers who have their smart serve license).In real life, diplomas are much easier to fake than NFTs, not to mention NFTs have the ability to be programmable whereas your paper diploma does not. Therefore, this will ensure trustworthiness and it will also make the application way smoother (a few clicks tops), removing the need for reviews and physical submissions of documents. All of that would be replaced by a smart contract.
Transparency
Because a crypto wallet is connected to a blockchain, all of its transactions are tracked, stored and made visible for everyone. However, you could only see someone’s record if you knew their wallet address or ENS name. This seems unreal but it was recently proven when everyone could see Luna’s transactions (aka panic selling their Bitcoin), Celsius’ wallet which was almost liquidated and Optimism’s failed transaction which resulted in a massive hack.
Flex on people
Right now, people flex with their watches, cars and watches. However, Gary Vee predicts that people will start flexing with their wallet address instead.
Making your public address known will let everybody see what NFTs you hold and how much money you have. There’s no need for you to buy a car and drive to every single friend of yours to show off, you can just send the address in the whatsapp group.
And…
If you want to remain humble, just don’t share your public address with anybody else. It’s totally up to you!
Let’s Imagine a Scenario
You are a website developer who just created a complex website for a big company. For your services, you received $100.000, paid in USDT, to your MetaMask wallet.
First of all, you need to pay your fair share to the government, so you go to your government’s tax agency, log in with Metamask and pay the 20% ($20.000) that you owe, through making a few clicks and approving the transaction from your phone.
Then, you think about your future and you’d like to invest some of that money into cryptocurrencies, so you go ahead and buy $10,000 worth of Ethereum and $10,000 worth of Bitcoin on Uniswap (where you logged in & approved the transactions using your MetaMask).
Now, you have $60.000 left…
You decide to move to Spain to be a barista for the summer but you realize that you don’t speak Spanish nor can you make latte art… So, you go ahead and sign up for a Spanish course and a barista course (for which you pay in USDT using your MetaMask wallet). Upon completion, you receive 2 NFTs… 1x Barista NFT and 1x Spanish course NFT.
You go on your government’s website, you log in with MetaMask and let them know that you’re moving out to Spain for 2 months to make sure you do not pay taxes in 2 different countries (sorry American passport holders, I know this rule doesn’t work for you!).
You now pack your bags, buy a flight ticket (using USDT from MetaMask) to Spain and upon arrival, you apply for a job at a coffee shop in the center of Madrid. You show them your two completed courses (in NFT form), they check the blockchain and acknowledge that you’re skilled enough to work there.
I could go on and on with this, but I think you get the point…
Conclusion
Because of all of the benefits named above, we really believe that your crypto wallet has the potential of becoming your identity.
However, the scenario above is likely years to decades away from reality. Unfortunately, big tech and governments will likely stall innovation and adoption because this is bad news for them. They mostly rely on owning and manipulating your data and money, something they’ll lose control of thanks to Web3 tools.
Saying that, it is worth mentioning that those who won’t adapt will get disrupted, just like what happened with the rise of the internet. It is, however, only our humble opinion.
For now, I’ll use my wallet to store my digital belongings and access web3 applications but I’m hoping to apply for a job or even a university degree with my wallet in the near future…
Raul Chisluca Content creator at Web3 Academy & Copywriter at Impact Digital MarketingTwitter
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