IN THE KNOW WEB3 – NEXT PHASE OF THE WORLD WIDE WEB (EXPONENTIAL AGE)
ISSUE 2
A PRODUCT FROM
IN THE KNOW
ISSUE 2 | WEB3 – NEXT PHASE OF THE WORLD WIDE WEB
At St. Cloud Financial Credit Union, the Executive Team and Board of Directors are dedicated to actively listening to our valued members. As a not-for-profit financial cooperative, we have the unique advantage of being able to diversify our offerings to cater to the needs of a wide range of individuals, rather than just a select few. It is this spirit of attentiveness to our members that inspired us to launch our educational publication, "IN THE KNOW: Web3 Technology & The Digital Transformation of Money." Through our annual survey, we discovered that approximately one-fourth (20%) of respondents expressed a This demand for information from our members, coupled with the anticipated technological advancements over the next five years, reminded us of our responsibility to act as financial educators. Furthermore, the Board of Directors, in collaboration with the Executive Team, has formulated a Digital Asset Strategy to pave the way forward. strong desire for more information on Digital Assets (Crypto), Blockchain, and Web3. These individuals either owned crypto, planned to invest, or wanted to learn more about the tokenized industry before investing. 1. Listen to our members 2. Educate members, staff, and the community 3. Safe Storage of Member Digital Assets (Coming Soon “CU – Digital Asset Vault”™) 4. Transactional capabilities for members to buy & sell Digital Assets Rooted in the needs and desires of our members, this strategy encompasses four key pillars: We recognize that not all members may have an interest in learning about or engaging with the Blockchain and Digital Asset (Crypto) space, either currently or in the future, as we might anticipate. Just like with any other product or content we introduce. We understand and respect that individual preferences and interests may vary. However, considering the significant member interest in this area and the abundance of publications from esteemed financial authorities, such as the NCUA, in recent years, we believe it is our responsibility to offer impartial, fact-based education for the sole purpose of facilitating learning. We neither advocate for nor oppose blockchain, digital assets, or cryptocurrencies. Our objective is to equip our members with knowledge surrounding a subject that could potentially impact all of us to varying degrees as we progress forward. We are steadfast in our commitment to consistently serve our members and adapt to their needs, both in the present and the future. Since our inception, we have diligently managed our members' wealth and acted as a trusted custodian of their value as needed. Regardless of the size or scale of your assets, it is our duty to empower you in safeguarding the rewards of your hard work today and for years to come!
WHAT IS WEB3? AN EVOLUTIONARY LEAP
The internet as we know it has undergone significant transformations since its inception. We started with Web1.0 - a static, read-only internet. Then came Web2.0, bringing interactivity, social media, and user-generated content. Now, we are entering the era of Web3, which promises a more decentralized, user-controlled web. Web3 represents the next step in the digital revolution. It seeks to create a decentralized web, reducing the control centralized entities like corporations or governments have over our online experiences. Key Features of Web3: Decentralization: Central servers are replaced by nodes in peer-to-peer networks. This approach removes the need for intermediaries, ensuring direct, user-to-user interactions. 1. Trustless Transactions: Thanks to blockchain technology, Web3 doesn’t rely on trust. Instead, it uses cryptographic proofs to ensure transaction integrity. 2. Interoperability: Web3 aims for a seamless online experience, where different platforms, systems, and blockchains can exchange data without hitches. 3.
The underlying philosophy of Web3 is about returning power to the users. In a Web3 world, you own your data, your digital assets, and even your online identity. Unlike the current web, where your data is often stored and monetized by platforms without your explicit permission, Web3 aims to rectify this power imbalance.
ISSUE 2 | NEXT PHASE OF THE WORLD WIDE WEB
BLOCKCHAIN: THE BACKBONE OF WEB3
Blockchain is the bedrock upon which Web3 stands. But what exactly is it? At its core, a blockchain is a digital ledger. However, unlike traditional ledgers, it’s distributed across countless computers worldwide. Key Aspects of Blockchain: Immutability: This feature ensures that once data gets recorded on the blockchain, it’s nearly impossible to change without the consensus of the network. 1. Transparency: Every transaction on the blockchain is visible to anyone who wishes to see it, ensuring a level of transparency unprecedented in the digital world. 2. Consensus Algorithms: These cryptographic methods, like Proof of Work (PoW) and Proof of Stake (PoS), ensure all nodes (or participants) in the network agree on the validity of data. 3. The potential applications of blockchain are vast: from supply chain tracking to voting systems, and of course, digital currencies like Bitcoin and Ethereum. As industries begin to understand the value of a transparent, immutable, and decentralized system, the adoption of blockchain in various sectors continues to grow.
ISSUE 2 | NEXT PHASE OF THE WORLD WIDE WEB
SMART CONTRACTS AND DAPPS: CHANGING HOW WE INTERACT ONLINE
One of the most transformative aspects of Web3 is the creation and implementation of smart contracts and decentralized applications (DApps). 1. Smart Contracts: These aren’t contracts in the traditional sense. Instead, they are self-executing contracts where terms of the agreement or conditions are written into lines of code. Once conditions are met, the contract automatically executes itself.
The impact of smart contracts is already being felt across industries. In the world of finance, they can streamline complex processes, reduce costs, and enhance transparency. In real estate, they can simplify property transfers. In the creative industry, they provide artists with more control over their work. DApps, on the other hand, promise a decentralized future where applications are not at the mercy of centralized platforms that can ban or restrict them arbitrarily. Together, smart contracts and DApps are paving the way for a more transparent, efficient, and democratized digital world. 2. DApps: Unlike traditional apps that run on centralized servers, DApps run on blockchain networks. This ensures they are not controlled by any single entity and are resistant to censorship.
This publication by St. Cloud Financial Credit Union and/or its employees is not personalized investment advice and is provided without considering the recipients' individual investment objectives, intentions or means. It is intended solely for educational purposes and does not constitute a recommendation or endorsement of any kind. Any commentary expressed in this publication from St. Cloud Financial Credit Union and its employees, is solely for educational use and should not be relied upon as advice. St. Cloud Financial Credit Union and its employees cannot guarantee the validity or accuracy of the information.
ISSUE 2 | NEXT PHASE OF THE WORLD WIDE WEB
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