Omid Malekan is an author and adjunct faculty in cryptocurrency and blockchain technology at Columbia Business School, where he lectures on blockchain and crypto. In the latest episode of citiesabc YouTube Podcast, Hilton Supra, Vice Chairman of Ztudium Group, interviewed Omid to discuss the key features that make up the foundations of blockchain technology and Web 3.0. The podcast is powered by openbusinesscouncil, fashionabc, and Dinis Guarda.
We live in a fast-paced world that is accelerating toward the mainstream adoption of Fourth Industrial Revolution (4IR) technologies, the metaverse, and Web 3.0. What is common in all these paradigm shifts is the underlying layer of blockchain technology.
The distributed and open-source nature of the blockchain, unique features of NFTs, and property rights-enabling Web 3.0 were some of the focus areas of this latest interview. Omid Malekan explained how a 'trustless' protocol of blockchain technology is responsible for creating a decentralised framework for all the interactions that take place in Web 3.0.
"The beauty of a decentralised ecosystem is that it is more trustworthy because you can trust the system without having to trust any of the participants. This is in contrast with how banking works", he told Hilton.
Blockchain reintroduces trust into digital interactions
Since its discovery, money is a way that people around the world utilize to trust each other and do business. All financial institutions are institutions of trust. They don't really provide a service, like an airline, but they facilitate buyers and senders or lenders and borrowers being able to trust each other enough to financially interact.
However, with time, the loopholes that existed in the crevices of the system grew larger and started failing in the face of digitisation. This was when blockchain technology established a trustless system of interactions.
"It means that you trust the outcome without having to trust anyone or anything. The bitcoin blockchain is trustless, because if I send you a bitcoin, you don't need to trust me, and you also don’t need to trust the various players like miners and wallet providers. But you can still trust that you can get that payment. More recently, this has been expanded to DeFi and digital identities", explained Omid.
NFTs for royalties and utilities
Bitcoin, however, is a fungible entity, much like fiat currencies. This means that its individual units are interchangeable and equal in value. Any given Bitcoin is worth the same amount as any other Bitcoin, regardless of its history, origin, or ownership. This makes it easy to trade or exchange. This very nature of Bitcoin makes it an ideal form of digital money and an attractive investment option for many.
Non-Fungible Tokens (NFTs), on the other hand, are unique digital assets that can be bought, sold, and traded on the blockchain. By tokenizing digital media and art, creators can easily and securely track and manage their works, and receive royalties when they are sold. This new system has the potential to revolutionise the way creators monetize their work and how consumers buy and sell digital media.
Further, NFTs represent ownership of digital items such as art, collectibles, and gaming items. Because of their unique properties, NFTs can provide a wide range of benefits, including allowing users to track and verify ownership of digital items, creating digital scarcity that can increase the value of digital items, and creating a secure and immutable form of digital asset ownership.
"NFTs is a relatively new idea of digital assets that resonated with people. They really took off for art collectibles. But on a blockchain, you can do more with them. Some of the more interesting things include introducing royalties. But, what's happening now is that the idea of NFTs is now being applied to things that don't have as much value, but have a lot of utility. The applications of using this technology for things like identity verification, credentialing", Omid shared with Hilton. He also shared many examples from his deep research to support the argument.
Web 3.0 is an internet with property rights
Talking about NFTs and smart contracts, the discussion steered towards related topics like Web 3.0 and the metaverse. Still in its infancy, there is no robust definition of what Web 3.0 is. However, Omid explained that Web 3.0 is the evolved version of the internet where users have complete control over their data and digital assets. He told Hilton:
"It is an internet of property rights, where individuals are given the power to own, access, and control their data, digital assets, and other digital items. You can replicate all of the digital assets like social media accounts in Web 3.0, because of things like NFTs, and smart contracts. This ability to own and control the data allows the creators to monetise and trade their digital assets in the same way they can with physical items.”
Hilton and Omid concluded the interview with a thought-provoking idea: the intersection of Web 2.0 and Web 3.0 features. Although “messed-up”, as they call it, “things will have to evolve for financial avenues, securities, and many more aspects.”