The Golden Age of Web3 Protocols: Unlocking the Potential of the Future Economy

Translator’s introduction:

**With the rapid development of the Internet, centralized platforms have gradually dominated the entire network, forming a pattern controlled by a few giants. While this model does bring a range of conveniences, it also leads to issues such as data privacy, opaque decision-making, and algorithmic manipulation. **

**In this context, blockchain and cryptocurrencies represent a movement back to open, transparent protocols. As the original blockchain, the Bitcoin protocol not only achieves decentralization in technology, but also makes innovative explorations in economic and governance design. The built-in token incentives make it almost unstoppable. As Ralph Merkle said, Bitcoin survives because it pays people to keep it alive; it provides a useful service that people are willing to pay for. **

**Building a decentralized, decentralized network (Web3) based on an open and transparent, especially decentralized tokenization protocol, is regarded as a key direction in reshaping the Internet landscape. This model is expected to reduce reliance on centralized platforms and stimulate global innovation and competition, but it also needs to overcome a series of challenges, including continuous improvements in scalability, regulatory compliance, and user experience. **

‍‍USV (Union Square Ventures)’s current investment philosophy is:

** Support trusted brands by leveraging networks, platforms and protocols to expand people’s access to knowledge, capital and well-being. **

That last term (i.e., "agreement"), while significant, is unfortunately less understood than the other terms in the sentence.

Agreements have always existed. They are norms that people abide by each other. ‍‍‍‍‍‍‍

In computer science, a protocol is similar and is a code of conduct.

I like this definition of computer protocols from the Cloudflare website:

**Standardized protocols are like a common language that computers can speak, similar to how two people from different parts of the world may not understand each other's native language, but they can communicate using a common third language. If one computer uses Internet Protocol (IP) and a second computer uses the same protocol, they will be able to communicate - just like the United Nations relies on its 6 official languages to communicate with representatives from around the world. But if one computer uses IP and the other doesn't understand the protocol, they won't be able to communicate. **

Protocols have been around as long as computers have, but we are at the beginning of a golden age of protocols that I call "Web3". **

Until recently, protocols were mostly free with no monetization. We use the HTTP protocol to access web pages every day. We use the SMTP protocol every day to send emails. However, these protocols are free to use and will not generate revenue for any company, project or individual.

**With the emergence of Bitcoin in January 2009, we got a protocol with a monetization mechanism built into it. **

Since then, computer scientists have been creating Web3 protocols for a variety of things, most of which include tokens used to monetize the protocols.

**Monetization is not just about benefiting the creators of the protocol, it is also used to incentivize the usage and operation of the protocol. **In the Bitcoin protocol, this includes running mining computers to maintain the security of the Bitcoin network. In the Helium protocol, this includes operating hotspot devices to connect to the network. In the Ethereum protocol, this includes staking tokens to ensure the security of the network. In the Filecoin protocol, this includes operating storage systems to provide decentralized storage. These measures encourage active use and smooth operation of the protocol.

It is through monetization that these protocols are sustained and provide a reliable foundation for others to use and build upon.

With sustainable and trustworthy protocols, we will usher in a new service architecture that will be more interoperable. ‍‍‍

Let’s take mobile messaging as an example. Most of my friends and family use iPhones, and I use Android. However, messaging between iPhones and Android phones isn't ideal. Many people around the world use WhatsApp for mobile messaging, but WhatsApp can't communicate with the iPhone's messaging app, and neither can Signal, which doesn't communicate with WhatsApp, and the cycle continues.

It would be a completely different story if every mobile messaging app was built on monetizable protocols that benefited individuals and companies for operating them, and developers had incentives to earn revenue by building them . All our mobile messaging apps will be able to communicate with each other.

In the coming decades, every computing field will experience similar scenarios as the Web3 protocol is designed, built, released, and widely adopted. Even though we are in the early stages of the golden age of protocols, there are already many protocols that are excelling in the world of decentralized infrastructure and decentralized finance.

It’s disturbing to me that agreements have so much potential, yet understanding of them is so limited in the media, mainstream society and governments.

Recently, the White House released a document claiming that “cryptoassets do not currently contribute to broad economic benefits,” seemingly indicating that Web3’s economic impact on the United States is not significant. Although the economic benefits of Web3 are not widespread today, their potential is considerable and will eventually impact every economy and market. However, being negative about their development won't make them go away, and that's a thankful fact.

原文：What is a protocol and why does it matter?

Seal: Unsplash@Joshua Sortino

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