“When I was your age, we didn’t even have the internet!”

The famous saying modern-day parents scream at their phone-addicted children while telling them to go play outside is starting to become outdated.

The internet is once again experiencing a seismic shift.

Cryptocurrency. Blockchain. It’s obvious to many that a new generation of technology has made its way into the ethos. (I mean, digital money!? Whaaaat!) These are just two elements of a technological revolution that is bringing about a “new internet” we call Web3.

Web3 is an idea that aims to revolutionize web2 through a process called decentralization.

Web2 refers to the internet we use today. Its focus is “user participation.” What does this mean? Think of Social media. Under a web2 system, creators can create content, and post through an intermediary (Facebook, Instagram, Youtube, Tiktok). Don’t we love Youtube and Insta? What’s the issue?

The problem is that this means intermediaries own your data.

They can censor you. Remove you. Charge you for membership. Sell your information to third parties. Run ads on your content and siphon off revenue. When you produce content, you are essentially transferring ownership in exchange for publication.

Web3 is a culture that places emphasis on user freedom by way of user ownership. Because a single organization doesn’t hold complete control over information, the control of data lies in the hands of creators, not intermediaries.

HOW DOES THAT WOOOORK?

Blockchain is the technology that lies at the core of this “Web3 culture,” since the technology allows for this decentralization of information to occur.

Cryptocurrency is the so-called “financial application” of blockchain under the Web3 movement. In tandem, cryptocurrency and the blockchain allow for permissionless transactions to occur without the interference of traditional intermediaries like banks: all that’s required are the two parties. The blockchain will then store the transaction data and distribute a copy to every computer in the network, ensuring that there’s not one governing member.

But while cryptocurrency is the “money” element of web3 culture, other applications utilizing blockchain technology have emerged, such as tokenizing real estate: this not only allows owners to fractionalize their assets (assign value and sell parts of the real estate asset as opposed to having to just sell the whole). It also allows sellers to trade more easily and with global reach because it potentially increases liquidity. We’ve also seen the web3 culture penetrate the gaming industry: gamers are getting paid to play games instead of paying to play (a concept called play to earn). They can also tokenize merchandise and sell it in a digital marketplace as unique collectibles (NFTs).

Uh Oh… China 

The fact that web3 is becoming a large part of the technological future raises the question: Where does China fall in all this? They’re lurking… aren’t they? Aren’t they always ready to overtake the western world in everything?

Nah. They hate it.

While they don’t hate the technology itself, they hate what it stands for.

The whole concept of decentralization is centered around transferring power from established institutions to the individual creator. If you think about it as a philosophy, web3 is centered around individual freedom… democracy, if you will.

The CCP isn’t very fond of this, and while they see the economic opportunities in exploiting systems that can be built on web3 platforms, they’re taking measures to restrict it as well.

One of these measures is the banning of cryptocurrency altogether, the justification being that decentralization initiates “financial instability.”

What this really means is that it allows individuals to avoid capital controls on finances by helping them avoid banks.

The Chinese opinion of Web3 highlights an interesting relationship between a country’s political philosophy and its treatment of new technologies… making the emergence of a new era of technology all the more exciting to observe. To a government that has historically imposed strict regulations on its citizenry, technology that makes it easier for people to operate independently from the government isn’t very appealing. 

So… what should people look out for?

Nowadays, it’s impossible to separate China from anything revolutionary happening in the world. The reality is, they will be involved in anything of global consequence. And that’s important for everyone to know.

Just because China doesn’t like the philosophy behind web3 doesn’t mean they don’t want to engage in it. They know doing so will cause them to fall behind in a new era of economic development.

So, instead, they’re putting their own little spin on it.

China opposes public access to a blockchain system because of its decentralization. However, they’ve instituted their own, state-backed version of a blockchain, called the BSN-DDC, which abides by all government regulations and remains crypto-free. It’s significantly different from major blockchain networks in the US in that it is open-permission, meaning it requires permission from the administrator to be accessed. 

The platform is a ledger for the Chinese version of NFTs, which are called Distributed Digital Certificates (DDCs).

And it’s growing. According to Forbes, there are 681 NFT platforms currently operating in China.

Ultimately, China is finding a way to engage in this tech revolution without violating its political goals.

My Take:

Although China’s web3 ecosystem has, and probably will remain forcibly isolated from the global ecosystem, it’s something to pay attention to. The future of the internet is coming… and the way the two greatest economies in the world engage with it will have important implications when it comes to how blockchain is used to change economies, and possibly strengthen citizenries.

As China continues to develop as a global operative, its engagement in global tech revolutions can have important indications as to how it might continue to grow in the future.