Why a web3 wallet is your identity

Transcript

what's up friends welcome to web3 academy a place for entrepreneurs creators and marketers to explore and learn how to use web 3 to transform business models and create thriving communities enjoy this next episode [Music] gmgm what's up it is web 3 academy this is a deep dive i am jay hamilton uh your host today and we're going to be deep diving into web 3 wallets crypto wallets web 3 wallets uh maybe even just wallets if you're in deep in the web 3 world these wallets are quickly becoming

a core piece of the web3 ecosystem uh and have the potential to be much much bigger uh than what they are today and so we wanted to take a second to talk about that uh one of uh our teammates over at web3 academy raul has written an article called your web3 wallet is your identity i couldn't agree more it is going to be your identity i'm not sure it's quite there yet and raul really breaks down why it's going to be your identity and what the future has in store and so i'm going to read this article on

today's podcast and add in a little bit of my own thoughts and flavor to give you an idea and learning of really what is a web3 wallet what are the benefits of a web3 wallet we're going to talk about interoperability privacy convenience transparency and then we're going to talk about a scenario of what the future might hold uh when our web 3 wallets really are our identity and what that can mean so excited to jump in uh yeah let's let's get right into it 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 our groceries receipts it is also going to act as the portal to the world wide web granting us access to all of our existing and future applications it's going to take some time to achieve this but we'll get there that's for sure so let's dive into what is a web3 wallet what are its benefits and why will it become the means through which we express our identity what is the web3 wallet first let's just get some terminology here so i might say web3 wallet or crypto wallet these words are interchangeable you

might even i might even just say wallet i certainly know that now i use the word wallet and when i say wallet i don't actually mean my physical wallet i usually mean my metamask wallet but let's talk about what are these things so a web3 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 one wallet that i refer to throughout this podcast first of all let's establish

what non-custodial means think about your bank account for a second so to keep your bank account safe and your assets 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 assets in 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 or 24 word which is often called your secret phrase or your seed phrase so this secret phrase or seed phrase is the lock the key to unlock access to your wallet now one thing that's important to understand is there's different wallets that are available different apps different dapps so there's a metamask wall there's a coinbase wall phantom argent there's many different ones rainbow there's so many and more and more coming out now

the wallet is just this this is this metamask or coinbase these are just an application through which you access your private keys on the blockchain so in other words you could use metamask and coinbase wallet two different wallet applications to access the same assets because your assets are stored on the blockchain and your secret your seed phrase or your secret phrase is the key through which you access those assets in order to move them trade them

transfer them and do those types of things okay so that's important to distinction understand as we have the application and then we have our assets and what we do is we use these applications metamask to to move around these assets but the custody of these assets is ours so nobody else has custody of the these assets and the reason we have custody of these assets is because they're held on the blockchain and it is only our private keys that allow us to access those assets so nobody else has custody of those assets nobody can take them away from you no nobody can remove your ability to access them they are purely

yours so the whole idea of this is to give you the user 100 power over your assets uh now yes this might be a little bit tricky because handling your secret phrase or your seed phrase with great power uh comes great responsibility so where do you store it what if you lose it some people have to go to great extremes to keep their funds safe for example vitalik buterin the founder of ethereum has divided his 24-word seed phrase in three 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 so you know storing of your private key or your seed phrase it can be a real pain but it's the price that we pay for freedom it's the price that we pay in order to have full ownership full custody of our assets so what are the benefits of a crypto wall and there's many many benefits and and many of these benefits are so new that we're still discovering them right we're still in that phase of innovating on this blockchain technology that you know what are the benefits now will become will are just the beginning five years from now 10 years from now

there's going to be benefits that we don't even know about and think about so really there's four main benefits interoperability privacy convenience and transparency and let me walk through each one of those so first is interoperability if you're like me you're tired of creating an account for each and every website you got to create a new account you got to create a new password you got to remember that password you got to manage it in a password management way or what you might do is you might use login with gmail or log in with facebook and

basically these gmail or google and facebook invented these login it for the prefix reason to remove to make it simpler to improve the user experience of you logging into multiple sites so you don't have to remember multiple passwords because it's a royal pain in the ass right um well similarly crypto wallets or web3 wallets aim to aim to solve this in the exact same way so you will be able to access websites by just using your metamask or whatever wallet you use you'll be currently

this is very much seen and when you go to a website it says connect wallet right so you can connect your wallet and then you can access certain functionality on that website because you have connected your wallet um so you can access defy and curve ave you can access decentralized exchanges unit swap sushi swap you can access nft marketplaces open c looks rare and so much more without needing to create any additional accounts apart from your one meta mask wallet right now there are limited existing applications uh that are using this connect function but new protocols are being built every day and this will only continue right so

we believe that really in the not so distant future we'll be able to log in with metamask or the other wallet to a lot more applications um that are currently available one example of this is social media so currently uh we have multiple social media accounts you have your twitter account your facebook account your instagram account i guess twitter sorry facebook and instagram is the same account but you have you know multiple oh actually no they're not they're different they're different logins so you have multiple social media accounts wouldn't it be nice to have only one social media login well lens protocol is a protocol that is being built to be the social graph on which we build web3 social media and

essentially with lens you log in you connect with your wallet and by connecting with your wallet you can access your social graph across any of these platforms so i can log in to if there was a web3 version of twitter i could log into twitter and i could see and similarly if there was a web3 version of youtube i could log into twitter and i could see my followers from youtube or see my followers or see the videos that i like and it would all be interoperable so a big part of what these wallets unlock is this interoperability where i can take my

relationships i can take my fans and my followers and my content i have ownership over it all and i can easily take it across all of these platforms second benefit 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 so you do not need to submit any personal information for creating a crypto wallet it's a big big thing right now if you want to create a bank account and store assets in a bank account you need to give them all of

your personal information the kyc you do not have to do that with decentralized wallets there are some centralized wallets that require you to do that but those are not arguably part of the web3 movement second of all the problem with the existing technologies so looking at facebook and google is data manipulation so big tech corporations run on the business model of gathering our data and then selling it to the highest bidder so 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 as we want it to be in web3 and i recommend you check out our podcast from a few weeks ago with evan mcmullen the ceo of disco to learn more about on-chain and off-chain identity but essentially what happens with your with your wallet with your crypto wallet is that all your

assets are stored on chain and anybody can look look them up using your public keys so they know your public key they can look up your assets now it doesn't mean that they know who you are though it's still anonymous right so what that allows is it allows transparency to the activities that you take on chain the activities you take with your assets with but you're still anonymous because nobody knows who who you are behind that wallet address so it's it's a new way of looking at privacy in a sense it puts privacy back

in the user's hands and you can decide how much you know do you want to buy an ens domain and if you purchase an ens domain so i own j hamilton.eth and then what i've done is i've attached j hamilton.eth to one of my wallet addresses one of my public keys so now anybody can go look at jhamilton.eath and they can see the nfts i own they can see the assets i have in that wallet but only in that wallet i have other wallets which i do not share the public keys for those wallets so nobody knows that i own those wallets but they can see again they can see the assets they can see the transactions

just with anonymity uh of the ownership of those third benefit to your crypto wallet is convenience there's massive convenience that comes here imagine if you could replace all your current accounts you know your bank your email all your all your online logins oh my gosh hundreds hundreds and hundreds of accounts with one one wallet and unlike it being you know log in with facebook or log in with gmail which in that case you're giving up a lot of data to facebook or to gmail which then they sell for ads

imagine if you could do it where you can use your crypto wallet as your login and you own the the assets you own that id so you'd have all your funds on that wallet you'd be able to log into any social media account with that wallet no more need for passwords and 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 like wouldn't that be so convenient so like let's explore this a little bit further because there's it's just truly incredible how much we how much of our identity and not just our digital identity also our irl identity we can store

in these wallets because of the technology of blockchain so a couple different use cases and examples one is all funds in the same place so a crypto wallet allows us to keep our stable coins uh and our crypto in the same place safely without any limitations without any worry of government seizure uh because you own your private keys to that wallet so if you're in a country you know i i live in canada fairly safe in terms of government control but let's say you live in china where they the government control is very strong and they will seize your assets

if they believe that you are in bad standing with the government's viewpoints and with their um you know communist regime so you have to be safe well you know if you had your assets with a bank account and then your government sees them that would be i can't even imagine that that level of in insertion into personal freedom and personal rights is beyond anything i can understand so what we're doing here is we're allowing people in countries like that to have control of their assets and now the government cannot seize your assets the government is not able in no way

can the government access those recently or maybe not recently but about six months ago in canada there was uh a protest uh against uh covet regulations the government was pushing down a lot of coveted regulations and restrictions on our citizens and people were not happy about it and so there was large protests and by all means protests allow us to have our freedom of speech and to be part of you know uh sharing our views on how our societies should be run now what the canadian government did was they didn't like these protests um and in a bold move they sought to seize the assets of some of the leaders of these protests

and these protests some of these leaders were using crypto and so they approached a decentralized exchange here in canada and said hey you have to give us the information of all of the people that have assets on your exchange and this exchange in a very famous tweet went back to the government and said not only are we not able to do that we don't have that information we don't have the age this the gender the location uh of these the the career or the we don't have the we don't have that information about these people because that's not part of crypto right so there's a big

unlock here in terms of personal freedom and personal rights uh which is huge um and and of course when you have your your crypto wallet your web3 wallet and you have all your funds in one place you then can much easier much easier to go spend that money right you don't have to worry about think about how we transfer money right now between countries and how challenging that is uh well if you have all your assets in a crypto wallet borders are gone right you don't have to worry about borders and you can easily transfer money to somebody in a different country you can pay for a good in a different country without worrying

about having without worrying about currency exchange without worrying about how to figure out how to get assets from one country to another so big big unlock around owning all your assets and having it all in place um you can log in anywhere i've talked about this before above but for reference in sweden raul uh has lived in sweden for much of his life and he says that every citizen has an application called bank id 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 bank id similarly 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 quite yet but we're headed towards that reality and it looks like twitter will implement this first in the meantime we'll use lens protocol shout out to lens protocol amazing social media graph protocol that's rebuilding social media as i mentioned before you can apply for jobs and keep your achievements i think this is a really big part of the unlock of like how your crypto wallet is going to be your identity isn't it a hassle to keep track of all your completed courses degrees diplomas and then to verify them for an employer to verify those things so difficult with a crypto wallet you can theoretically

receive a token as an nft that will prove your completion of certain duties like a linkedin course 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 and credentials to take it one step further employers could gate their applications to only those who hold a specific credentialed nft so for example truck drivers who have their truck truckers driving license or servers who have their smart serve license only they can apply for certain jobs so now as a an employer you don't have to worry about like reference checks and figuring that out like you just

use the connect with wallet the wallet verifies that they have certain credentials that you require for your job and boom like seamless huge huge unlock for employers and for hiring practices 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 once your paper diploma is printed is just that forever uh and it's not to say that a an nft you can't change you can't change the smart contract so you can't change the uh the the diploma itself but it's programmable in the sense of you would be able to

program that oh in the future somebody who has that nft is now verified for this new job so we start a new career or a new job well because you have that nft you're verified that because we can program that into that nft so this will ensure trustworthiness and it also will make the application way smoother you know few fewer clicks removing the need for reviews and physical submissions of documents all that would be replaced by smart contracts fourth reason why this is the crypto wallet is such a benefit is 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 see someone else's record if you knew their wallet address or ens name this seems unreal but it was really proven when everyone could see luna's transactions like apa like basically when they were panicked selling their bitcoin everybody could watch what luna was doing whereas and same with celsius wallet which was almost liquidated and optyman's optimism's failed transaction which resulted in a massive hack everybody could see these things publicly you could see this so think about what that does for transparency of large organizations right now these large organizations or governments

you know if they have failures we have no idea about them because it's all private information it's all private data but on the blockchain there's transparency so we can see what is happening which leads to there's there's both good and bad side of that but i think we all agree that transparency leads to a better society because it forces more responsibility right you might say oh i don't want transparency which is totally fair and there will be ways that the blockchain will enable you to not be transparent with all of your assets and all of the pieces of your identity but

at the same time transparency does lead to more responsibility more civic responsibility if there's transparency then you're gonna act differently than if you can do so privately so i think this is really positive um the other point that raul makes here which is hilarious is that you're gonna be able to flex so right now people flex with showing off their watches their cars uh and garyvee predicts that in the future people will start flexing with their wallet addresses this is just so funny because you think about you know if you make your public address known will it'll let everybody see what nfts you hold or how much money you have um you

know there's no need for you to buy a car and drive around to show your friends and show off you can just send them your public address you can think about this in terms of collectors showing off their collections or if you want to remain humble you don't have to share your public address with anybody uh so the choice is up to you right so again transparency exists within the blockchain in the sense that everybody can see the transactions that are happening with a certain address but whether you decide to connect that public address to your name or whether you decide to keep it anonymous is up to you and so there there's a key distinction there

let's imagine a scenario you're a website developer and you just created a complex website for a big company for your services you received 100 000 paid in usdt a stablecoin 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 you log in with metamask and pay 20 that you owe through making a few clicks and approving the transaction from your phone boom taxes your taxes taking out from this money that you made simply quickly immutably uh like wow what a powerful unlock obviously this is not a current case but we can imagine this in the future

then you think about uh your future and so you'd like to invest some of that money into cryptocurrency so you go ahead and you buy 10 000 worth of ethereum and 10 000 worth of bitcoin on unisop where again you logged in and proved these transactions using your meta mask so you didn't have to contact a bank or use uh a fintech app or transfer this money between um different places which would take weeks right you know you think about like you made some money and then you want to go invest that money you've got to you've got to have multiple steps to like transfer it into a centralized exchange or a decentralized exchange you got to wait for it to be approved in there and your bank's got to send to them there's transaction fees along the

way and then and then you can invest it but with a crypto wallet it might not be quite instantaneous but it is it is essentially instantaneous the ability to move these assets around and to do different things with them now you have sixty 000 left you decide to move to spain where you know let's say i decided to move to spain i want to be a barista for the summer um but i realized that i don't i don't speak spanish and i don't nor nor can i make latte art i definitely cannot make latte art so i go ahead and i sign up for a spanish course and a barista course for which i pay in usdt using my metamask wallet upon completion i received two nfts my barista nft and my spanish course nft now i go to my

government's website i log in with my metamask and i let them know that i'm moving to spain for two months to make sure that i do not pay taxes in two different countries uh this is obviously getting deep into tax laws and they're very different for each country so i won't even some listeners might say that's not true it very much depends upon where you live how you would pay your taxes based upon your residency versus your travel now i pack my bags i buy a flight ticket again using my metamask wallet to spain and upon arrival i apply for a job at a coffee shop in the center of madrid and i show them my two completed courses in the form of my nft they check the blockchain they acknowledge that i'm skilled enough to work there i have my nft and latte art

and boom i get hired for the job and they don't have to worry about confirming am i skilled do i speak spanish you know they can just look at the blockchain and confirm these things so because of all these benefits like in conclusion here because of all these benefits named above we really believe that your crypto wallet has a potential becoming your identity right it's not just your money assets so much more this scenario obviously that we've been discussing is going to take you know years if not decades before it becomes reality and unfortunately big tech and some governments will likely stall innovation and adoption because this is bad news for them they rely mostly on owning and manipulating our data and money something they'll lose

control of thanks to web3 tools saying that is worth mentioning that those who won't adapt will get disrupted just like what happened with the rise the internet so adapt or die for now i'll use my wallet to store my digital belongings and access web 3 applications but i can't wait for the day when i can apply for a job or apply for a university degree or apply for a credit uh for for a line of credit or apply for a loan all these things using my wallet which controls my identity there's the article thanks so much raul for sharing that

with us if you want to learn more about this check out the foundational course that we have it's called the web3 rabbit hole link will be in the show notes it is a one and a half hour lecture series three part really the prerequisite to web3 and blockchain technology to understand this stuff at its core level could not be more important for the really for anybody whether you're building web3 or whether you're just getting into the space or whether you've been in the space for a year so important i i've watched this course a few times because it's just so important to remember the foundations of the tech that we're building that is

allowing us to change the world in terms of ownership and permission and interoperability and composability all these things what do those words mean well watch the rabbit hole course thanks again for listening everybody have a fantastic day practice gratitude keep smiling i love you all have a good one cheers thank you for listening to web3 academy we hope this helps you along your web 3 journey if it does please share this episode and subscribe so you don't miss the next one by the way if you have yet to join the discord community you are missing out this is where all the magic happens this is where we learn where we ask questions where we network uh you

want to be in there the link to join is in the description below and finally a quick disclaimer nothing in this podcast was financial advice crypto and web3 can be risky you can literally lose it all in fact if you invest on account of what we say you probably will lose it all so don't do that in all honesty the point of this podcast is to remove the noise of markets and price and focus on utility and implementation anyway so you should not take any of this as financial advice thank you friends and see you in the next one