---
title: 1.3 The History of Crypto
description: Bitcoin, shifting the origin of value, from an entity in a system, to the system itself
---

# 1.3 What is Crypto? The Internet of Value

This is the final lecture in providing the context and introduction to this new world of crypto. After this lecture, we are going to be drilling into specific use-cases and pillars of this new world. 

We ended last lecture with the following statement about the conceptual inversion that crypto brings to the world: 

_In crypto- whether it be a crypto-currency or a crypto-token, the underlying paradigm shift is that of shifting the origin of value, from an entity in a system, to the system itself. And the token, as representative of a fraction of the system, enables participation among anyone who owns or manages the token._

In this lecture, we are going to take this claim and _fit it_ into the context from lecture 1, as both a final orientation of where we stand, and secondly as a precursor to the themes and challenges that we will delve into going forward. 

## Stepping Into Web3: Principles and Conceptual Frameworks

There is a chronology to these principles and frameworks that should provide a clear picture of what Web3 offers to the world. We will be moving from the simple to the complex and ‘stacking’ the different principles on top of one another: 

Starting in the context of the history of the internet from which Web3 is emerging, we can conceptually say that Web3 is a combination of the best aspects of Web1 and Web2: 



* **Principle 1: Combining the Best of Web1 and Web2.** Or in the words of Chris Dixon –

_“Before web3, users and builders had to choose between the limited functionality of web1 or the corporate, centralized model of web2._

_Web3 offers a new way that combines the best aspects of the previous eras. It’s very early in this movement and a great time to get involved.” - Chris Dixon_

Or in the words of Packy M: 

_“Web3 is the internet owned by the builders and users, orchestrated with tokens. (Thanks to [@packyM](https://twitter.com/packyM) for this definition.)”_

In short, with Web3 we have an internet with similar functionality of Web2, but the original user-focus and freedom of Web1. That is to say, we have the prospect of building complex internet applications that are not siloed by massive companies extracting data about their users and profiting off of their behavior. 

This takes us to the second principle: 

* **Principle 2: In Web3 The System Changes The Place of the Individual:**


On a systems level, Web3 brings a certain standardization to systems, such that these token-denominated networks and protocols are: _Public_, _Permissionless and Accessible Irrespective_ of _Geography, Age, or Nationality_. So on the one hand, Web3 systems are designed to accommodate users by being transparent, and open. 

On the other hand, the individual that now inhabits this system is able to participate in the system in such a manner whereby the user has complete ownership of its _Money (assets)_, _Data_, and _Identity_. This is to say, there is no back-end system collecting user information or user purchasing or participation behavior beyond what is visible on-chain. As Web3 matures, the user becomes the central entity in charge of their visibility on the internet. 

As Harvard Business School puts it: 


![](@site/static/img/bootcamp/mod-em-1.3.1.png)


And from this principle, we can zoom out slightly, to understand the macro-value of these emergent Web3 tools, for remaking existing systems of the future: 

* **Principle 3: A New Suite of Tools For Building the (Value-Imbued) Systems of Tomorrow:**

Web3 gives us the primitives to expand upon this newly discovered relationship between system and individual to create systems in the future that can move value, information, and decision making (1) At the speed of the internet, (2) Globally Accessible, (3) With self-executing programmable rules (known as smart contracts) such that it can offer a new foundation for global commerce / manufacturing / and so forth. 

And finally, as we started this with a discussion on the nature of value, and the innovation in the fundamental design of the Bitcoin network, we can close our framework for understanding Web3 with the final core innovation of Web3 namely its proposition to remake and digitize the very nature of value itself: 

* **Principle 4: A Financial Layer of the Internet: The Tokenization of (Intangible and Non-Fungible) Value Purports to Change:**



    * **How Markets Work.** Such that we can remake financial markets. 
    * **How Money Works and is Managed.** Such that we can remake how money is created, held, and managed. 
    * **How Value can Talk to Each other:** Such that we can remake how these systems of value can communicate with one another. 
    * **What Can be Represented as value?** Such that we can even create digital identifiers and footprints for events and activities in the world that have been previously unrepresented (new representations of value ). 

In the final analysis, Web3 is changing the very nature of value itself. It purports to ‘go-global’ with the early innovation, such that retail is able to participate in financial markets and services outside of institutional support or criteria. 

It also purports to change the ‘rules of the game’ in terms of how value can be created and managed - the who, the what, the why and the how of money is all up for grabs now. And then on top of this, we can ‘synthesize’ these different systems of value together because they are all living on the internet and speak the same language of code. 

At the very, very end of the day, we can even create identifiers and exchangeable tokens of previously not-conceptualized value (non-fungible value) - with the only rule being that some type of data about this value can be represented in the software system to activate or deny its creation. 


![](@site/static/img/bootcamp/mod-em-1.3.2.png)


 This picture here is the opportunity and promise of Web3 - and since we are so, so early on - there is still an enormous amount of innovation that remains to be done. As we go through the following lectures, it will be extremely useful to keep in mind this conceptual framework - from the history of the internet to the history of money, to the nature of Web3 close on hand to fit the smaller pieces of each module into the larger whole of the Web3 framework.