Blockchain and Web3: Building the Cryptocurrency, Privacy, and Security Foundations of the Metaverse

Cover
Title Page
Copyright Page
Contents
Foreword
	Great Leap Forward into Web3
	The Opportunities and Challenges of Metaverse
	Blockchain: The Building Blocks of a Trusted Metaverse
Acknowledgments
About the Authors
	Winston Wenyan Ma, CFA & Esq.
	Ken Huang
Preface
PART I Mega Convergence of Digital Technologies in Metaverse
	Chapter 1 Metaverse: Convergence of Techand Business Models
		Metaverse, Omniverse, and Human Co-Experience
		Big Tech vs. Web3
		Seven Layers of the Technology Stack
			Layer 1: The Physical and Network Layer
			Layer 2: The Decentralized Digital Identity Layer
			Layer 3: The Distributed Data Layer
			Layer 4: The Distributed Intelligence Layer
			Layer 5: The Consensus Layer
			Layer 6: The Smart Contract Layer
			Layer 7: The Metaverse Economy Layer
		Business Models Converging in Metaverse
			Case 1: Meta – AI, AR/VR, Big Data, Social Network, and UGC Converging
			Case 2: Roblox – 3D Communication, Social Network, AR/VR, and NFT Converging
			Case 3: Soul – Social Network, AI, and Digital Coin Converging
			Case 4: Loot – NFT, Creative Ideas, Art, Derivatives, and Games Converging
			Case 5: SocialFi – Social Network, Game, Finance, Payment, and NFTs Converging
		Building a Better Internet for the Creator Economy
	Chapter 2 Blockchain, the Backbone of Web3
		Basic Blockchain Concepts
		Blockchain’s Four Key Components
			Smart Contract
			Public Key (Encryption)
			Consensus Algorithm
			Peer-to-Peer (P2P) Networking
		Mega Convergence of Data Technologies
			Blockchain and Internet of Things (IoT)
			Blockchain and Distributed Storage
			Blockchain and Artificial Intelligence (AI) and Machine Learning (ML)
			Blockchain and Cloud Computing
		Blockchain and Cybersecurity
			Smart Contract Security
			Consensus Algorithm Security
			Node Security
			Data Encryption Security
		Five Challenges of Blockchain Adoption and Possible Solutions
			Privacy Issues
			Scalability
			Consensus Algorithms
			Authenticity of Data on the Chain
			Interoperability
		Why Blockchain Is Essential for Metaverse
			1: Real-Time Global Payment Rail
			2: Ownership Verification for Digital Assets
			3: Crypto Tokens to Power the Creator Economy
			4: Blockchain /AI to Create Immersive Experience
			5: Decentralized Cloud for App Deployment
			6: Decentralized Identity and Cybersecurity
			7: Cross-Chain Computing Turns “Multiverse” into Metaverse
			8: Enable New Data Economy in the Metaverse
PART II Blockchain Breakthroughs Set the Transaction, Privacy, and Security Foundation for the Digital Economy
	Chapter 3 Cryptocurrencies and Tokenomics
		Virtual Lands, Virtual Currencies
		Why Metaverse Needs Crypto and Blockchain-Based Transactions
		Bitcoin: The Beginning of Cryptocurrency and Trust
		Ethereum: Smart Contract Execution Platform
		Bitcoin versus Web3 (Pure Decentralization vs. Modified Decentralization)
		Visa and Mastercard: Tokenomics Going Mainstream
		Metaverse Outlook: Crypto Beyond Currencies
	Chapter 4 DeFi (Decentralized Finance): Bankless Metaverse
		Fintech 2.0: DeFi vs. CeFi
		Governance Tokens and Revenue Sources
			DeFi Governance Token
			DeFi LP (Liquidity Provider) Token
		Stablecoins: Bridging DeFi and CeFi
			Fiat Collateral (Off-Chain)
			Crypto Collateral (On-Chain)
			Algorithmic Stablecoins
			Commodity-Backed Stablecoins
		Layered Protocols and DeFi Security
			DeFi’s Money Lego Layers
			Incorrect Liquidity Pool Calculations
			Stolen and Leaked Private Keys
			Poor Access Control of Privileged Functionalities
			Frontrunning Attacks
			Rug Pulls
			DeFi Cross-Chain Bridge Attack
		Bumpy Road to Mass Adoption
			Scalable Base Blockchain
			KYC/AML
			UI/UX Design
		Conquering New Territory: DeFi + NFT, Game, and Social Network
			DeFi and NFT
			Solving Bonding Curve Issue
			Game + DeFi = GameFi
			Emergence of SocialFi
	Chapter 5 NFTs, Creator Economy, and Open Metaverse
		2021 – The Year of the NFT
		Co-Evolution of Art and Tech
			Phase 1: Manual Craft
			Phase 2: Image Printing
			Phase 3: Mass Media
			Phase 4: Digital Art
		NFT and Generative Art
		Creator Economy: Beyond the Bored Apes
		Going Mainstream with Brands and Fashion
		Challenges to the NFT Metaverse
	Chapter 6 Blockchain Gaming in Metaverse
		From Gaming into 3D Interactive Metaverse
		Tech Convergence, Media Convergence
		Epic Games and Fortnite
		Roblox Human Co-Experience
		P2E Blockchain Gaming – GameFi with NFT
			Level 1: Basic Interaction NFT (Example: CryptoKitties)
			Level 2: Explore (Examples: Decentraland, Sandbox)
			Level 3 P2E Gameplay (Example: Axie Infinity)
		Blockchain Gaming: Gaming First? Crypto First?
		Gaming, the Foundation of Metaverse
	Chapter 7 Metaverse Privacy: Blockchain vs. Big Tech
		Privacy in a Parallel Digital Universe
		Future Data Privacy Model in Metaverse
			Centralized Governance Model
			Individualized Model
			DAO-Based Governance Model
			Hybrid Governance Model
		WEF Data Governance Model
			Metaverse Platform Accountability
			Data Protection
			Individual Understanding
			Individual Control
		Zero-Knowledge Proof and Secure Multiparty Computation
			Zero-Knowledge Proof
			Secure Multiparty Computation
		Homomorphic Encryption and Federated Learning
			Homomorphic Encryption
			Federated Learning
		NFT “Cookies”: When Web3 Tech Meets Web2.0 Legacy
		Surveillance Economy and Dystopian Society
			MEV and Surveillance Economy
			Dystopian Society
	Chapter 8 Metaverse Security
		Blockchain and Metaverse: Marriage in Heaven?
		Identity in Metaverse: Wild Wild West?
		Metaverse Data Security: Chronic Pain
			Public Key Cryptography
			Self-Sovereign Identity (SSI) and Data Ownership
			Data Leak Cases in NFT Projects
		Smart Contract Security: Maybe Not So Smart
			CryptoPunks Smart Contract V1 Error
			Hashmasks Smart Contact Bug
			Twitter Profile File Picture (PFP) NFT Hack
		Ransomware Attack in Metaverse: Is It Possible?
		Supply Chain Software Risks: A Real Danger?
			OpenSea Down, Impacting Wallets, and Other NFT Projects
			Maker DAO Crash on 2020 “Black Thursday”
			Supply Chain Smart Contact Attack on Lendf.Me
		Quantum Computing: Challenges and Opportunities
			Random Number Generation
			Hash Functions
			Public-Key Signatures
			Transition from Pre-Quantum to Post-Quantum Blockchain
		Extended Reality (XR): Novel Security Risks
PART III Three-Way War among Open Metaverse, Big Tech Walled Gardens, and Sovereign States
	Chapter 9 Public Crypto, Government CBDC, and Big Tech Coin
		Three-Way Currency War in Metaverse(s)
		China’s e-CNY Push at 2022 Winter Olympics
		Crackdown on the World’s Largest Crypto Market
			Investor Protection
			Carbon Neutrality
			Financial Stability
		Digital Rupee, Digital Ruble, and Britcoin
		US Bellwether: CBDC R&D and Crypto Regulation
		US–China Consensus: Stablecoins in the Regulatory Spotlight
		Big Tech Coin: The Rise (and Fall) of Libra
	Chapter 10 Web3 Creator Economy on Blockchain
		Constitution DAO and Web3 Governance
		Redesign Corporations in the Metaverse
		YGG and Open Metaverse vs. Big Tech Platforms
		Challenge 1: Interoperability and the “Internet of Blockchains”
		Challenge 2: State-Backed Metaverse
		Challenge 3: Will Web3 Startups Become New “Big Techs”?
		Creator-Verse: Future Creator Economy
			Phase 1: Passive Internet
			Phase 2: Mobile Internet
			Phase 3: Blockchain Internet
Glossary
Index
EULA