Is Web3 Bullsh*t? Inside Blockchain’s Sneaky Rebrand… by Matt Ward


Information flash: The crypto and blockchain crowd have rebranded to web3. They in all probability thought it sounded higher and didn’t need all the luggage that a whole bunch of rip-off ICOs, STOs and skirted securities legal guidelines introduced with the time period blockchain. 

In a means, it was a bit like Fb altering its identify to Meta. Crypto’s greatest gamers wished a option to shift public (and regulator) notion to one thing extra respected and visionary than the subsequent pump and dump scheme…

Which to be honest, after the 2018 ICO gold rush, is smart. Particularly as basically each challenge that went on to boost hundreds of thousands (some even billions), mainly by no means shipped a product, not to mention one thing significant. 

Sadly, like many a craze, charlatans got here in, grabbed the cash and ran.

However no matter its questionable grifter previous, web3 is THE sizzling subject at present as increasingly founders, enterprise corporations and bigger establishments look to enter the web3 world and construct “the decentralized web of the long run.”

No less than, that’s what they are saying. 

What number of occasions have you ever heard: “That is going to alter the world… repair all the issues with the fashionable web… give again energy to the individuals…”

And many others, and so on, and so on…

So, why is it that almost all of web3’s web3’s greatest proponents (and beneficiaries) are the identical wealthy, highly effective gamers that made a whole bunch of billions constructing and investing within the fashionable web? It’s like they “need” to remake the web for everybody, but additionally personal it as nicely…

Is it simply me, or does one thing appear off about that?

As if that wasn’t sufficient, why are these “insiders” receiving preferential presale phrases earlier than most of the people can take part – thus permitting the early traders and proponents to flip dust low cost tokens and advisors shares nearly instantly after the general public sale? 

Jack Dorsey web3 tweet

To be honest, it’s a reasonably good gig – assured mark ups, no danger or progress mandatory…

If it sounds a bit like insider buying and selling, that’s as a result of it’s – if not from a authorized sense, at the least from a sensible one. And this turns into unavoidably apparent once you hear the best way individuals speak about blockchain/web3 launches and releasing tokens.

The phrases “quick cash,” “fast flips,” and “assured markups/returns” come up nearly each time.

However from an incentives perspective, it’s laborious accountable them. How will you blame somebody for taking part in by the foundations to win the sport? Is it their fault, or that of regulators who’ve didn’t set a degree enjoying area?

In a way, it’s no totally different than oil firms polluting their option to revenue, Instagram miserable you into shopping for that new costume or pharma pushing you a capsule you don’t want. 

Sadly, all of that’s honest sport, at the least till we alter the playbook – as a result of individuals (and companies) change for considered one of two causes: ache or love. And let’s be trustworthy, who doesn’t love creating wealth?

Perception constructed upon monetary achieve

Upton Sinclair as soon as stated: 

“It’s troublesome to get a person to grasp one thing when his wage relies upon upon his not understanding it.”

Is there any higher analogy for Bitcoin, blockchain or web3?

The reality is, most of blockchain and web3’s largest proponents should not cynical capitalists concerned with a fast buck, however true believers. They consider blockchain’s inherent transparency and permissionless belief enable for humanity to evolve past our reptilian methods and, via appropriately aligned incentives, construct a “higher world” constructed round decentralization and democratization.

They level out the issues with the fashionable web and centralization round monopoly gamers like Google, Fb and Apple… “Decentralization will repair all that…”

If we may simply give energy again to the individuals and get governments/companies/people out of the best way via trustless DAOs (decentralized autonomous organizations) and correct tokenomics, we’d repair the whole lot…”

Issues with the provision chain and youngster labor in China… “There’s a blockchain for that.”

Lowering emissions to succeed in the Paris local weather targets… “Let’s launch a tradeable carbon token.” 

Fixing hate speech and polarization on-line… “A web3 substitute for Twitter and Fb.”

Web3 should simply be the reply for the whole lot… your “good” silver bullet.

Oprah blockchain meme
Supply: Tony Arcieri

The factor is, NOTHING is one-size-fits-all. Every part has benefits and drawbacks, and blockchain is not any totally different.

What’s totally different nevertheless is blockchain’s inherently viral, ponzi-esque nature – which has a really MLM (mid degree advertising) really feel to it. Not solely do you’re keen on listening to Taylor Swift, however in the event you purchased her NFT, the worth of your “funding” is now immediately tied to her reputation.

In all probability incentivizes you to pimp TSwift much more. Blast the music for all to listen to!

If that’s not blatant sufficient, right here’s a greater instance:

Think about if Jehovah’s Witnesses (or evangelical preachers…) acquired paid for each single individual they transformed to their trigger.

It rapidly turns into a self-fulfilling prophecy – in fact their perception in “god” grows proper together with their checking account.

Which is a recipe for elementary extremism – suppose extremely Orthodox Jews or, for a extra associated instance: Bitcoin maximalists…

Bitcoin maximalism
Supply: Every day Fintech

As a result of that’s what Bitcoin and blockchain are – a trigger, a “faith.” It’s a motion and excellent with cash hooked up.

The issue is, we’re excellent at convincing ourselves of issues we need to consider – therefore why filter bubbles are such an issue.

I ignore the whole lot else that doesn’t jive with my worldview and search out much more likeminded people – which is just additional amplified by algorithms.

Which begs the query:

Is web3 simply one other rip-off?

The quick reply: No, under no circumstances! 

There are tons of extremely essential makes use of for blockchain expertise. 

Like sending cash house/overseas with out paying obscene financial institution charges;

Like fleeing a conflict torn nation and changing your financial savings to unstealable Bitcoin;

Government seizing Fiat currency

Like stopping dissidents from being silenced on centralized social media platforms like Twitter (and simply as a aspect observe, no, Republicans aren’t being unfairly silenced, they’re simply whining the loudest about being punished for breaking the foundations…).

The truth is, the prospect of actually permissionless, trustless databases holds nice potential for society and for humanity. However as with the whole lot in life, there are additionally many limitations.

Like what occurs in the event you lose your password?

Like what occurs in the event you get cheated out of cash?

Like what occurs if Trump/Putin/”insert your favourite dictator” incites an rebel to overthrow democracy…?

There are such a lot of what ifs to contemplate. And due to the open nature of decentralization, you get the nice together with the unhealthy. 

No gatekeepers, but additionally no firefighters to avoid wasting your private home.

Frictionless funds, but additionally frictionless fundraising for ISIS.

Neighborhood run/owned apps, but additionally terrible interfaces and customer support.

It’s all about trade-offs.

So what are the trade-offs of web3?

Which trade-offs are you prepared to make? Decentralization has many strengths, but additionally many gaping weaknesses. Like Bitcoin’s extremely wasteful proof of labor system or Ethereum’s extra political/wealth-based proof of stake.

To be able to make sure the survival and veracity of the community/blockchain and to safeguard its varied nodes, excessive measures have been designed/put into place to forestall varied types of hostile takeover – all of which might be logically aimed altering the blockchain, i.e., including cash to your personal pockets (account) and so on… 

However these protecting measures require vital assets and include their very own wave of challenges. Like diminished velocity and throughput (variety of transactions per second), excessive fuel charges (the price to submit/write a transaction to the blockchain) and delayed growth occasions – to not point out forked blockchain chains… oops, I imply web3 tasks 🙂

For some issues like defending dissidents or guarding towards rogue regimes, this is smart. You want safety, anonymity and peace of thoughts.

However what about in on a regular basis 1st world life? 

What in the event you assumed EVERY SINGLE individual you noticed day by day was out to rob you/assault you and so on… You’d by no means go wherever, by no means belief anybody, by no means accomplish a lot and by no means reside life to its fullest. The economic system would additionally come to a grinding halt.

It’s a bit like an ant colony the place 50% of ants do nothing however wait within the anthill they’re attacked.

Speak about a waste of assets and labor.

Heck, the US authorities alone spends (wastes?) 11% of its annual price range on the army. Think about how a lot good we may do with the $766B+ annually we spend on “what if” cash…

US Military Spending waste

Is a lot hypothetical “safety” and “safety” actually mandatory?

The identical could possibly be stated of blockchain and web3.

Does your app or service really want absolutely permissionless decentralization? Does it really want such a strong proof of stake system and 1000s of nodes to make sure your scooter sharing firm by no means will get hacked by faceless Russian crime syndicates? Why? 

What’s the worst that might occur? It’s not life or dying right here, probably not, not except you stretch the what ifs past any cheap restrict. But many web3 proponents do exactly that, discovering essentially the most inconceivable eventualities to justify decentralization and tokenization.

For example, do I really want a token to show I personal the portray on my wall? Until I’m a grasp thief with Ocean 11 esque museum burgling abilities, I in all probability purchased it.

…even when I misplaced the receipt.

However I really love web3

That’s sufficient web3 bashing for in the future. You get the purpose. Certain, decentralization isn’t the whole lot it’s hyped as much as be, but it surely nonetheless holds huge potential – when utilized to the best issues.

And the most of the proper issues, at the least as I see them, are in disrupting massive tech’s ruthless monopolies. The truth is, a number of years in the past I wrote an article on precisely this subject: how tokenized blockchain’s could possibly be used to interrupt massive tech’s stranglehold on platforms, marketplaces and social media, all of which nonetheless applies at present.

It seems these pesky, ponzi-esque tokenomics schemes we talked about earlier can be used for good – and they’re actually highly effective!  Right here’s how.

Again at first of 2018 I made a collection of predictions (pre ICO growth days once I was a bit extra starry-eyed about blockchain’s future) on what the long run held for blockchain/crypto. A lot of it nonetheless holds true at present.

To get a greater thought of the place I stood then and a few of the issues I see web3 rising to, I’ll share these right here:

My 11 Massive & Daring Blockchain predictions (as of Jan 2018):

  1. Within the not so distant future, people will in all probability put on rings or bracelets containing their crypto money (in all probability private identification as nicely).
  2. Some governments all over the world will start to embrace crypto whereas others will crackdown
  3. Blockchain will transform voting and governance, making a extra clear voting system.
  4. Freedom of cash will create a extra geographically free world, the place residents can extra simply decide up and go away in conditions of strife. 
  5. Blockchain will enormously simplify recording retaining, lowering the necessity for a big proportion of presidency workers whose sole job is paperwork
  6. Sensible contracts are overrated.Ethereum smart contract DAO hack
  7. Tokens will exchange shares to indicate possession of an organization.
  8. Blockchain will dramatically improve the liquidity, worth and volatility of actual property.
  9. The affect on healthcare could also be largest of all.
  10. Crypto may result in Minority Report and make privateness a factor of the previous.
  11. Many new community results firms will overthrow incumbents.

As you may see, a few of these have already come to move whereas others are nonetheless only a attainable future.

Will they arrive to move… solely time will inform.

And to go away you with only one very last thing:

You might be in all probability questioning what web3 will develop into? 

I feel one of the best ways to reply that query with one other query: who’ll be holding the reins?

Closing ideas

I hope you might have loved this deep dive into web3. And whereas there’s a lot extra to be written on the topic, that’s a subject for an additional day. 

As they are saying: we’re actually writing the historical past books as we go.

Tech regulation, consolidation, large mergers, Bitcoin surges… How will historical past view our period?

And the way will it view web3 and blockchain?

Is that this the second that sparks “the revolution” or simply one other tulip craze?

I’m certain you might have your opinions (which I’d love to listen to within the feedback), however take into account, actions converse louder than phrases. 

So, the ball is in your courtroom.

What subsequent?

Constructing a web3 firm and need assist designing the tokenomic incentives and strategic development plans to gas community? Be at liberty to succeed in out. If you happen to’re doing one thing significant that really requires a token, I’d love to assist.



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