Probably, unless you’ve been unusually lucky, you’ve been schooled in the wonders of Web3. For the remaining lucky few, let me explain. Web3 is the inexorable destiny of the Internet: the magical fabric from which decentralized blockchain-based dreams are created and dystopian nightmares of big tech destroyed. The future is bright; the future is “add-only” databases.
Web3’s central thesis is that because the Internet has become so centralized, with power concentrated in the hands of a few and users powerless over their own data, we need a more distributed, equal, and open system. So far, so reasonable.
But the moment you look below the surface, big holes appear in the Web3 vision. Their technoUtopian advocates say they want to harness the supposed power of blockchains, the immutable databases that underpin bitcoin and other tokens, to create a democratized internet where you control your own data and are no longer dependent on big tech giants. Web3, the argument goes, will let you “own a piece of the Internet.” Naturally, the “decentralized” applications and organizations operating in this brave new world are powered by crypto tokens – all you need to do is buy them.
In truth, Web3 has become the latest marketing term used to try to shore up and repackage the overlapping ideas of cryptocurrencies, non-fungible tokens, and “decentralized finance,” which seemed like brilliant innovations until the whole market started crashing. Never mind that blockchain, once touted as the solution to everything from corrupt elections to supply chain fraud, has failed to live up to the hype and has only proven its usefulness as an enabler of the crypto casino. This time it will be different.
It is even difficult to talk about Web3 because it is, like many other overrated concepts, a very nebulous term. I had a somewhat heated exchange last weekend with someone who claimed that Web3 was about banks processing data to predict your divorce and lower your credit rating before you even realize your spouse is having an affair. That, I argued, was about Big Data and artificial intelligence, which has nothing to do with blockchains or distributed ledgers. But like the metaverse and the “Fourth Industrial Revolution” before it, Web3 often seems to be used to mean something like “tech stuff that could do things in the future”.
The term itself comes from the idea that we’ve had two iterations of the web: The first, launched in the early 1990s, lasted just over a decade and consisted mostly of static web pages that weren’t interactive. The second, which arrived in the early 2000s and continues to this day, allowed users to upload their own content to the web, but by doing so, the user inadvertently became the product.
Perhaps the most false and pernicious aspect of Web3 is the lie that it is really about decentralization. Its biggest backers are Andreessen Horowitz, or a16z, a venture capital firm with billionaire co-founders and assets under management of more than $28 billion, which launched a $4.5 billion Web3 fund earlier this year. Leaving aside the fact that launching a multi-million dollar fund seems like a huge concentration of wealth, this company is also a major investor in Web2: it has, for example, a stake in Meta, formerly known as Facebook, in whose The co-founder of the a16z board, Marc Andreessen, still sits.
“Power . . . is becoming centralized again in the hands of a few investors, in some cases the exact same people who have so much power in today’s web,” according to Molly White, software engineer and author of “Web3 Is Going Just Great.” “, who is one of the main critics of Web3. “I think there are ways to achieve decentralization on the Internet,” he tells me. “But I see that those solutions are necessarily based on social and policy changes rather than pure technological changes ” .
Meanwhile, firms like Coinbase, the a16z-backed cryptocurrency exchange, which, until recently, was making hundreds of millions of dollars in profit every quarter, are positioning themselves to be “the default gateway to the Web3 ecosystem.” It is quite strange that an Internet that is all about openness and decentralization needs a corporate giant to provide input.
Web3 is not about making the Internet fairer or less likely to be exploited by greedy bigwigs, it is actually quite the opposite: it is about introducing another layer of financialization to the web. The reality, therefore, is actually much simpler than the jargon that you will have to listen to when someone explains it to you. Web3 is just the newest way to serve the same old crypto shit, and smells as bad as ever.