Web3 is just a new part of the same old crypto nonsense

Unless you’ve been exceptionally lucky, you’ve probably been introduced to the wonders of Web3. For the lucky ones left, allow me to explain. Web3 is the inexorable fate of the Internet – the magical fabric from which decentralized, blockchain-based dreams are created and dystopian big-tech nightmares are destroyed. The future is bright; the future is “add-on only” databases.

The central thesis of Web3 is that because the Internet has become so centralized – with power concentrated in the hands of the few and users powerless over their own data – we need a more distributed, egalitarian and open system. So far reasonable.

But as soon as you look beneath the surface, gaping holes appear in Web3 vision. Its techno-utopian proponents say they want to harness the alleged power of blockchains — the immutable databases that support bitcoin and other tokens — to create a democratized internet where you control your own data and are no longer dependent on big data giants. . Web3, the argument goes, allows you to “own a piece of the Internet”. Of course, the “decentralized” apps and organizations operating in this brave new world are powered by crypto tokens: all you have to do is buy them.

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In reality, Web3 has just become the latest marketing term used to prop up and repackage the overlapping ideas of crypto, non-replaceable tokens, and “decentralized finance”, all of which seemed like brilliant innovations until the entire market started to collapse. Never mind that blockchain – once touted as the solution to everything from corrupt elections to supply chain fraud – has totally failed to live up to the hype, only proving its usefulness as a crypto-casino catalyst. This time it will be different.

In fact, it’s hard to talk about Web3 because, like many similarly overrated concepts, it’s a very vague term. I had a heated argument last weekend with someone who claimed that Web3 was about banks processing data to predict your divorce and lower your credit rating before you realize your spouse is having an affair. This, 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 ‘technical 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 90s, lasted a little over a decade and consisted mostly of static web pages that weren’t non-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 in doing so, the user unknowingly became the product.

Perhaps the most dishonest and pernicious aspect of Web3 is the lie that it is really about decentralization. Its top backers include Andreessen Horowitz — or a16z — a billionaire co-founder venture capital firm with more than $28 billion in assets under management, which launched a $4.5 billion Web3 fund earlier this year. Aside from the fact that launching a multi-billion dollar fund seems like a concentration of wealth, this company is also a major Web2 investor: for example, it has a stake in Meta, formerly known as Facebook, whose board of directors is a16z co-founder Marc Andreessen, is still employed.

“Stream . . . is reorienting itself into the hands of a few other investors, in some cases the exact same people who hold so much power over the web today,” said 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,” she tells me. “But I necessarily see these solutions as being based on societal and political change rather than pure technological change. change.”

Meanwhile, companies like Coinbase, an a16z-backed crypto exchange — which until recently was raking in hundreds of millions of dollars in profits each quarter — are positioning themselves as “the default gateway to the Web3 ecosystem.” Quite strange that an internet focused on openness and decentralization needs a corporate giant to take care of the entrance.

Web3 isn’t about making the internet fairer or less prone to exploitation by greedy fat cats, it’s actually quite the opposite: it’s about introducing yet another layer of financialization to the web. So the reality is actually much simpler than the jargon you have to go through when someone explains it to you. Web3 is just the latest way to serve up the same old crypto bull shit, and it still stinks so bad.

jemima.kelly@ft.com

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