Is web3 bullshit? (Transcript)
Last year I started to see a lot of talk about blockchains and crypto. In the mainstream media, on social media, with colleagues and friends. And that was nothing new. I mean, I’d seen crypto hype cycles before, and as someone who is not super interested in speculative financial investments it just sort of wasn’t my thing.
But this time, the message had really changed. There was this new word everywhere: “web3”. The future of the web, I was being told, was going to be powered by crypto and blockchains. I was reading that finally, we were going to fix the web! And that got my attention.
Because the idealism of the early web was compelling. This was a new technology that would provide everyone, regardless of means, with access to the world’s knowledge at their fingertips. It would provide equal access to things like governance and participation in their communities. Borders would no longer matter. The truth would set people free.
The web that we know today is a far cry from that early idealism. Most people experience the web filtered through the algorithms of web giants like Google and Facebook. Where information isn’t paywalled, it’s typically papered with advertisements. Web corporations squeeze every drop of data out of their users to resell or to build startlingly detailed advertising profiles. Social media companies optimize for engagement at the cost of everything else, even if it means radicalizing or inciting hatred in their users.
There are a lot of people out there who picture the next generation of the web as one where we reject the extraction and capitalization. I am one of them.
But that “web3” that I started to read about last year, amidst the advertisements of “fortune favors the brave” and crypto fanatics yelling about “going to the moon” and telling everyone else to “have fun staying poor”? That’s not quite how I expected we might get there. But maybe I missed something, I thought, as I began trying to figure out what web3 even was.
This was not the first time I had heard the term “web3”. Right around the turn of the millenium, people were talking about a different thing, “Web 3.0”, that was going to be the next generation of the Internet. At that time they were talking about the Semantic Web. Some of you who watched the Centre stage talks earlier this morning probably saw Tim Berners-Lee talking about Web 3.0 which, again, he defines very differently from the crypto version of web3.
The thing about a term like “web3” is you don’t necessarily know what it is until it’s happened. You don’t know what that fundamental shift is going to be that brings about a sea change in the web that deserves the name “web3”. So until then, we’re stuck guessing at what web3 might be—unless we’re a venture capitalist or a startup, in which case we have to speak decisively in the hopes of acquiring funding, even if we turn out to be wrong.
So, when I was researching, I was asking: “what is this new web3?” What was this next sea change that was going to be bringing about the future of the web? And it was hard to figure out. The one thing that was clear to me early on was that it was definitely supposed to involve a blockchain.
That turned out to be pretty emblematic of web3 projects as I dug deeper. What were they going to do? Who knows, but there was definitely going to be a blockchain involved. And the rest of it was pretty fuzzy.
As I researched more, I came across a few common buzzwords. Democratization. Decentralization. Censorship-resistance. The goals all sounded compelling, and really not unlike what I had in mind for the future of the web myself. But when it came time to find out how blockchains and cryptocurrencies were going to deliver us there, that was less clear.
And actually, unclear was the best case scenario. In some cases, it was outright ironic. The enormous venture capital firm Andreessen Horowitz published a slide deck hyping web3 that said “the Internet as we know it is flawed”. A graphic showed a flag planted in the web, emblazoned with logos of Facebook, Google, and Apple, with a caption showing that it was supposed to be decrying “Big Tech oligopoly”.
The oligopoly of Andreessen Horowitz, or its investments in the same Big Tech companies that they now decried, including Facebook, Instagram, and others, went conspicuously unmentioned. The slides underscored how now it was platforms like the OpenSea NFT marketplace that would help fix this terribly broken, unfair, monopolized web again, conspicuously failing to mention that Andreessen Horowitz had led several funding rounds for OpenSea and that OpenSea, at the time, held an outsized portion of the NFT market share. But they had nothing to fear if OpenSea lost its monopoly because Andreessen Horowitz has invested in other NFT platforms too.
You see, if they can convince people that this is the future of the web, they’ll be rich… richer than they already are. It doesn’t matter if it turns out to be true or not, or if they’re steering the web in the completely wrong direction, or even if they hurt a lot of people.
So in my research, I gave up on the smooth-talking founders, the venture capitalists with their slide decks and the tech journalists in the mainstream media who regurgitated sales pitches without much critical analysis and I moved on to something a little more concrete. I started looking at individual projects and asking, okay, how is web3 going? And what I found was: web3 is going just great.
I looked for projects that actually needed a blockchain and were credibly changing the paradigm in the direction of these stated web3 ideals. More often than not, I found projects that were rowing in the completely opposite direction.
Play-to-earn games introduced a rentier class of managers who oversaw low-wage workers in countries like the Philippines, Vietnam, and Venezuela and took a cut of their earning in exchange for just letting them play the game in the first place.
So-called web3 publishing firms sought to reinvent DRM, imposing even more limits on how textbooks or other material could be resold so that companies could squeeze out even more money from their users at more steps along the way.
Platforms that promised to empower artists who previously struggled to sell their digital art were full of stolen artwork, siphoning money away from the same digital artists that they claimed to empower. And those artists had to take time away from creating their artwork to find the stolen art, and then submit onerous takedown forms to OpenSea, and LooksRare, and Rarible and an endless list of other NFT platforms. Some of those platforms honored the takedown requests and removed the sales listings. Others had policies of not removing listings at all because, after all, if you want to go all-in on censorship resistance, that means everything. Your sales pitches might focus on controversial art, or empowering artists under oppressive regimes, but it also means welcoming stolen artwork, copyrighted material, spam, abuse.
“Censorship-resistant” blockchain social networks became saturated with spam, driving away their actual users.
Users who were convinced to buy tokens to “invest” into the “future of finance”, the “future of the web”, were hacked and scammed and phished and rug-pulled.
Stablecoin projects promising to overcome the volatility that keeps so many cryptocurrencies from functioning anything like a currency ended in disaster.
And projects that promised to provide security and returns on people’s crypto holdings were demolished in a series of cascading failures that left people with funds they desperately needed either completely gone or locked up while bankruptcy proceedings were underway.
That was for the projects that actually existed. Companies lied about how widely used their products even were. Systems that were advertised as changing the world and already out there being used turned out to be in early beta testing phases or just vaporware. And when pressed on their many bold and confident claims, executives turned out to be talking about what one day might be possible, or the potential of this technology… once all the big problems were solved. But if there was one thing those executives were sure about, it was that you should buy their token, and you should invest in their startup, and they will figure everything else out later.
The thing about potential is that you can say it about anything if you don’t really have to back it up.
I could start going around with a pitch deck saying that the thing that will finally bring about the sea change in the web, and we’ll call it “web3”, is steam-powered computing. My slides might be very fancy, I might be very charismatic, and I might be able to paint a picture of a very utopian web that was once dreamed about that would be right around the corner once we all adopted steam-powered computing.
But it is up to the rest of us, the people who really care about the future of the web and dream of a better world, to determine whether it’s credible or whether it’s just a load of bullshit.
Now, the technology industry is full of people going around with their fancy slide decks, spouting bullshit about their “revolutionary” ideas. You get used to it, right? Most of us don’t waste our time pointing out every project that looks like it’s going to turn out to be bullshit because infeasible ideas burning out at the expense of some startup founders and some wealthy early-stage investors is an everyday occurrence that typically is pretty harmless in the grand scheme of things.
But when an entire industry emerges, and begins to sell this idea to the general public that a better web is only possible through a technology that shows little indication of being up to the task? When it preys on people’s hopes for a future of a better web, and their fears about the effects of the current web on themselves, their children, and society to convince them to buy in—literally—to projects that may never even exist? When it sidesteps regulations on early stage investing through token offerings and convinces average people that their only way to financial stability is to bet their savings on technologies that they don’t understand because “this is the future!”
Then it’s worth paying attention.
Despite the depressing state of what’s currently being called web3, some people hold tightly to the idea that crypto and blockchains will democratize the web, solve wealth inequality, bank the unbanked, and maybe iron your shirts for you in the morning. I’m sure you’ve heard a lot of them speak here already at this conference.
So far, the primary successes of web3 have been in shiny marketing selling people the opportunity to invest in vaporware. In regulatory arbitrage, exploiting the fact that regulators have been slow and hesitant to act on unregistered securities offerings. And in outright scams and grifts. Many people in crypto say they welcome regulation—again, you’ve heard that here— as though it is not the lack of regulation that has enabled so many of these projects in the first place.
So many problems in today’s web are driven by capitalistic forces driving ruthlessly towards the enrichment of monopolistic tech companies rather than the betterment of society. You’ll have to excuse me for doubting that our utopian web dreams will be achieved through the introduction of a hypercapitalist technology that aims to financialize everything on the web even further, and exposes user data on public ledgers where it can be scraped by even more tech companies than are profiting off data today.
There will be a web3. The web has been evolving ever since its inception, and there is no doubt in my mind that we are overdue for a fundamental shift. Will it be blockchains and crypto? Venture capitalists and blockchain startup founders really hope that you think so.
I hope that the rest of us will continue working towards utopian goals like the ones I mentioned earlier—the ones that many people who are working in web3 and on web3 projects share—without necessarily being shackled to a technology that holds little promise for the web.
Revolution is possible. But it’s unlikely that we will be fighting for revolution alongside the same venture capitalists and tech companies who helped to get us into this mess in the first place.
As technologists, our duty is to develop responsibly, and we should be striving for more in the web, pushing to evolve it into whatever web3 may turn out to be, and chasing those ideals that could make the web truly wonderful.
But when presented with lofty promises we have to remember to distinguish the steam-powered computers from the truly revolutionary.
Dig deep. Ask the hard questions. Criticize the flaws. And cut through the bullshit.
Disclosures for my work and writing pertaining to cryptocurrencies and web3 can be found here.