Let’s talk about Web3. Web3 isn’t a clearly defined set of technologies or protocols or workflows, but Web2.0 wasn’t either really. Just like Web2.0, Web3 has certain technological foundations and assumptions but is just as much an aspirational term, a set of overlapping visions, ideologies and goals. In a lot of ways Web3 is doing something and calling it Web3. But with all the contradictions and unclarity a few things are foundational to Web3.
Let’s try a quick first attempt of a description:
Web3 is a blockchain-based backend and infrastructure layer on top of existing network technologies that aims at restructuring the internet in a radically decentralized and individual way. Services required for individuals to be able to act within that new infrastructure (like identity management, content storage, etc.) are provided by decentralized smart contracts or services built on them. While frontends to use the Web3 Internet still look similar to current ones (browser based apps) they no longer get their content from centralized servers but from blockchain-based content providers giving individuals enforceable ownership of the data and content they create or buy.
Web3 is not intended for you to throw your browser away. In fact many things are not supposed to change: You can for example write a comment under someone’s blog article. But that comment will not live on the server of that person but is stored in a blockchain and attached to one of your identities meaning that it can never be fully deleted. The original post might no longer show it but it’s still out there and linked to the original content.
Identity is quite important for that concept. Not in a legal ID kind of way, but in a “you have a set of identities you use that can have content/tokens attached to them” because tokens are only really useful when they have an owner. But Web3 kinda allows everyone to provide as many identities as they want, attach tokens to them and act on the Web, it’s not a “one person, one identity” system.
Web3 also is very invested in tokens (pardon that pun, I couldn’t let it go): Everything should be a token. A domain? Should be a token. A blog post? Should be a token. Your account on some form of Twitter-like service? Should be a token. Web3 turns everything possible into tokens because that’s what works well on blockchains but also to enable “real” ownership. When a domain is an NFT that someone owns there can never be a dispute about who owns the domain. It’s obviously who holds the token currently. Who can delete or modify (as in upload a new version) of some content? Obviously the person who holds the respective token. (There are also setups where through a smart contract multiple people hold a token and the contract defines the rules for how they achieve consensus about transferring the token.)
All of that sounds maybe a little weird but some things sound good, don’t they? Let’s dive into the beliefs and politics a little bit before I dive into some more opinionated remarks.
The beliefs and politics of Web3
Every technology, every artifact has politics. Some artifacts have political views built deeply into their structure and essence (a gun has the politics of violence built in for example). Other artifacts inherit their politics from the people and communities designing and using them. Both of these kinds of politics are very obvious with Web3. Web3 is not a mere technological update of the current web, a patch to bring in some new features and maybe fix some bugs but a complete technical but even more so a social and political redesign.
Sometimes that’s harder to see because Web3 services still look like the old services we know but underneath a new or at least a way, way more radical form of an already present ideology has shaped the structure of things.
As with everything the list of important beliefs isn’t complete, I picked the most important ones.
The Web3 community values decentralization a lot. Blockchains were developed in the aftermath of the recent global financial crisis when “too big to fail” banks almost dragged the global economy down to hell with them. That’s what blockchains were fundamentally built to avoid, and that’s an ideology that Web3 fully embraced. When you look at Web3 project websites you will almost always see “decentralized” as one of the key features.
Decentralization is used as somewhat of a stand-in, or maybe more precisely a precondition, to fairness and/or equality. Centralized systems are seen as not only untrustworthy and corrupt but also as a danger to Freedom because they allow removing or blocking content for whatever reason.
In addition to the decentralized approach Web3 loves transparency: Everyone can look at the blockchains and see what the truth is. There is no debate about the truth and no hidden information. Everybody knows the same and can therefore act accordingly. Transparency is the other building block for the Web3 that in connection with Decentralization is supposed to protect people and the integrity of the network.
Negative Freedom and Censorship
Web3 is based on a negative definition of freedom. That’s not a value judgment but a statement about how the concept of freedom is structured: In Web3, freedom means mostly freedom from restriction. The idea of (possible) censorship ties into a lot of Web3 thinking, and content deletion or restriction is one of the main cases Web3 proponents put forward to argue that the current Web needs to be replaced.
This very libertarian understanding of freedom also bleeds into a lot of the social and political construction of the Web3 services: “The State” or “The Government” is basically seen as clueless and evil with their “politics”. Continuing the conceptual path that J.P. Barlow’s “Declaration of the Independence of Cyberspace” outlined Web3 does not see governments as key players in their spaces: Governments are seen as a threat to freedom and while Web3 obviously can’t directly replace states and governments the idea of DAOs is often put forward as a better way of organizing people instead of the giant and slow structures of the political apparatus. Web3 sees rules as something to “buy into” by agreeing to a smart contract basically.
Code is Law
In Web3 there is no room for “politics” as in spaces where people debate something and try to find a decision. Instead structures are set up in ways that remove that human element by codifying what a structure does in its smart contract.
Our current web is built around many social and political systems. When for example someone squats on a domain that someone else has the registered trademark to, there are processes to “free” that domain from the squatter. But these processes are complex, not always fair or equal and usually a little messy. In Web3 it’s all about the ownership of the correct token. That’s the law. And there is no debate about how the law should be or could be applied. You own the token, you own the thing it references.
This belief removes the need for a lot of support that traditional systems have: If whatever the contract says is right and you did send your tokens somewhere they are no longer yours if you made that trade willingly or not.
Transactionalism and Ownership
Finally, as I already hinted at: Web3 is a web of ownership. Every object is owned by someone, every object can be traded to someone else.
Now we already have rules for who owns intellectual artifacts through law but Web3 makes these structures of ownership solid, transparent and unbreakable. Ownership can be sold or given and other forms of access are possible, too (I don’t need to sell you the token to my blog post for you to read it). But the ownership structure forms the basis for many new forms of economic activity that so far have not been reasonably possible: One could for example implement smart contracts that pay you something when some company wants to use your personal data – a thing some privacy activists have been arguing for for a while.
So these are key political ideas and beliefs that structure Web3 just as much as the technology blockchain it’s built upon. In fact blockchain itself shares many of the same leanings. This concludes the descriptive part. Let’s move to the final act.
So what could be the problem with Web3?
Blockchains neither perform nor scale
Ethereum – the blockchain a lot of that stuff is using – has the computational power of an old Apple II box. It uses as much electricity as Belgium for it but from a purely processing power standpoint that thing is slooooooooow. Like: An old Raspberry Pi computer can do more computation. And it’s not just processing power: Given that the network needs time to build consensus for every block, adding transactions is just ridiculously slow. Bitcoin currently can do about 4.5 transactions a second. FOR ALL OF BITCOIN. Ethereum is a little better and can do about 30 transactions a second. That is ridiculously low. The VISA network to process credit cards can do up to 24000 transactions a second (they currently do about 1740 a second). Try that number on for size.
Currently the Web3 services in existence might work because it’s mostly just a few nerds using them. They are architecturally not suitable to run anything at scale.
There are ways to speed them up of course. If you remove the requirement to form a consensus for example by defining one arbiter things get a lot faster but now you have a centralized database that’s just annoying to use.
Web3 is a security disaster
Credit card data gets stolen and if yours is that’s very annoying. You have to get a new card and call the credit card company that a bunch of transactions were fraudulent. It’s a hassle. But there are systems in place to protect you. They are not perfect but they work reasonably well.
With a blockchain based system all these protections go away because there is no “undo”. If you have your life’s savings in Bitcoin and someone gains access to your key, those coins are gone and you are shit out of luck. Given how easy it is to accidentally click on a wrong button, have people clicking on a phishing mail or just have people get their computer infected with a virus that risk is completely indefensible. If one virus can wipe out all your assets with no way to correct that mistake, that’s not a world we should ever want. We need more protections for people, not fewer.
Web3 is just an attempt to find a use case for blockchain
When an engineer looks into a problem, they will at first gather the requirements. What does the system they need to build need to do and how and for whom etc. Afterwards they will look at existing technologies and see which technology and platform fits best to the requirements. With Web3 it’s the other way around. People had blockchain which was really only useful to run unregulated security trading without paying taxes (“Bitcoin”) but really wanted to use it somewhere. Since in the 10 years blockchains have existed no real use case has emerged they just basically reshaped a problem (the web is centralized and controlled by a few companies) forced blockchain into it and claimed to have a solution. They do not and this marks another year where blockchain has not found a use case aside from tax fraud.
NFTs don’t do what they claim to do
Web3 wants to model even real world things or at least things outside of the blockchain through tokens, especially NFTs. But just because I created an NFT that claims I own the Mona Lisa (which someone of course did) I don’t own the Mona Lisa. Regardless of what the token says.
NFTs also don’t carry any legal rights to anything. You might own an NFT that has a link pointing at some crappy artwork of a monkey but you don’t automatically have a license to the artwork or are the actual owner. You own a thing that says you own the other thing. But has no authority over it. There are a whole bunch of competing blockchains and NFT contracts that all claim ownership to the same object. I can just create an NFT that points to “your” monkey and claim to own it. Why should your NFT be better than mine?
NFTs are very sexy because they feel so easy: You make a thing and now you can sell the thing – like it used to be. But people can still right-click the image and download it and use it. So what does “ownership” even mean in that context? What is ownership that basically gives you no enforceable rights? A great opportunity to be the laughing stock of Twitter when you yell at people for displaying “your” monkey?
NFTs are a strange grift and they are not even necessary for anything. If it really was about selling digital art we’ve been doing that for ages. Fortnite and all kinds of free to play games sell you cosmetic items for real money. People also have been selling digital art for a while. The game Diablo even had a marketplace to sell the digital objects you earned to other players. NFTs are not a revolution but a cumbersome reimplementation of things we already did or are already doing better and more efficiently.
The Oracle Problem
This is true for a lot of the Web3 (and blockchain) stuff that is supposed to say something about things and relationships in the physical world or about abstract or legal things. The problem is what we in computer science call the “Oracle Problem”.
Stated simply the Oracle Problem says that from within a system you cannot determine the truth of statements about the outside of that system. If your system is a computer program it cannot say anything about the weather outside because that is not within the computer. You can build sensors or interfaces that translate the weather into the computer but now everything depends on that sensor: Is it good enough? Trustworthy? Is it working correctly?
Web3 wants to nail all kinds of stuff onto some blockchain but a lot of that (like ownership of a physical object) could only be integrated through oracles you’d need to trust. There goes the “no authority”/”decentralized” approach. And if people pass the object around in the physical world without updating the blockchain? It all falls apart.
The belief that you can control the world if you just put references to things and relations in an immutable, append-only data structure is not just naive, it goes against any computer science 101 course.
Ever heard of the climate?
I gotta bring this one up. Currently Ethereum, the blockchain most people use for Web3 stuff uses about the amount of electricity that the Netherlands use because of its Proof of Work consensus algorithm. This is indefensible. This “world computer” that can do less than a 5 year old cheap smartphone creates CO2 pollution like a medium sized state. Even if we were in danger to lose the best writing on this planet to censorship (we are not) and even if only a blockchain could save the writing from deletion (it’s not) it wouldn’t be easy to argue that that amount of destruction of the environment would be worth it.
There is the claim that especially Bitcoin mostly uses renewable energy (it does not). But even if it did: Should we spend that medium sized country’s worth of energy on a casino for nerds or should we use it to power hospitals, transportation or heating houses?
Now I know Ethereum will switch to a more sustainable consensus algorithm in a few months. It has been switching in a few months for years now.
Let’s not even talk about all the e-waste that cryptocurrency mining does.
The blockchain and Web3 crowd talks big about human rights. But the right to a habitable planet with breathable air and no floods or droughts drowning and starving the poorest people on the planet is also a human right that is fundamentally opposed to using blockchains.
It’s based on pyramid schemes
Cryptocurrencies are a so-called zero-sum game: That means all the money that someone takes out, someone else has to put in. One person’s gains are another person’s losses. That’s an issue if you hold a bunch of those very highly valued cryptocoins but have no mark to sell them to for actual money. Which is one of the reasons why NFTs were made so big: They brought more people into the system who had to buy Ether (the Ethereum token) to create or buy their NFTs. And that’s money the people holding the coins can use to cash out. (Some people even call blockchains “negative-sum games” because while financially nobody can win without others losing the whole game destroys the environment while doing so, leaving the world worse off than it was before regardless of wealth distribution).
Knowing that, it’s morally wrong to bring more people into those spaces. Even if there were massively useful Web3 services (which there really aren’t) you are exposing people to extreme risks. It’s convenient to argue people’s free choice but I as a technologist feel a moral obligation to protect people from risks stemming from the use of certain dangerous technologies.
A system’s purpose is what it does and if what a system does is scams and pyramid schemes then that’s what its purpose is. And that is one system that needs to die.
It’s not delivering on its promises
Web3 promises a lot of stuff under the umbrella term “decentralization”. But it uses that term as an empty fetish replacing the required debates about fairness and equality and stake. Just yelling “it’s decentralized” doesn’t necessarily change power relations: Email is decentralized and my email server has the same protocols and shit that Google’s has, but they are not in any way the same. If Google blocks my mail server, I can no longer reach most of the internet. Decentralization is a hollow idea, a smoke screen to hide that the Web3 community has no answers to questions of fairness or even monopolies.
I do believe that some people came to Web3 for good reasons: They hate that the web is controlled by a few companies, basically monopolies. And they are right. But their new structure has no guards in place against that same dynamic happening again. The Web isn’t centralized because the technology is, our current web is also technologically capable to run decentralized. But the economics and social structures work for centralization. And they will with a Web3.
Their whole stack right now is already very centralized. There are only a few exchanges to buy and sell tokens, there are only very few NFT markets. Web3 hardly exists but it’s already centralized.
Transparency is just as hollow: What use is seeing that your tokens got stolen when you can’t do anything to get them back? Transparency without power to act is just cruelty.
Web3 is not apolitical but antipolitical
The Web3 crowd loves to claim to be apolitical meaning “everyone is welcome, we are neutral”. Aside from the question whether everyone wants to join a community that’s largely based on reactionary and right-wing libertarian ideas that’s factually untrue.
Web3 wants to take politics as we know out of many things but not to be “neutral” but to take democratic rights and rules for participation away. When only the code decides and there is no place for debate and political struggle, how do the disenfranchised get heard? How do the powerless organize and revolt?
Politics is about struggles. About people having different interests and fighting for them and often against their political opponents. Web3 doesn’t want to “stay out of it”, it wants it to stop. The world as organized by the smart contracts those with resources and skills deploy and you might be allowed to use.
Web3 is just a new space for accumulation
There is a reason that so many VC people are into Web3. That investors like Andreesen Horowitz are pushing Web3 so hard: It’s a new space for accumulation. Things that currently are not fully monetized and financialized can finally become vehicles of capital accumulation, can finally make VCs even richer.
There are parts of your digital life that currently you can’t really sell, but that’s what they want to change. Everything needs to be bought and sold, everything is just a vehicle for more speculation. The reason they want you to be able to resell your access token to some service (instead of buying or renting it like today) is to create even more markets for speculation and the smart contracts can be set up in a way that at every corner they profit.
It also is a political project: Teaching people that everything is property to be bought and sold is a right-wing idea that has very much fallen out of favour. Web3 is here to change that notion and after having all those pesky human rights challenged digitally challenging them in the analog will be that much easier: Why can’t you sell your kidney if you can sell all your data after all?
I understand a lot of the motivations driving people to wanting to rethink the web. The monopolies and power imbalances, the inequality and unfairness.
I understand that especially creative people are desperately looking for ways to make a decent living and selling NFTs looks like a very simple way to make some serious cash. I get it. We need to find a mode of life that allows people to work on their art or whatever else they want to do and still be clothed, fed, sheltered and otherwise taken care of. Comfortably.
But as much as those problems need solutions, Web3 is not it.
It’s not the solution because it just doesn’t do what it wants to do, it wouldn’t stop a new centralized entity from emerging, it wouldn’t distribute power in any meaningful way and it would actually take away important mechanisms that we currently have.
But there’s more. Web3 is a deeply morally offensive project.
The promise of the Internet of giving people access to information and potentially the power of publication is supposed to be replaced with an unregulated casino that literally burns our planet to the ground. I can hardly come up with anything this despicable.
Nobody is an island but the Web3 crowd wants to further individualize us, turn everything about our digital and ideally analog selves into objects for speculation with semi-automated trading of assets replacing politics. The full financialization and depoliticization of life with no regard for the ecological consequences.
This is not a utopian vision. This is a declaration of war against a lot of the political and social progress of the last decades. And I’m not willing to wave a white flag.