Elon Musk is correct: Web3 is nonsense

I’ll be honest, I am not a big fan of Elon Musk. Despite running unprofitable companies, he became a billionaire by being an ignorant, narcissistic, reckless, self-indulgent buffoon who treats his employees like crap.

M. Musk, however, recently retweeted something that I wholeheartedly agree with: “web3 sounds like bs”.

According to Bloomberg, Web3 proposes developing a decentralised World Wide Web by leveraging blockchain technology. In this concept, proponents like to explain how Web 2.0 became centralized and controlled by big corporations, and how blockchains, crypto and NFTs can help bring back control to individuals.

On paper, everything sounds great, but in practice, it’s just bullshit.

WebBs

Web3 is indefensible on a number of levels, but most importantly, it confuses a political and power-relationship issue with a technological one. Blockchain can finally enable the Web to return to its decentralized roots, say Web3 believers. Truth be told, blockchains are not only useless in accomplishing that, but we are already able to do it.

ActivPub is a protocol which has been around since the ’90s, and which inspired federated, decentralized social networks such as Mastodon. Each community can control its own ActivityPub instance – even individuals can create private server instances which are controlled by them, and federate them with other instances. People can easily control who can access their feeds, and what sort of feeds they are shown.

What’s the reason we haven’t seen a mass exodus from Twitter and Facebook to Mastodon, or similar platforms? Everything is in place – all that is needed is for you to register and make the switch.

Due to the fact that platforms like Twitter have already gained enormous power and influence, and have a large user base that simply stays near the people they follow, this has occurred. The idea of switching to Mastodon is gaining traction, but many people are returning to Twitter soon after, since that’s “where the action is”. A company like Twitter spends millions on “customer retention”, in addition to helping large brands improve their presence online and giving users a variety of reasons to stay and stay with Twitter.

As a result of social media’s monopolistic nature, other companies benefit from their advertising and marketing campaigns – benefits the wider capitalist system. Our current system naturally leads to the monopoly of the big players.

It isn’t happening because of lack of a certain technology, and there isn’t a technology that can solve it. There are already tools for creating a decentralised web, and blockchain technology isn’t even necessary.

Blockchains, NFTs and crypto-bullshit

A blockchain is a digital ledger in the form of blocks of records. Using a peer-to-peer network, such a database is managed autonomously, therefore there is no central machine controlling the entire infrastructure. The nodes on the network are instead responsible for controlling everything collectively.

Blockchains are primarily used for recording transactions, and this is the only reason for their utility. I admit this is a fairly clever way of avoiding the double spending problem – when an electronic token is spent twice (or more than once), i.e., transferred to more than one destination at a time. Consequently, blockchains are primarily used for digital currency and artificially scarce digital assets (Non-Fungible Tokens, or NFTs).

Although NFTs have been discussed for recording things like deeds and property titles, it makes little sense to use blockchains for storing anything physical or requiring off-chain validation, authorisation, authentication or confirmation – even if the use of oracles is taken into consideration. Decentralized applications (dapps) are always tied to crypto, and blockchains are only appropriate in a digital-only world.

This is why when some Web3 evangelists talk about how social media is centralised and how blockchains can help, you know they’re bullshitting you.

Social media posts are not transactional data. You may have “likes” that you can give to posts, but the double spending problem is not relevant here, because you have an unrestricted and unlimited supply of “likes”. We already have decades old technologies like PGP which can prove the authenticity of a post. We already have distributed, peer-to-peer technologies allowing for censorship-proof, decentralised storage of data (such as WebTorrent used by PeerTube).

Unstoppable Domains looks okay on paper, but it’s a for-profit solution that isn’t really as decentralised as it pretends to be: you still have to go through UD to purchase domains. Moreover, getting around a DNS block is quite trivial, and “unstoppable” domains won’t solve the problem of a hard IP block by your IPS if used as a DNS provider.

IPFS is an interesting project, and it was already used to combat censorship. However, the pricing model is slightly obfuscated, the cost of “pinning” (permanent storage) is a few times higher compared to regular storage solutions. If you’re using a company like Pinata to host (“pin”) your content and guarantee its permanence while you pay a monthly fee, you should start asking yourself how much decentralisation you are really left with if you still rely on your hosting provider and on the caching policy of independent nodes. Moreover, we already have magnet links, Tor Onion services and platforms like FreeNet, which is nearly 22 years old now (the web itself is only 9 years older).

The technology is already here! We have had similar technologies for decades now! …and new technology is not what we need to fight the enormous power of the biggest platforms. That’s bullshit.

Bullshit radicalism of venture capitalists

The venture capitalists are having a blast – they can suddenly pose as radicals who want to “disrupt centralized intermediaries” and create an Internet that belongs to its creators, users, and builders. In order to take on “the big guys”, they can pretend they are the voice of a rebellious generation. By making the point that the only reason that VCs invest in Web3 projects is to make a profit, I’m not really breaking news.

It seems that many Web3 projects are only perceived as “decentralised” because they use permissioned (or hybrid) blockchains, which allows the company to add or remove tokens, but which also allows token ownership to be traded independently. There is no such thing as real decentralization without a fair and just distribution of power, as some authors have pointed out. Neither cryptocurrency nor Web3 accomplish this. We can see where this leads by looking at the (completely unsurprising) distribution of wealth in Bitcoin, for example.

Web3 crowd technologies are nothing new, as demonstrated above. All of these projects revolve around DeFi and cryptocurrency, but the main difference here is that all of them revolve around DeFi. Web3’s appeal to VCs stems from the desire to prolong the crypto-bubble, which is the real motivation for them. Increasing the value of speculative assets associated with the projects they have already invested in will help make those projects more relevant. Cryptographers hope to inflate prices by encouraging more people to buy crypto and entering the market with more money. Neither decentralization nor freedom nor censorship matter to them. They just want to make as much money as possible before the bubble finally bursts.

When the price of Steemit’s cryptocurrency dropped in 2018 during a market crash, the blockchain-based social media and blogging site was forced to fire 70% of its staff. The business plans of these platforms rely solely on proprietary cryptocurrencies and tokens, as well as their circulation.

What fuels this way of thinking is the ubiquitous technocratic point of view, which, in the shadow of Fukuyama’s “end of history”, sees the world not as a conflict of different concentrations of power, but simply as a place where “bad ideas” need to be replaced with “better ones”. Shiny new technologies devised by smart people will bring about a substantial change.

But, as I said before, the problem isn’t a technological one: it’s a political one. If we truly want to confront the power held by the big social media companies, we need to go in the opposite direction to what the Web3 cult is trying to take: look at the profit motive within the industry, look at adequate regulation. I’d go as far as saying that the only way to solve the problem with large social media companies is to remove business and profit from the whole equation.

We should look at how certain aspects of decentralisation, in the context of cryptocurrency, provide owners of capitals different avenues for abuse and allow them to perform money laundering, wash trading, and general market manipulation. Finally, if we look at Onion services, they are predominantly used by black markets.

A radical standpoint would be to further democratize our monetary system and to look at getting rid of money entirely in the far future. Bitcoin isn’t radical — it’s a step backwards, towards marketization, not democratization, giving more power to owners of capital. I always find it hilarious when people sugest that cryptocurrencies are confronting any power — big banks already invest hundreds of millions of dollars and profit from cryptocurrencies. Crypto might make them feel at most uncomfortable, but not threatened.

Likewise, Web3 backed by venture capitalists won’t confront any large power. I think it’s a fad that will fade away, but even if it gains foothold, it will only shift power from the Big Tech to the VCs — not to the people. Don’t get fooled by their marketing campaigns. It’s all bullshit.

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