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Web3 is Bullshit

If you read tech journalism you’ll probably hear the fuzzy term web3 bandied about in the press. Sprinkled around all these articles are all manner of idealistic and utopian ideas about how we can rebuild the internet to reflect our aspirations of a more humane and egalitarian society. However the journalists never quite drill down into the details on the mechanisms of how the internet will be remade. Because after all tech writers are in the storytelling business and a myth about the rebirth of cyberspace makes for a ripping yarn far more than mundane skepticism of a hyped technology.

Yet when those of us who are in the chips, bits and packets business look into alleged engineering details they’re always either complete hand wavy woo woo or dreams overleveraged on perpetually-over-the-horizon blockchain tech searching for tomorrow’s problem to justify an investment today. Just buy my token today to secure your stake in a better tomorrow. It’s the age-old pitch of charlatans and snake oil salesmen, except this time around it’s being pushed by world’s largest investors who have deep bags of tokens to dump.

At its core web3 is a vapid marketing campaign that attempts to reframe the public’s negative associations of crypto assets into a false narrative about disruption of legacy tech company hegemony. It is a distraction in the pursuit of selling more coins and continuing the gravy train of evading securities regulation. We see this manifest in the circularity in which the crypto and web3 movement talks about itself. It’s not about solving real consumer problems. The only problem to be solved by web3 is how to post-hoc rationalize its own existence.

The blockchain offers nothing new or worthwhile to the universe of technology. It’s a one trick pony whose only application is creating censorship resistant crypto investment schemes, an invention whose negative externalities and capacity for harm vastly outweigh any possible uses. Every single problem proposed to be solved by blockchain hits up against three fundamental technical limitations that inescapably arise from economic or legal concerns. The three technical issues of the narrative are:

  1. The Compute Problem
  2. The Bandwidth Problem
  3. The Storage Problem

On a compute basis, blockchain networks don’t scale except by becoming the very same plutocratic and centralized systems they allegedly were designed to replace. There is an absurd cost to trying to do censorship resistant computation. In this regime there is a hard incentive to minimize program execution time because the entire network is forced to recompute every single program as part of it’s insanely wasteful process of attempting to reach consensus about a giant global state machine. This inevitably drives the cost per program instruction into the stratosphere. The Ethereum virtual machine has the equivalent computational power of an Atari 2600 from the 1970s except it runs on casino chips that cost $500 a pop and every few minutes we have to reload it like a slot machine to buy a few more cycles. That anyone could consider this to be the computational backbone to the new global internet is beyond laughable. We’ve gone from the world of abundance in cloud computing where the cost of compute time per person was nearly at post-scarcity levels, to the reverse of trying to enforce artificial scarcity on the most abundant resource humanity has ever created. This is regression, not progress.

And then there’s the inconvenient truth about the bandwidth problem of both computers and human resources. Blockchain solutions are vastly more expensive to maintain than centralized solutions, and centralization always wins purely from its ability to physically serve data over a network to customers more efficiently. For this hypothetical proposed decentralized Facebook there are several inescapable logistic questions. Who will pay for the global data centers to serve content? Whose lawyers will respond to the DMCA requests? Who is going to ban the Nazi accounts? Who will issue deletes on CSAM content? Who will reset grandma’s password when she forgets? Running a global business on this scale requires an inescapable amount of centralization just by the brute fact of having to exist and interact with the rest of the civilization. If you introduce centralized data centres and processes to handle all of the messy human interactions, well then congratulations you’ve just recreated Facebook by another name.

Finally there’s the notion of the storage problem, which taps at the heart of what many argue is one of the biggest societal questions of the 21st century: “Who owns our data?”. The web3 narrative is incredibly antithetical to the notion of data deletion because the technical underpinnings of append-only and immutable databases don’t admit this operation by design. Yet every new business model must cross the bridge about customer data visibility and who they will let on the platform. Who’s servers will have custody of your private family photos and who get’s to determine those access controls? And these are questions that are not about consensus algorithms, distributed databases or cryptography at all, they’re inescapably questions about power, privilege and access. Technology won’t save us from having to ask the hard questions of who should have power to control our digital lives. The answer will always be somebody, it’s just a question of who.

The shortcomings of the web3 narrative are easy to deconstruct from a technology perspective, but to play devil’s advocate—what does it succeed at? It’s very possible it truly is a paradigm shift in financial deregulation, and will usher in a new anarcho-casino-capitalism world where every fourteen year old kid can launch a fly-by-night Ponzi scheme and pump it on social media all from the comfort and anonymity of their parent’s basement. A hustlers’ paradise with a 24/7 non-stop casino built on a Cambrian explosion of slot machines, with each machine grown out of a different facet of human culture whose likeness has been co-opted to seduce you into gambling more. It’s the apotheosis of capitalism where the market now provides a financial token game for every meme, every celebrity, every political movement, and every bit of art and culture—with each tribe competing against each other in a war of all against all for the hyperfinancialization of all human existence. Is that the world we want to live in?

Web3 is a deeply polarizing topic for technologists because it’s designed to be that way. It’s a rhetorical trick to set up a false dichotomy between the legacy internet world of popup ads and Zuckerbergs—which legitimately does suck—and a fantasy world built on technologically incoherent pipe dreams and phoney crypto-populism.

It’s almost only nerds who read my blog, so I’ve assumed everyone has either read Herbert’s Dune novels or at least seen Villeneuve’s latest masterpiece. The best analysis of the novel was written by another internet pioneer O’Reilly (same as the animal books) who wrote a brilliant analysis about the tragic hero of Paul and how some populist causes arise out of desperate and misplaced grasping at heroic solutionism.

Their strong, unconscious projection makes him even more special than he is. This projection stems somewhat from the legends generated by the Bene Gesserit and the way they crystallize around Paul, but even more from Paul’s followers’ “wishful thinking”—their unconscious belief that someone “out there” has the answers they lack. Unable to find adequate strength of purpose in themselves, they look for a truth—a cause—and a leader to supply It.

Web3 is that technical manifestation of this empty grasping for a messianic solution that’s going to solve all our problems. It’s entirely rational to want to build a more decentralized technology stack and to aspire to a more egalitarian internet, a more equitable society, and a better world. However web3 is not the golden path that leads us to that world, it’s the same old crypto bullshit just packaged up in a sugar pill to make it easier to digest.