Dear Crypto, NFTs, DAOs & Web3 fans : I have some questions
I’m confused about Web3’s building blocks. Crypto, NFTs, the Metaverse, DAOs, Blockchain… I’ve thought about them, created them, sold them, bought them and written about them. I still don’t really get it. I bet you don’t either.
Instead of looking for answers, I have resigned myself to asking questions instead. There is a good reason for this. Proponents of these technologies constantly and consistently fail to calmly and intelligibly explain why they are good for the world. By being specific about what’s being asked, I’m hoping to create an environment within which a discussion can be had. If you can’t good answers… ask better questions. Below is an attempt to do that.
What’s wrong with centralization?
Is decentralization a safe word for the tech community? If that’s the case, the regularity at which it’s uttered is proof no one aboard the good ship Web3 is feeling very safe. I understand that in the context of Web3, decentralizing means having the freedom to own one’s data, and the freedom to choose what to do with it, across a galaxy of applications. That’s great. But must we be so adamant about it?
Is centralization such a bad thing? I like that the government centralizes trash collecting. I like living in a place that has a centralized set of laws, like age of consent. I like that Google centralizes my search results. Heck, you may as well call the United States the Centralized States of America, as it’s how the supposèd land of the free came about.
Isn’t centralization a spectrum anyway? I’m sure many of the arguments promoting crypto would be better heard if people on Twitter were not so binary about the topic.
Who wants to build and own a platform?
One of Web3’s core idea is that we own our digital assets, not the companies in/on/for which said assets have been created. In order to fully own your data, you’d have to store it locally, in your own home, right? That would mean owning and operating your own servers, right?
I’m an adult. I pay taxes. I own cryptocurrencies and create NFTs. I do not want to run my own servers. Even organizations building software full time do not want to run their own servers. As such, we will continue to rely on corporations to build APIs that can plug into existing tools so that we may access various blockchains.
I struggle to understand how that’s different from Web2. Is it a question of choice again? I can choose to create my own API if I want? I’d like to understand how we aim to convince the majority to use anything more complex than a browser. If you’ve ever spoken to anyone over the age of 50, you know what I’m talking about.
Is Web3 really decentralized?
Let’s assume decentralization is good, and that we should work in that direction. Then why are platforms like Coinbase and OpenSea, which cater to Web3 fans, so prominent? Are they not a centralizing force in an universe that claims to want none? Are they not able to remove users if they break the rules? Could they not launch competing assets alongside those of their users?
It’s impossible to access a blockchain on one’s own browser or mobile. So, we have to rely on APIs, as described above. The best APIs, from the best companies, will gain more clients and become the standard for the industry. Sure, new companies can be created to access the underlying asset that is the blockchain. But will they be able to compete against the brand recognition of established player? That would be assuming perfect information in the market, something we know does not exist in the real world.
Looking beyond the platforms, we see that the top 9% of accounts hold 80% of the $41B market value of NFTs on the Ethereum blockchain. Bitcoin is even more centralized: the top 2% of accounts own 72% of the $800 billion supply of Bitcoin, and 0.1% of Bitcoin miners are responsible for half of all mining output. None of this is tenable in the long term for a technology that claims to be democratizing in nature.
Smart people will argue that decentralization is not a key feature of Web3. For them, I have more difficult questions.
Is it really the “early days”?
People proudly chanting that we’re still in “the early days” do so in the hope that more people will buy their assets, as it’s the only way they will go up in value. This is the very definition of a pyramid scheme, and I’m tired of pretending we’re not all seeing it.
Bitcoin has a trillion-dollar market cap and is the 10th most valuable asset in the world. Ethereum is #15. Large companies are now buying these assets. That’s not a sign of being “early”. And yet, I’ve never used Bitcoin and Ethereum for anything other than to make a quick buck.
Bitcoin has been around for a decade. When the web was the same age, it had half a billion users around the world. VR headsets first came out 2 decades ago. The idea for blockchains is 30 years old. If it was ever going to be anything but a speculative asset, we’d know about it. Wouldn’t we?
What’s up with the scams and thefts?
Is there anything else? I’m actually asking. Has anyone purchased anything with cryptocurrencies, except other crypto, dollars, or NFTs? Has anyone used NFTs for anything other than wild greed? Is there a single DAO out there that has managed to scale? If not, what are we doing here?
Is it inevitable or are you working for someone else to make it true?
Many large investors have been making headlines recently because of their wild investments. They’ve got a lot of money riding on Crypto, NFTs, DAOs & Web3. Dozens of billions. Logically then, they will do everything in their power to facilitate a widespread adoption of these technologies. And they’ve got a lot of power. A lot of money and influence, too.
This should make us question whether these technologies are truly revolutionary, or if they’re being driven forward by people who have put millions of dollars into ensuring its success, and cannot afford to see it fail.
Amazingly, even as millions are (unknowingly) doing Venture Capitalists’ bidding… they’re still failing to turn a profit. Doesn’t that tell us everything we need to know about the industry’s health?
Do you think it’s the next big thing… or do you need it to be?
These technologies are fascinating. But people aren’t dropping everything because they believe it’s the future. They need the premise of a new paradigm to be true. They need it to be true because the world absolutely sucks.
We can’t afford homes. The world is burning. We live on platforms that literally thrive on anger and discontent. Corporations post memes on Twitter as they enslave children abroad. We wish upon shooting stars that are actually billionaires going to space for fun. We laugh at cows wearing VR headsets, while letting Netflix automatically play the next episode.
There is nothing to do except gamble. Web3 offers an escape. A community in a world that’s sorely lacking them. A place where we could build a better world. Or at least gamble it all, because what have we got to lose anyway?
You know what? I don’t want an answer to this question.
Good luck out there.