Web3 is just another serving of the same old crypto nonsense

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You have probably, unless you’ve been unusually fortunate, been schooled in the wonders of Web3. Let me explain for the few remaining fortunate. Web3 is the inexorable destiny of the internet — the magical fabric from which blockchain-based decentralised dreams are made and dystopian big-tech nightmares destroyed. The future is bright; the future is “append-only” databases.

The central thesis of Web3 is that because the internet has become so centralised — with power concentrated in the hands of a few, and users powerless over their own data — we need a more distributed, egalitarian, open system. So far so good.

However, the Web3 vision is filled with gaps that you can see beneath the surface. It is techno-utopian advocates say they want to harness the alleged power of blockchains — the immutable databases that underpin bitcoin and other tokens — to create a democratised internet where you control your own data and are no longer reliant on the big tech giants. Web3, the argument goes, will allow you to “own a piece of the internet”. Naturally, the “decentralised” apps and organisations that operate in this brave new world are powered by crypto tokens: all you need to do is buy them.

In truth, Web3 has become just the latest marketing term used to try to prop up and repackage the overlapping ideas of crypto, non-fungible tokens, and “decentralised finance”, which all seemed brilliant innovations until The entire market began to sink. No matter that blockchain — once touted as the solution to everything from corrupt elections to supply-chain fraud — has totally failed to live up to the hype and only proved its usefulness as the enabler of the crypto casino. This time it will be different.

Web3 is a similar product to many others, so it’s hard to talk about it. overhypedConcepts are a very complex term. Last weekend, I was involved in a heated argument with someone who claimed Web3 was about banks using data to predict your divorce and lower your credit rating. That was Big Data and artificial Intelligence, I argued. This has nothing whatsoever to do with distributed ledgers or blockchains. But just like the metaverse and the “Fourth Industrial Revolution” before that, Web3 often seems to be used to mean something along the lines of “techy stuff that could do stuff in the future”.

The idea of “the web” is derived from the fact that we have seen two iterations. The first, which was launched in early 1990s, lasted only over a decade. It was primarily static web pages and wasn’t interactive. The second, which arrived in the early 2000s but continues to this day allows users to upload content to the internet. However, they unknowingly become the product.

Web3’s most dangerous and disingenuous aspect is its false claim that it is about decentralisation. Its biggest backers are Andreessen Horowitz — or a16z — a venture capital firm with billionaire co-founders and assets under management of more than $28bn, which launched a $4.5bn Web3 fund earlier this year. It seems that multi-billion dollar fund launch is quite a concentration of wealth. However, this firm happens to be a major investor in Web2: for example, it holds a stake at Meta, the former Facebook board on which Marc Andreessen, cofounder of a16z, sits.

“Power . . . is just becoming re-centralised in the hands of a small few other investors, in some cases the same exact people who hold so much power in the current web,” according to Molly White, a software engineer and author of the “Web3 Is Going Just Great” blog, who is one of Web3’s leading critics. “I do think there are ways to achieve decentralisation on the internet,” she tells me. “But I see those solutions necessarily as being based in societal and policy change rather than in pure technological change.”

Meanwhile, firms like a16z-backed crypto exchange Coinbase — which, until recently, was raking in hundreds of millions of dollars’ worth of profits every quarter — are positioning themselves to be “the default gateway to the Web3 ecosystem”. It’s quite bizarre that an internet that emphasizes openness, decentralisation and transparency would need a corporate behemoth for entry.

Web3 is not about making the internet fairer or less liable to exploitation by greedy fat cats, it’s actually the very opposite: it’s about introducing yet another layer of financialisation to the web. It is far simpler than the technical jargon that you’ll have to listen to when someone explains it to you. Web3 is just another way to continue the crypto bullshit. Stinking is just as bad as ever.

jemima.kelly@ft.com

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