Why are people against Web3?
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Why are people against Web3?
Understanding the arguments against Web3.
TL;DR
Jack Dorsey (CEO, Block; Co-founder, Twitter), Elon Musk (CEO, Tesla, SpaceX), Moxie Marlinspike (CEO, Signal), Scott Galloway (Professor, NYU Stern) have all expressed their qualms about Web3.
Elon thinks Web3 is a buzzword without substance behind it.
Jack believes that venture capital firms own and control Web3 — contradicting the ethos of ‘decentralization’ that Web3 promises.
Moxie argues that Web3 is impractical as decentralized systems and apps are hard to build,
Scott doesn’t believe in the allure of Decentralized Autonomous Organizations (DAOs), thinks theft is a major concern, and that crypto isn’t decentralized at all.
Why are people against Web3?
Following the initial hype, there’s been a lot of debate around Web 3.
To debunk the key arguments, I've spent some time researching all points of view in order to stay grounded.
These are the opinions of some of the most outspoken, yet knowledgable people in the space.
Jack Dorsey says that large venture capital firms will own and control Web3.
It started with a flurry of tweets, with Elon slamming Web3 — referring to the term as a marketing buzzword.
This prompted the response from Jack Dorsey (Co-founder of Twitter, CEO of Block). In this case, the ‘a and z’ reference is to Silicon Valley’s venture capital firm, Andreessen Horowitz (or a16z in short), who has made $3 billion in investments in the space.
And so Jack continues his Twitter warfare. VCs refers to Venture Capitalists (such as a16z and Sequioa, some of the biggest players in the space), and LPs refers to Limited Partners, or the folks who bankroll the venture capital funds.
In summary, Jack is against Web3 as he believes:
The promise of Web3 — that users, not large tech companies can ‘own’ the next iteration of apps, services, and platforms on the internet — is a lie. Instead, it’ll be owned by venture capital firms like Andreessen Horowitz, who have poured billions of dollars into this space.
Instead, he’s bullish on Bitcoin and believes that it will replace the dollar.
Moxie Marlinspike believes that Web3 may be impractical for majority of people.
Moxie is the creator and CEO of Signal, an encrypted messenger platform that brands itself as ‘privacy-focused’. He’s also a well regarded as a cryptographer and computer security researcher.
In summary, Moxie is lukewarm on Web3 as he believes:
Decentralization sounds better in theory than in practice. Normal, everyday folks don't want to run their own servers, nor does the average layman have the competency to do so. Folks want ease-of-use and a good user experience.
Every product, platform, and company with significant adoption in web3 is currently centralized. See: OpenSea (NFT marketplace), Coinbase (crypto exchange platform).
Decentralized and distributed applications (DApps) are really hard to build.
Scott Galloway remarks that Web3 isn’t centralized and that theft is a serious concern.
Scott is a professor of marketing at NYU Stern (New York University). He’s also an author, public speaker, podcast host, and investor. Scott’s pretty well known to be extremely outspoken against tech companies.
Scott argues against Web3 as he believes:
Web3 is a hazy and vague term. It’s “Yogababble” — a buzzword used by people as an attempt to virtue signal.
It’s barely “decentralized”. The top 9% of accounts hold 80% of the $41B market value of NFTs on the Ethereum blockchain. The top 2% of accounts own 95% of the $800 billion supply of Bitcoin, and 0.1% of Bitcoin miners are responsible for half of all mining output.
Theft and corruption is a serious concern. Losses from crypto scams and thefts totaled $14 billion in 2021.
Decentralized Autonomous Organizations (DAOs) are ineffective. The claim is that DAOs are superior to traditionally organized corporations, but many have failed. P.S - here’s an article I wrote about DAOs.
Further Reading
If you’d like to keep reading, I’d encourage you to explore the first two links below. They provide another excellent perspective on the discourse happening between the most engaged people in the space.
And if you found this useful, you’d probably enjoy my Tweets too. Follow me on Twitter.
Why it’s too early to get excited about Web3 — Tim O’Reilly
The Web3 Debate — Not Boring
The first impressions of web3 — Moxie Marlinspike
Web3 — Scott Galloway