Web3 Is Dead; Long Live Web3
An affectionate response to The Startup Podcast Q&A, with Yaniv Bernstein and Chris Saad
At NotCentralised, we believe in the power of emerging technology to reshape economies. However, like anything disruptive, the process of “emerging” technology transitioning to “emerged”, is bumpy. Let us start by saying — we have a huge amount of respect for the time, thought and effort that goes into producing quality content like The Startup Podcast, which you can find here:
And so my cofounder Mark and I took great interest in the latest show, which posed the question “Is Web3 Dead?”. We collected our thoughts from the chat between Chris and Yaniv, and we share them here.
Zombieland
Yaniv opens pondering how something can be dead, when “never alive”. This is a little strong, though I do appreciate it’s tongue in cheek. Yaniv concedes that of course the definition of “web3” is key, and certainly nobody has nailed it!
Yaniv mentioned “ownerless” when describing some of the goals of a decentralised internet, as part of the web3 meme. However, far from it — the web3 ideal is that EVERYONE owns the infrastructure they use, via tokens, rather than a centralised authority such as Meta or Google owning data AND identities, which is monetised via advertisers for their gain, not the user.
A Violent Origin Story
Yaniv calls out the awkward mixture of ideology and technology, in the primordial soup of web3. We feel this comment is well made. You cannot go far into crypto / web3 without running into questions of politics, philosophy and economics. That is because the technology forces shifts in thinking about established structures and incentives. But, that is changing quickly with institutionalisation of the space, eg the Blackrock BTC ETF and the 21 CBDC pilot projects running globally (as at June 2023). The focus is increasingly on technology and benefits, rather than ideology.
True, the origin story for BTC was not a faster, nor cleaner way of transferring fiat currency. Rather, it was a new paradigm of freeing citizens from reliance on centralised, traditional banks which had just collapsed, violently, in 2008. Was your money safe then? Well, no, and that is a BIG problem. There was a strong thread of libertarianism, anti-establishment and anti-authority narrative, which remains with many bitcoin maxis today. That stance softened (arguably) with Ethereum, which was more about better functionality, programmability, smart contracts etc. All the while keeping hold of the amazing technology of blockchain and trustless, decentralised compute.
A Fictional Problem Statement?
In terms of Yaniv’s comment that web3 is/was “a tag line for a bunch of technology not solving a real problem”. But, I would counter that by (again) pointing to the blockchain origin story. 2008/09 was a big f’ing problem! Ask anybody like me trying to run credit or fixed income funds during that time. Inflation too is now a big problem, in large part from successive rounds of QE / money printing that began in the post-GFC era. The aim of BTC was and is an ultra-sound form of value transfer with a predictable monetary policy — its source code. It cannot be manipulated based on the whims of central bankers or policy makers.
Another example; digital property rights through NFTs or other tokens are certainly a solution to a number of problems, if implemented effectively. A very contemporary example — the guy who had the @X Twitter handle ripped from him unilaterally by Elon, with minimal (if any) compensation, after having it for over a decade. Not possible with NFTs.
The Hype Cycle Giveth…
The lads rightly point to every new tech going through a hype cycle, and that cycle for web3 has high amplitude. Indeed, the internet suffered this in 2001, including Amazon, and look where e-commerce and Amazon are now. AI is undergoing the same thing, as I type.
Powerful Technology Underpinnings
Rightly, Chris and Yaniv see blockchain as incredibly powerful. BTC is, again per Chris, interesting in an era where armies and governments and central banks lose public trust. Chris states BTC will “survive and thrive”, and that Ethereum will stay “very, very valuable”. We agree with Chris. Chris also sees the provenance of real world assets (through NFTs / tokens) as valuable. Again, we agree, which leads to a question — what bit of web3 is really dead here? The over-hyped JPEGs, the ponzinomics of token incentives that do not work in a sustained way without VC funding. Here, we also agree.
Rome Was Not Built in a Day
At 15 mins Yaniv states “…nor does it look like it’s going to…”, with respect to blockchain improving the way data is handled, the internet is orchestrated and monetised etc. Steady on. Mate it’s been just 15 years since BTC began, as the MVP of public blockchain. It’s way too early to make that call.
As a reminder — 1969 the first internet message was sent; in 1983 the DNS system was born (14yrs later); in 1989 world.std.com became the first commercial provider of dial-up — 20 years later; in 1991 the web went mainstream — 22 years later; finally in 2000 we hit 300 million people online globally — a full 29 years later. That’s a fair amount of time to ramp! Ethereum wallets now number 240 million globally (source: etherscan.io) which is just 8 years after main net — PS some trivia; July 30th is the anniversary. Chris agrees with our view at NotCentralised; that it’s super early to make that call.
Loveletter
All up, we love this podcast and show. Yaniv and Chris have valuable experience and perspectives. They speak from a viewpoint that is pragmatic and accessible for non-technical folks. We are pleased to lob in our thoughts, and we hope to riff with the boys in person, on our own podcast!
