Valid Criticisms of Web3 — the evolution of technology
I was a little late to the blockchain party — it wasn’t until early-mid 2020 that I had started to grasp the concept of decentralization and the underlying value of Web3.
To give some context, I began building Tokn Music in early 2021; we’ve created a music investment platform for streaming royalties.
My goal here is not to shine a negative light on blockchain, rather highlight the flaws that many people seems to ignore and simple solutions can create a safer and more inclusive industry for everybody.
Hacks & Scams
This should be the most glaring red flag for everybody in web3, however, many who participant in Web3 turn a blind eye.
Just a couple weeks ago, $625M was hacked from Ronin wallet’s users, and most people haven’t heard a thing. In Q1 of 2022 alone, there was a loss of $1.23B.
I know the crypto community feels like “infrastructure is still in its early stages” — “it’s not like Web2 was born in a day either” — “Web3 offers a more efficient system if used properly”.
I understand; the dotcom bubble lost trillions as well — web3 is still a developing technology and these roadblocks are bound to happen. However you can’t have your cake and eat it to →
Anti-Regulation
Many in web3 are against government regulation and integrating web2 components within web3. I understand the sentiment, but there is no way for this industry to gain mass adoption without regulation and web2 integration.
Billions has been stolen or lost and this trend is continuing.
I can see why some projects will argue that regulation takes away from decentralization, but if a project's main (or only) selling point is the fact that it’s decentralized, it might not be worth investing your money.
On a positive note, we can see KYC processes becoming normalized. This is not just beneficial for the safety of the users, but for the growth of web3 as a whole.
If Web3 reaches its intended future, governments will crack down hard.
I’m not asking for immediately strict regulations, Web3 still needs room to grow and innovate. Right now, we should start imposing systems that help ensure the security of users.
Everybody has their own dead-set opinion on how blockchain should be utilized since the beginning.
The community has decided the trajectory of this industry, but sometimes trajectories have to adapt over time. There was never an intended ‘vision’ of web3, just an open interpretation →
Due Diligence
The amount of money being dumped into web3 is stupid and the problem is two sided:
- Companies build without a real purpose and end up exploiting their users, rug-pulling, or building lack-luster products that act more like a ponzi scheme than a solution to a problem.
- People eat it up. Too many people see Web3 as a piggy bank that makes money go up without ever doing in-depth research into the projects, founders, solutions, technology, etc.
As an early contributor to Web3, it’s important to do research. Since there’s not much regulation, independent research is crucial.
I know it’s a pain, but if you’re actively investing, there is a higher than average likelihood that you’ll be scammed.
Do your due diligence and stay safe out there.
Final Note
Although I’ve spent a majority of this article disputing web3, there is still a bright future.
The technology behind the hype is groundbreaking —we can create value in industries that desperately need it, remove third parties, increase the safety & efficiency of transactions, give power back to the consumers, and the list goes on.
In the end, I firmly believe that web3 is here to stay — but it will look drastically different in 10 years.
We are in the wild west right now, and we should create a sustainable ecosystem with better regulation and education.
