The argument began when Elon Musk tweeted a vague comment about something crypto-related: Web3 in this case.
Web3 is a vague concept that places a decentralized blockchain-based infrastructure beneath a new, more private Internet devoid of the influence and control of Big Tech.
Read more: PYMNTS DeFi Series: What is DeFi?
That’s the idea, at any rate.
On December 21, Dogecoin- and Bitcoin-Boosting CEOs of Tesla and SpaceX tweeted, “Has anyone seen web3? I can’t find it.” suggesting that Web3 is essentially vaporware, a point he made on December 19 Tweet What Web3 called “more marketing buzz than reality right now”.
Has anyone seen web3? I do not find it.
— Elon Musk (@elonmusk) December 21, 2021
Twitter founder and CEO of Square aka Block platform Jack Dorsey weighed in on Web3’s location. Saying: “It is somewhere between a and z” – a reference to a16z, the blockchain and crypto arm of top VC Andreessen Horowitz. Musk immediately replied with reference to M31, another venture capital firm.
Dorsey – a bitcoin “maximist” who was on Monday (December 20) tweeted He Will Replace Bitcoin Dollars – Ran With That Ball, Tweeting: “You Don’t Have ‘web3’ unit. Know what you are doing…”
This is not a popular opinion in the crypto community. Eric Voorhees, founder of ShapeShift cryptocurrency exchange, replied: “Saying you don’t own web3 because VCs own some of it is like saying you don’t control your bitcoins because VCs control some too.”
When another pointed out that Dorsey has taken a lot of VC money over the years, he reacted, “And that’s why I know exactly what I mean.”
Who owns Web3?
The idea behind Web3, also known as Web 3.0, is that it will be the next evolution of the Web.
It calls Web 1.0 the Internet of the AOL-era, in which content was behind a “walled garden” of Internet portals that curated what you saw.
Web 2.0 is the current Internet, in which search engines form an interactive community in which corporate websites, user-generated content and social networks all compete for attention.
Web 3.0 is an open-source, censorship-free place where you can own your identity and choose how to share your personal information, store data without the need for trusted intermediaries like Google – the tools of decentralized finance (DFI). Think about – except bank and Visa – powered cryptocurrency payments – and can independently build apps and communities.
Cryptocurrency and DeFi financial markets are both core to Web3 – in fact the term was coined in 2016 by Gavin Wood, the co-founder of Ethereum and the Polkadot blockchain project leader.
See: The Launch of Polkadot, the Most Ambitious of the ‘Ethereum Killers’ Could Begin DeFi’s Reinvestment
Suddenly, it’s an idea with a lot of interest behind it. The term “web3” generally maintained a single-digit or low double-digit score on Google Trends’ interest in ratings over time, reaching 20 until September. It started at 40 in November, and topped 100 in the first week of December and returned to its current 70.
Instead of storing data in centralized corporate silos — ranging from photos to Google Cloud Storage or Apple’s iCloud — it will be stored on a decentralized storage platform. Websites will not be hosted on platforms such as Amazon Web Services (AWS) that can boot them.
While Dorsey also commented in the thread that he had nothing to do with Web3. Saying A Wall Street Journal article that called him one of the “revolutionaries likely to reboot the Internet” was just clickbait.
But he put his money behind it with BlueSky, a Twitter-funded open-source project he created in late 2019 to create a decentralized protocol capable of hosting any social media platform, saying Twitter would eventually Could be one of them.
The goal, he said, was a very Web3-like desire to create a more civil public conversation by using “open recommendation algorithms that foster healthy conversations” rather than relying on private social media companies that censor debates. could have – which ended it doing during the 2020 presidential campaign.
This points to another major problem with Web3 that many of its freedom-to-censorship retainers wax poetic about: there is no control.
Which also points to one of the potential legal problems of Web3 shared by current cryptocurrency and DeFi projects – how do you implement regulatory controls such as anti-money laundering checks on a decentralized platform? (An answer: US officials have said that DeFi isn’t really that decentralized enough that there’s no one to violate. In other words, there may be regulation but good luck trying to enforce it.)
Then there’s Web3 and the main mechanic of any blockchain project: they rely on user-hosted “nodes” that contain copies of the entire blockchain, which are constantly updated. While it’s doable, the set-up is somewhat complicated and effectively requires a separate computer – which has a lot of memory.
As a result, a lot of nodes are hosted by third-party companies like Bison Trails, which rent out server space and node management to people who want to run nodes – often to earn money through DeFi staking.
Companies like Bison Trails – which was just bought by Coinbase and switched to Coinbase Cloud – are centralized points that Web3 will inevitably make heavy use of. This begs the question – will Web 3 eventually be controlled by Big Crypto?
related: With $30B Stakes, Coinbase Cloud Wants To Be The AWS Of Blockchain
And then there’s the self-sovereign identity argument about controlling your own personal data: Companies will still be able to persuade users to give it up, either for rewards or access to a service or product they want. . People who really want to control what they give up will have to work at it – something that many people claim to be willing to do.
But are they? And will enough of them make it to Web3 to scale?