I regularly attend CES (the consumer electronics show) in Las Vegas, which is the largest trade show in the world and largest event in Las Vegas.
This is the event where most of the biggest tech projects are announced with huge press conferences, show floors, and events hosted and sponsored by brands like Sony, Alphabet, and even the US government.
You’ll find all manner of advanced technology at CES, like robots, VR/AR/MR/XR, drones, self driving vehicles, AI, 3D printers, quantum computers, and so much more. And I get a chance to talk to all these business leaders to discover the latest trends and innovations.
At CES, I tried tech like the Oculus Rift and HTC Vive, 8K TVs, exoskeletons, smart wearables and more years before they came out. A lot of the prototypes here never make it to production, and you learn quickly that technology in and of itself is not enough to succeed in business.
The marketing and advertising become an arms race at these events. Tech giants with unlimited budgets will go all out trying to one up each other. Sony will buy out the entire Mirage and Samsung will cover the entire side of the Venetian with an ad while Google covers every tram.
Everybody holds events across two cities (Las Vegas and Paradise) to showcase their technologies. And blockchain technology (that thing that powers the NFTs and Web3 and all that) has had a very poor showing over the last decade of its existence.
The first time it really showed up was in Jan 2019. There were rumblings in Jan 2018 but the companies didn’t have funding or projects to hit the show floor until 2019. I don’t recall seeing anything crypto related prior.
The 3 companies with the largest and most respectable presence at CES 2019 were Ledger (launching the Nano X), Archos (launched a competing wallet), and Pundi X, which showed off prototypes of its business scanner and consumer phone, both running its proprietary, blockchain-based mobile OS on modified Android.
The rest of the blockchain bros rented out Mike Tyson’s mansion and filled it with lambos for the tackiest possible party you could imagine. I’ve been to Vegas for a lot of trade shows in a lot of different industries, and the crypto presence was by far the most embarrassing.
Blockchain never made a splash, and its user numbers are abysmal compared to where innovative companies like Apple, Microsoft, Amazon, and Facebook were at the same age. Ethereum was created in 2015; it’s a seven-year-old technology based off a 13-year-old technology in Bitcoin. In a few years, they’ll be old enough to drive, vote, and drink. Think about this; Facebook is only a year older than MySpace and by year five outgrew it to become the largest social media network ever since. Ethereum is a year older than MySpace was when it died and MySpace still has more users today, so there’s no reason to call it a “new” technology. It’s already well past its lifecycle.
By the time the pandemic hit in 2020, I was moving away from blockchain because the promises made back then never came to fruition. And a year later, suddenly everything was rebranded and trying again.
It makes me smile hearing people discover NFTs, Web3, and the metaverse for the first time. I laugh a little to myself whenever I read about how this technology is still so young and just needs to be adopted by the mainstream.
The thing is – the marketing buzz around web3 is preposterous. It aims to resolve both censorship and content moderation. It claims to be the first immutable technology and revolutionize the entire internet by decentralizing it.
That’s a lot of hefty goals, and I’ve so far seen blockchain fail to fulfill its promises in gaming, streaming, social media, messaging, supply chain, and so much else. I can’t think of a single use case of blockchain that can’t already be addressed with other technologies. Half the problem it claims to resolve have already been resolved, and the other half are either imaginary or impossible.
Web3 is not what you think it is – it doesn’t stop piracy. It doesn’t pay residuals to artists. It doesn’t save energy. It isn’t cheaper. It’s not decentralized. It isn’t secure. It is not private. Governments have proven they can very easily regulate and control it. It’s not a hedge against financial nor stock market volatility. It doesn’t give you more ownership nor control over the network nor your own data. It still relies on the same servers and data centers as everything else.
The term “web3” is just another reskin of the same blockchain technology that’s been failing to catch on for a cornucopia of reasons over the last decade. It’s not going away (look at torrents, Usenet, DOS, COBOLT, and other ancient technologies still in use today). But it’s also never going to become the de facto internet technology.
I mean…that’s always true right now. The internet makes everyone more accessible and allows people to work from home on distributed virtual teams or by themselves. Nothing web3 does is going to enable a situation that already exists. It already exists.
As for the promise of web3 decentralizing control from big tech and giving every individual control over their own content, that won’t happen either. If anything, blockchain technology and the digital ledger makes you less secure and gives you less control than you had before.
Here are web3 problems that will never be resolved.
data control is a lie
Have you ever tried deleting a blog from Steemit, Hive, or Mirror. It’s impossible, even though none of it actually resides on the blockchain. And having personally dealt with the situation with Steemit, I can promise you their customer service is absolute garbage. As a writer, I’ve never dealt with a company like Steemit that simply edited a writer’s profile without their permission. Even if I received a DMCA as a writer, it would be on me, not the Steemit platform. Section 230 protections put the burden on the person who wrote it, not the platform.
Yet still Steemit deleted my blog post, except not really. They removed it from their web interface, while leaving it in the blockchain. This gave me less control and created a huge mess fully attributed to steem and nobody else. This never would’ve happened with WordPress or Blogger. Score: Web3 0, Web2 1.
you have zero privacy in web3
Have you seen how much data is collected by Ethereum or even a minor scam blockchain like Deso? This Decentralized social platform has you create a profile in one platform and repackages it into over a dozen platforms to make them all look populated when they’re empty.
And it’s scary how much people can track. I can see more on Deso Public profiles than you see on your own personal dashboard on Facebook or Twitter. People can forever see every move you make, even unfollows. Imagine the security concerns, especially for woman, who are constantly harassed online. Score web3 0, web2 2
Fact is the same VCs own both webs
a16z and other venture capital firms are major investors of web3. They’re the same people who made web2 what it is, and if everything is democratized, their ownership is more than yours, so is their voice.
Also, web3 dapps and platforms like Ethereum, Metamask, Coinbase, Uniswap, and OpenSea all still rely on the same AWS cloud infrastructure as everyone else.
Score web3 0, web2 3
This means web3 is more of the same but worse. Big tech owns everything, and you are treated much worse as a creator and user. If it’s democratizing things, I would rather not…
What does web3 do?
It’s mostly used to scam people for a quick buck.
According to the marketing materials, Web 3.0 (and I’m happy to debate the difference between web3 and Web 3.0 because they’re both imaginary marketing buzz terms) boils down to a few core concepts: open, trustless, and permissionless networks.
- Open, web 3.0 is built on the blockchain, most often from open-source software by a community that operates transparently.
My verdict – this is patently false.
Apple is a computer company founded by Steve Jobs, Steve Wozniak, and Ronald Wayne. It regularly reports its financials to government regulators, and I can find out anything I want about the company and founders in public records.
$shitcoin is a crypto project from the Kryptobabies Krew, founded by gerrymander2682, 0xfizzle, and noname17. I can’t find a single thing about the “company,” which looks like it was never registered. Oh wait, there is no company anymore because 0xfizzle announced in a private discord server that they’re shifting to a DAO to try and avoid legal liability. A whale in the community doxxed a founder and they have a previous criminal history. Between them, the founders own 80% of the total coin supply.
Do you see the difference?
- Trustless, because there is no need for third parties to interfere. Eliminating slow transactions and higher rates because of the third-party cuts. The blockchain enables participants to interact publicly or privately through smart contracts.
Lmfao at “eliminating slow transactions” Ethereum processes 15 transactions per second at best. Solana claims it can process over 50,000 TPS by cheating to create a marketing buzz number. They’ll both compare themselves to Visa’s 25,000 TPS.
But they’re really competing with Amazon Web Services (AWS), which processes up to 1,000,000 TPS. Also, both Ethereum and Solana (along with OpenSea, Metamask, Coinbase, and everything else crypto) relies heavily on AWS. If AWS goes down, so do all the blockchains. Except they’re not really competing with AWS because they have an inferior product nobody wants.
This entire statement is patently false on every end.
- Permissionless as there is no need for authorization from governing bodies.
Another misleading statement.
It’s not a good thing to not have governing bodies. The entire world is shifting to a “zero trust” architecture, which means you’ll trust nobody. Every person, device, and piece of data is properly indexed and protected in a zero trust system. That system is then continuously monitored to ensure no unauthorized use. This is the exact opposite of the magic beans being sold by blockchain.
Also, no technology “needs” a governing body, but governing bodies still choose to govern them. The United States and China have more than proved that blockchain can be regulated. So this is just a stupid statement because a) permissionless is actually a bad thing for your safety and b) blockchain is only permissionless if it existed in a vacuum.
And again going back to the prior issue of not needing a third party, OpenSea, Etherscan, and Coinbase CONSTANTLY insert themselves as a third party to track theft, moderate piracy, etc. The idea that blockchain technology will suddenly stop all this is honestly laughable. Nobody who actually understands technology believes in this complete and utter nonsense.
Check out Molly White’s amazing blog about all the many scams, frauds, rug pulls, and other illegal and immoral things happening in this fraudulent and failed web3 fallacy.https://web3isgoinggreat.com/
Is web3 safer than web2?
The exact opposite actually – web3 is more dangerous on every level than the non-blockchain internet for a variety of reasons. Let’s walk through some of them.
Privacy danger – people are understandably upset at the way companies and governments use our data. We have to be mindful of what we post online, because anyone in the general public can see a public tweet or Facebook post. But at least those platforms give us the ability to control our privacy settings for the general public. You have zero control over privacy on the blockchain because the public digital ledger tracks your every tokenized transaction in full public view.
In the case of specifically web3 social networks like Deso (short for decentralized social), this means I can see anytime you follow or unfollow somebody. And your posts are a lot harder (and in some cases impossible) to delete. So, if you think cancel culture is bad now with people like Brantly Milligan being fired from his ENS DAO over a decade old tweet,[1]imagine how bad it’ll be when such posts can never be removed.
And imagine the consequences of being stalked on the blockchain, especially if you were naive enough to register your name as .eth. Between Etherscan and OpenSea, I can learn a lot about you and your financial dealings. Do you walk around with your bank account information tattooed on your forehead?
That’s what web3 wants you to do. If your goal is to have big companies not have all your data, I don’t see how the solution could possibly be to make that information available to the public. That won’t stop a company like Facebook or Google from exploring your data – it just makes it accessible to everybody else too. That would be like preventing mosquitos by surrounding yourself with spiders and snakes and wasps and scorpions and hornets and bears. It just introduces more different types of stings and bites, not less.
Investing danger – buying Bitcoin, Ethereum, Polygon, or Solana is far more dangerous than buying Alphabet or Amazon stock. The price of cryptocurrency is notoriously volatile, and even stablecoins are risky and rely on liquidity pools. Very few crypto projects are generating any notable revenues nor scaling to large userbases.
Some numbers to keep in perspective:
There are less than a million DAU on Ethereum Ethereum active addresses 2022 | Statista with about 71 million wallets Number of Non-Zero Ethereum Addresses Hits Record High Above 71M: Glassnode – Decrypt personally, I’m at least 10 of those wallets and maybe 1/2 a DAU at best.
This compares to 2 billion people using mobile payment apps like Apple Pay and Google Pay Mobile Payments App Revenue and Usage Statistics (2022) and Google Chrome has 2.65 billion users Google Chrome Statistics 2022: How Many People Use Google Chrome? – EarthWeb
Meanwhile, over 2 million people still get DVDs from Netflix Netflix Made 9 Big Changes, and Most Subscribers Now Have No Idea and 4.5 million people visit MySpace every month https://www.similarweb.com/website/myspace.com/#overview
This means Ethereum is closer to the size of MySpace and Netflix DVDs than Alphabet or Meta. Alphabet generated over $75 billion in revenue[2] in 2021, compared to around $20 billion in revenue generated by Ethereum miners. Of course, transaction fees generated are well under $10 billion per year.[3]
If you only have $1000 to invest, I’m willing to bet Alphabet is a better 20-year hold than Ethereum.
Access danger – have you ever lost a password to anything? – you can reset it.
Ever lost your house keys? – a locksmith can help you.
Have you lost your crypto keys? – it sucks to be you.
It’s super easy to reset and regain access to everything in life except blockchain. If you lose your seed or it’s compromised, it’s forever. You will never get it back, and nobody can help you. I’ll happily exchange my privacy to a company in exchange for the ability to reset my password, which was always encrypted from the company anyway using military-grade encryption with no blockchain ever required. Cryptocurrency didn’t invent cryptography nor encryption; it’s ridiculous to think otherwise.
Content danger – my favorite promise from the web3 community is the promise to simultaneously end cancel culture while making content moderation easier. Dear everybody in web3 – those are adversarial goals, because the only way to moderate content is to cancel people.
If you think torrents are bad, the crimes web3 sees are way worse than anything I ever saw on The Pirate Bay. Piracy, hate speech, and even Child porn are already widespread on the most popular blockchains.
Child abuse images hidden in crypto-currency blockchain
Images of child abuse are found embedded in the system powering a high-profile crypto-currency.
Nintendo gets unofficial Super Mario NFT game removed from YouTube
Nintendo has taken action against an NFT driven gambling game that used ‘Mario Bros’ assets
And let’s circle back to Brantly being cancelled from a DAO on Twitter by this very same web3 crowd because of his religious beliefs.
Ethereum Name Service Removes Core Team Member Brantly Millegan Over 2016 Tweet
A tweet from Nick Johnson, founder and lead developer of ENS, confirmed Millegan has been removed from both the DAO and as director of operations of True Names Ltd.
How can you tout the immutability of web3 while actively muting people?
When I was an activist, I met a lot of anarchists who didn’t want to live under the control of a government nor even get a job with a corporation. They wanted the streets to be ruled by anarchy, and we did use to live like that as humans. Eventually we evolved into societies and communities because there’s safety in numbers. Many of these anarchists made me laugh because if we truly did live in anarchy, they would’ve long been killed for having an attitude while being scrawny. The people who seem to hate the government and police the most are the ones benefiting the most from them.
It’s not ideal that an elite few have control over the internet, and there are definitely changes that can be made. But to think web3 is going to resolve them is hilariously off base.
The reality is the decentralized web existed for as long as the web. It was always decentralized, and some people figured out how to take control over as much as possible. Good for them, and for those who don’t like it, tor, torrents, IPFS, and P2P options have always existed. There’s nothing new nor revolutionary about what blockchain offers.
Web3 will never replace Web 2.0, not just because one is a marketing buzz term and the other is also a marketing buzz term but for a different market. Mostly, the issues above will always provide enough friction to keep it bubbling under the surface while never becoming as prolific as Facebook or Google.
Footnotes
[1] The man who got fired by his DAO
[2] https://abc.xyz/investor/static/pdf/2021Q4_alphabet_earnings_release.pdf?cache=d72fc76
[3] Ethereum Network Revenue Set to Smash Monthly Record of $722 Million – Decrypt