Musk is right, Web3 is bullshit!

Heartbreak: The person you're against may have a great point

To put it bluntly, I'm not a big fan of Elon. He's an ignorant, narcissistic, reckless, self-indulgent clown who treats his employees like garbage, and he happens to have a great set of marketing, which helps him become a billionaire, even though the company he runs isn't profitable.

Still, Musk recently tweeted something I couldn't agree with: "Web3 sounds like bs."

Web3 is an idea that even Bloomberg admits is a bit vague, suggesting that we can use blockchain to implement a decentralized World Wide Web. Proponents of the concept like to talk about how Web 2.0 is centralized and controlled by big companies, and how blockchain, crypto, and NFTs can help "give power back to the people."

It all sounds wonderful and looks good in theory, but in reality, it's all nonsense.

Online media

Web3 is all nonsense on several different levels, but most importantly, it confuses political and power relations issues with technical issues. According to Web3 clusterers, blockchain is the technology that can eventually bring the network back to its decentralized roots. The truth is that not only is blockchain useless in achieving this, but we already have the technology to do it.

ActivityPub is a protocol that has been around for years and has inspired the creation of fairly successful decentralized federated social networks such as Mastodon. Any community can create its own instance of ActivityPub and be controlled by them—even a single user can create their own server instance as needed and federate with other instances. It's a nifty architecture that allows people to control who can access their sources and what kind of sources they are exposed to.

So why haven't we seen a massive influx of people from Twitter and Facebook to Mastodon or similar platforms? The technology is there, the platform is there, all that's needed is registration and conversion.

The reason for this is that platforms like Twitter have gained enormous power and influence and have huge user bases that simply stay where most of the people they focus on are. There are a lot of stories about people switching to Mastodon, but soon after coming back to Twitter because that's "the platform where all the activity is located." Companies like Twitter spend millions of dollars on "customer retention," they help big brands improve their online presence, and give users plenty of reasons to stay and stick with Twitter.

The monopoly of the largest social media platforms also benefits other companies that can streamline their advertising and marketing campaigns, which favors the broader capitalist system, where the monopoly of larger companies is a natural consequence of the system in which we operate.

Web3 thinking is based on the naïve assumption that technology and "smart ideas" can solve most of our social problems. Its naïveté also extends to the belief that free-market capitalism is the solution to monopoly incursions, rather than a system that is in fact actively creating and expanding monopolies.

There is no one technology that can solve this problem, and this does not happen because of the lack of a certain technology. We already have tools to create a decentralized network, and blockchain isn't even the right technology.

The of blockchain, NFTs, and cryptocurrencies

Blockchain is a form of digital ledger that consists of records called blocks. Such databases are self-managed using a peer-to-peer network, which means that no primary, centralized machine controls the entire infrastructure. Instead, everything is controlled by all nodes connected to the network.

The main purpose of blockchain, and the only reason it is useful, is to record transactions. Admittedly, this is a fairly clever way to avoid the double-spending problem, when digital tokens are spent twice (or more) i.e. transferred to multiple destinations at once. That's why, so far, the only major uses of blockchain have been digital currencies, as well as artificially scarce digital assets (NFTs).

Some have suggested that NFTs can be used to record things like deeds and property ownership, but even if we consider using Oracle, it doesn't make much sense to use blockchain to record any physical object or anything that requires off-chain verification, authorization, certification, or confirmation. Blockchain only makes sense in a digital-only world, and only applies to transactional data. So far, no one has come up with the idea of a convincing dapp (decentralized application) and is not associated with cryptocurrencies in any way.

That's why when some Web3 evangelists talk about how social media is centralized and how blockchain can help, you know they're all talking nonsense.

Social media posts are not transactional data. You may have "likes" that you can give to posts, but the double spending issue doesn't matter here because you have unlimited likes. We already have decades of old techniques, such as PGP, that can prove the authenticity of posts. We already have distributed, peer-to-peer technology that allows for censorship-proof, decentralized data storage (such as WebTorrent used by PeerTube).

Unstoppable Domains looks good in theory, but it's a for-profit solution that's not really decentralized as it seems: you still have to buy a domain name through UD. Also, bypassing DNS blocking is very simple, and unstoppable domain names won't solve your IPS hard IP blocking problem if you're a DNS vendor.

Projects like the Interstellar File System (IPFS) are interesting and are already being used to combat censorship. However, the pricing model is slightly ambiguous, and the cost of "fixed" (permanent storage) is several times higher than that of conventional storage solutions. If you use a company like Pinata to host ("PIN") your content and guarantee its durability while paying a monthly fee, you should start asking yourself how much decentralized content you really have left if you still rely on the caching policies of your hosting provider and standalone nodes. In addition, we already have platforms like Magnetic Link, Tor Onion, and FreeNet, which are now almost 22 years old (the network itself is only 9 years old).

Technology has been here, and we've had similar technology for decades. What we need against the major platforms is not new technology. It's nonsense that new technologies can solve this problem.

The radicalism of venture capitalists

Venture capitalists are shining brightly, and they can suddenly pretend to be radicals with the intention of "subverting centralized intermediaries" and creating an "internet owned by its builders, users, and creators." They can pretend to be the voices of a rebellious generation and try to challenge the "big guys." However, I pointed out that the only reason venture capital firms invest in Web3 projects is to make a profit, which is not really making breaking news.

Many Web3 projects are simply labeled "decentralized," and many of them use permissioned (or hybrid) blockchains where only companies can add or remove tokens, but then ownership of tokens can be traded independently. As some other authors have pointed out, under capitalism centralization is inevitable. And without a fair and equitable distribution of power, you can't have true decentralization. Cryptocurrencies and Web3 simply cannot achieve this. What you get is a "marketization" of power, and we can understand the outcome of Bitcoin by looking at its distribution of wealth (completely unexpected).

As mentioned above, the technology supported by the Web3 crowd is not a new technology. The main difference here is that all of these projects revolve around DeFi and cryptocurrencies. That's the real reason why venture capital firms are so interested in Web3: they want to extend the duration of the cryptocurrency bubble. They want to make the projects they have already invested in more meaningful and increase the value of any speculative assets associated with them. They want more people to buy cryptocurrencies and more money to enter the market to drive up prices. They don't care about "decentralization" or "freedom" or "censorship." They just want to make a lot of money before the bubble finally bursts.

Steemit, a blockchain-based blog and social media site, had to lay off 70% of its employees when their cryptocurrency prices fell during the market crash in 2018. The business plans of these platforms are simply built around proprietary cryptocurrencies and tokens and their circulation.

This way of thinking is driven by the ubiquitous technocratic view, which, in the shadow of Fukuyama's "end of history," holds that the world is not a conflict of different concentrations of power, but simply a place that needs to be replaced with "better ideas." Shiny new technologies designed by smart people will bring about substantial change.

But, as I've said before, the problem is not technology, but politics. If we really want to counter the power wielded by the big social media companies, we need to move in the opposite direction that Web3 advocates are trying to take: look at the profit motivations within the industry and look at proper regulation. I would even say that the only way to solve the problem of large social media companies is to take business and profit out of the whole equation.

We should look at how certain aspects of decentralization in the context of cryptocurrencies offer different avenues of abuse to capital owners and allow them to launder money, wash, and manipulate markets in general. Finally, if we look at onion services, we know that they are mainly used by the black market.

An aggressive position is to further democratize our monetary system and consider getting rid of money altogether in the distant future. Bitcoin is not radical, Bitcoin is a step backwards, going toward marketization rather than democratization, giving more power to capital owners. I always find it hilarious when people laugh at cryptocurrencies that are fighting against any power, and big banks have invested hundreds of millions of dollars and profited from cryptocurrencies. Cryptocurrencies may make them uncomfortable at best, but they are not threatened.

Similarly, Web3, backed by venture capitalists, will not face any big powers. I think it's a fad that's going to fade away, but even if it gets a foothold, it's only going to shift power from big tech companies to venture capital firms, not to the people. Don't be fooled by their marketing campaigns. This is all nonsense.

This article is written by Maciej Baron, translator: Detective Translator