Web3: A Digital Revolution or Business as Usual?
Very few Twitter spats garner much attention within the crypto community because of the vastness of it as a whole, but recent exchanges among Elon Musk, Jack Dorsey, and Marc Andreessen have pushed the discussion on the future of Web3 further into the spotlight. Regardless of your opinion on Web3, the design faults it’s setting out to correct are significant.
Web3 holds the promise to step away from Web2 and dissolve the centralized control of the internet by vesting it into the hands of the masses. This line of thinking is fairly seductive–leave behind centralized control and enter the side of the internet where you own what you create, maintain privacy, and have greater freedom–but how much of this framework is likely to hold?
The criticisms people like Dorsey make against Web3 have less to do with the concept and more to do with the industry fuel that powers and threatens it. In his tweet, Dorsey asserts that the new frontier of the internet will remain in control of venture capitalists and their limited partners.
He went on to criticize active investors of Web3 projects, like Marc Andreessen, who are supporters of Web3 but retain a majority of control over the companies through token ownership. This comment may seem hypocritical coming from the co-founder of Twitter but the point he makes is correct, especially in observation of this chart from Messari.
The relevance of looking into token holdings is they power the blockchains that Web3 will be built upon. We see here that the highest concentration of token allocation for a number of public blockchains remains overwhelmingly with “insiders” or “public sale.” Insiders consist of teams, employees, and venture capitalists, and while public sale seems to be that of the diversified masses, it also allows an opportunity for whales to buy up vast quantities of tokens for control. If the majority ownership and voting rights rest with a small contingency, regardless of who, the system will never truly be decentralized. The formula is therefore no different from that of the existing financial system or Web2 structure, and to Dorsey’s point, “[Web3] will never escape” the agenda of these digital landlords.
Thankfully the prognosis for Web3 is not nearly as bleak as Dorsey suggests. There are a number of significant obstacles to clear before Web3 can become a semblance of the system it aims to become, but through error comes evolution and development. Web1 and Web2 did not begin as they are now, and neither will Web3. Those who criticize Dorsey’s opinion should realize that his voice serves as an important caveat on how not to repeat the same mistakes and be seduced by false promises.