Crypto, Blockchain, NFTs, DAOs, Web3, Metaverse… they're going to change how humanity functions and rewrite our history books. Right?
At least, that's what everyone is saying on Twitter.
But after only having dipped my toes in the waters of web3, I have found this to be untrue — at least for now.
I have to say, with little research you can see how this might be the new "tulip mania."
Before we begin, let me caution you by prefacing this article with a quote that summarises my view, and the “hype” around this space.
“ Pessimists sound smart, Optimists make money and Realists stay happy. “
Not ready for mass adoption
Despite what YouTubers and Finance gurus want you to believe, none of the technologies mentioned in this article are ready for mass adoption.
The problem lies within the core concept of blockchains like Bitcoin— “decentralisation”.
Spreading an app across 100s of devices (decentralisation) is a technological marvel that sounds fantastic on paper but will send tremors across the blockchain wonderland if you've ever spoken to a Blockchain Developer.
You have to take into account the costs of bandwidth that you will pay to send a copy of the “public ledger” to every device running it.
Here's a Fact — the Ethereum Public Ledger is about 950GB in size!
For any individual who wishes to participate in the blockchain and wants to run a “full node”, they would have to spend at least $2500 on hardware (and a little more on getting a good internet connection).
But let's not forget that the “promised future” of web3 and blockchains like Ethereum considers using your mobile as part of the database and your hosting server.
The ecological impact of this alone would make it a terrible idea as it would require 99% more energy per transaction than standard servers hosted by AWS (since these servers run on the edge network and are highly optimised).
Also, having to pay transaction fees to miners is pretty much the same thing as having to pay services like AWS or GCP for cloud hosting but you get a significantly worse platform to use.
This brings me to another significant hurdle — web3 mostly operates on centralised servers.
The level of decentralisation that was promised by Web3 fanatics just does not exist — mostly due to technological constraints which should be solved in a few years.
You could argue that certain level of centralisation is required to provide a good service to customers because most consumers are used to a smooth experience with products; a helpline to call, a reliable server that does not go down when you need it, easy learning curve, etc.
“It's Early Days for Crypto”
This is the most common excuse I see from people in the web3 space when discussing problems like these.
Blockchain's failure to scale beyond relatively nascent engineering is what makes it possible to consider the days “early”.
But, objectively speaking, it has already been around for a decade or more now.
This very well might be the beginning, but should we consider that any consolation?
Because it seems like from the “very early days” these technologies are immediately tending towards centralisation through platforms in order to be mass adopted.
Maybe we should be taking notice from the “very beginning” because most participants don't even know or care it's happening.
But How Can You Stop a Gold Rush?
That same friend who is trying to convince people that web3 is inevitable, does not even realise that the NFTs he bought are just simply metadata that contains a link to the art.
Most NFTs sold on OpenSea (the largest NFT marketplace) don't store the images which makes it possible for somebody to just sell the same NFT on a different marketplace under a different name since there is no way to verify or cross-reference and penalise people doing this.
Infact, hackers could even go to the link in the NFT and permanently change the Image that the link was supposed to be pointing to!
Imagine spending $100k on an NFT only to find out that somebody changed the image on the link to an emoji — 💩.
There are people purchasing several NFTs who do not even know this fact, yet try to pass off how knowledgeable they are on this new technology.
I suspect that many people do not even understand what they are buying but are just following “experts” who themselves have financial interest in seeing this space grow.
The major hurdle with NFTs right now is that they are too centralised around platforms like OpenSea and that they rarely, if ever, focus on securing the underlying NFT/Image.
Regardless of these short comings, there is money to be made, but I do not believe it is by retail investors.
Retail investors are getting taken for a ride by people who are selling you the next big thing and running with the money.
At the end of the day, most web3 nerds are excited about this kind of progression because it means more speculation/investment different fields like art.
Personally, I don't think web3 is on a trajectory to free us from centralised platforms.
I don't think it will fundamentally change our relationship to technology, but I also understand why nerds like me are excited to build for it.
If we do want to change our relationship to technology, I think we'd have to do it intentionally.
I'm hopeful that the creativity and exploration we're seeing will have positive outcomes, but I'm not sure if it's enough to prevent the same dynamics of the internet from unfolding again.
Until we see significant progress being made in this space to tackle all the underlying problems, “web3” will always remain a marketing buzzword for me.
Thanks for reading!
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