How the utopian vision of Web 3.0 clashes with reality

The internet as we know it is broken. Google and Facebook have created data silos in which we have lost control over our information. You’ve heard that story a dozen times. But according to the people working on Web 3.0 they are able to fix all of that.

Web 3.0 was proposed as the next evolutionary stage the internet might enter. In the early 90ies the first internet browser marks the beginning of the world wide web. Back then people were only able to access static websites without any interactive content — pretty boring from today’s perspective. However, people would often self host the data they are sharing and thus have more control about what they share with whom. The downside was that this made publishing content on the internet only accessible to those who possessed the right skills.

Some people believe in progressive evolution. Web1.0, Web2.0, Web3.0, Web4.0 anyone?

With more fiber the internet became faster and users were able to share music, videos and pictures. This is also the advent of new platforms such as Flickr, Facebook and YouTube which somewhat democratized content publishing. This is the beginning of Web 2.0 where today’s problems start to crystallize: information ends up in walled gardens or is monetized without the users having much control over it.

Web 3.0 aims to combine the ease of web 2.0 with the control and privacy users enjoyed in the early days of the internet. Data belongs to those creating it but users don’t need to build their own websites praying that one day someone will stumble upon them. This is done through interoperability of services. Meaning you can for example send a WhatsApp message to a friend on Telegram. Or host your facebook data on a server not owned and controlled by facebook. The idea is by no means new, protocols like XMPP did exactly that in the 90ies. And in a similar fashion, that is how we’ve always been exchanging emails.

Social decentralized networks

In a centralized social network like Facebook Mark Zuckerberg is right in the middle. He’s able to check your data and sell it to advertisers. In a decentralized or distributed network Mark is still around, but not in control of all the data flowing through the network. This is done by a decentralization on the protocol layer: meaning that the data you share in one place is interoperable with another service. The Web 3.0 movement doesn’t stop at messaging, but also wants digital identities and payments to become decentralized, too. And this can be done using blockchain.

So what is blockchain? This quote sums it up nicely:

When you hear blockchain you probably think of Bitcoin and speculation. Which is fair enough since that’s what made blockchain headlines with. Basically blockchain is nothing more than a decentralized database. Think of the decentralized network above, in every node of that network the same data is being stored. And it is continuously kept in sync. (Here’s how this works in detail). Decentralizing data adds an extra layer of security and transparency. It also makes the stored data immutable, meaning it cannot be altered or deleted. That’s great for financial spreadsheets. But not so much for party pictures and private documents.

Who’s working on this? The Web 3.0 ecosystem

If we take a look at the web 3.0 ecosystem and the different people building it we get a funky mix between blockchain evangelists and activists. There are old school crypto anarchists, as well as investors, bankers, libertarians, founders, artists, NGOs and activists.

In particular, it’s interesting to look at investors which pump money into the creation of a “better” internet. Take for example A16Z a big silicon valley VC firm which has previously invested into Facebook, Instagram and Airbnb. But they equally invested into several web 3.0 startups which promise an internet which is the exact opposite of what those previous investments stand for. For example Keybase, a privacy friendly messaging service which received 10 million USD in a series A in 2015.

And my favorite example: Edward Snowden. The NSA whistleblower who is stuck in Russia and now a skype-enabled keynote speaker gave a talk last year at the Blockstack conference in Berlin. Blockstack raised over 50 million dollars in their initial coin offering in 2017 and had some quite prominent investors on board. Among them were Union Square Ventures, Winklevoss Capital and Y Combinator. Blockstack’s vision of a free and open internet sponsored by valley investors slightly clashes in my opinion with Edward Snowden’s values.

This odd combination of activists and investors shows an interesting trend: The makers of Web 3.0 are sort of re-enacting the dream activists had already a long time ago. The difference is that the blockchain followers come from a completely different place. They are rather libertarians funded by venture capital who don’t mind enriching themselves in the process. Whereas activists traditionally built their anti-surveillance tools with little (governmental) funding.

There is also a good deal of mystification going on when it comes to the solutions proposed by the Web 3.0 and blockchain community. Many startups in the space, especially those with blockchain in their name, sold quasi-vouchers in order to raise funds. Like this they could bypass securities regulation and raise millions in seconds. Think of an airline selling frequent flyer miles to finance the extension of its fleet. It’s a bit ridiculous to invest more than a couple of thousand euros, because no individual in the world will ever fly that much. But by making those vouchers aka tokens and coins tradable on online exchanges the gambling began. Prices got inflated since everyone believed they had invested in the next big thing, killing the initial purpose of many projects.

Now, one to two years later, a lot of those companies haven’t delivered the products they promised. Or even worse: they have, but nobody is using them. Web3.0 is the utopia of the perfect internet and that’s why it probably also appeals to so many different groups including myself. And the same goes for artists.

For example there’s the phenomenon of so called crypto raves. A year ago WIRED UK ran a story by the two curators Hans Ulrich Obrist and Ben Vickers about a new Berlin phenomenon. Raves on the blockchain. Whatever that might be. Basically, Vickers and Obrist were trolling the art and crypto scene. Just like many of the products proposed by startups those crypto raves never existed.

Now a year later crypto raves are actually taking place, not funded by a VC, but by the European Union. The collective RaveEnabler organizes crypto raves all over Europe. In order to attend, you need to let your computer run for 12 hours to mine a cryptocurrency called Monero which then grants you access to the rave. It’s somewhat sad, since it breaks the utopian mythos — like a Jesus figure out of plastic. Ou-topos means nowhere in Greek. And funnily enough the first real crypto rave took place in Athens. However, at the end of the day it’s just a normal party. Whether it’s blockchain enabled or not. And that’s the case with the entire space.

We all are gonna be Billionaires

Eventually a lot of those projects pretty quickly abandoned their plans to make the world a better place. Someone once said to me at a blockchain event that “We all are gonna be Billionaires.” And maybe that’s the evolution of Andy Warhol’s “in the future everybody is famous” to “in the future everybody is going to be a billionaire.” The problem is that decentralization doesn’t mean “decentralize wealth” or “decentralize power”, but simply to decentralize infrastructure. Not more, not less.

Instead of building ever more solutions to fix the problem, Anand Giridharadas proposes that we should first ask what happened that we got to this point:

We most likely won’t fix the internet by creating a new, decentralized Facebook which is backed by the same Silicon Valley VC which already backed the original Facebook.

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