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Web3 Critique

3 min read

Blockchains only really make sense for a very narrow subset of applications where

  1. Peer-to-peer operation: software that can be run by anyone, and messages are passed directly between them
  2. Strict global consensus: all peers must agree on exactly the same results

Till date, there are only two applications where both criteria are necessary: money & identity (and technically not strictly necessary either)

More in Polynya on Blockchain Apps

Moxie

Really good piece by Moxie on web3

  • Web3 lacks infrastructure
    • By definition, infrastructure does not need to be rebuilt every time they are used. To ask people to throw away their infrastructure is rather stupid.
    • Servers are infrastructure! Nodes are infrastructure! People won’t want to run these themselves. Until we reach a point where enough web3 platforms are able to provide this same level of infrastructure, we’re going to still end up with centralization.
    • “If there’s one thing I hope we’ve learned about the world, it’s that people do not want to run their own servers. The companies that emerged offering to do that for you instead were successful, and the companies that iterated on new functionality based on what is possible with those networks were even more successful.”
  • Decentralization is not always good. The more I get involved with the space, the more I am certain that the main value add of blockchain and web3 is not decentralization but rather interoperability and transparency.
    • Decentralization also ends up making progress very difficult. See: Vanilla Ice Cream effect
    • “This isn’t a funding issue. If something is truly decentralized, it becomes very difficult to change, and often remains stuck in time.”
  • Blind trust. Crypto folks don’t necessarily trust the people but some just blindly trust the medium. If people don’t understand how the medium works to facilitate transactions, how can they trust it? Transparency also involves transparency into its inner workings.
    • Similarly, “Almost all dApps use either Infura or Alchemy in order to interact with the blockchain.”
    • We just rely on these two pieces of critical (centralized!) pieces of infrastructure to produce the correct results and not be bad actors.
  • Degraded Blockchain problem

Obessions with profit

Web3 supposed allows us to ‘codify’ the set of values that a public goods represents. Yet, in practice in web3, “little space has been made for different values to be discussed or enacted. Which is why, in the absence of ways to enact our shared values, we default to the lowest common denominator: profit.”

The United States Dollar does not have a responsibility to profit its holders. A cryptocurrency is a monetary instrument, not a business.

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