As a software engineer, what is your take on the underlying technologies behind Web3? What do you think of blockchain? Is any of it useful?
This “new internet” that has been proposed, much to the disdain of software engineers worldwide, is one where anytime you upload a photo, save something, post a tweet or put something on YouTube, it costs money. Every time you write something to a blockchain with crypto, you need to pay the miners.
No matter what gets built in this “new internet”, fundamentally who is paying the miners? Because it doesn’t work unless the miners get paid. So, what does that mean for accessibility? What does it mean for equity? What does it mean if we have an internet that’s only usable if you have money?
If that can’t be answered, essentially we’ve got an internet where all applications will be pay-to-play. Now there are companies with alternative approaches where they’re trying to bring those fees down to very minuscule amounts, but still, you need to pay to use it and that’s a fundamental problem.
What about private blockchains?
If it’s permissioned, running privately, yes there are companies playing with it. But we still haven’t found a use case for that. Instead, what we do see is a lot of very smart people going into that space, becoming good friends and then ending up starting a traditional internet company instead.
If we look at NFTs for a moment, if you remove the art part of it and view them purely as an asset class, like an equity, does that make them more palatable?
People have always loved the ability to show off. When the original iPhone was launched, there was an app in the App Store called “I Am Rich”, and it was a $999 red button. Bored Ape Yacht Club is the equivalent of this, it’s just a status symbol.
An NFT is a link to an image. If you buy a Bored Ape for a million dollars, I can come along and create a duplicate NFT for $10 linking to the same image. Where’s the value in that? Is it the monkey that has value? Did you spend a million dollars for the monkey or for the record on the blockchain?
I just got a knockoff for essentially nothing. And the general layperson will not be able to tell the difference between the real Rolex and the fake Rolex.
Sure, but that doesn’t stop people from buying real Rolexes.
But companies like Rolex spend a lot of money on enforcement to get rid of counterfeits because counterfeits remove the willingness for people to play to pay the high price for an original.
With Web3, just because it’s written on the blockchain doesn’t mean it’s true. Anyone can write anything on the blockchain if you’ve paid the miners. So if I pay $10 to create an NFT linking to your same image on the blockchain, it creates this tension.
What is value, is it the image or the record on the blockchain? We have one authentic thing on the blockchain, and one inauthentic, but who says what is authentic and what’s not? Web3 is meant to be about decentralisation, but to certify this, you need a centralised entity to determine what is and isn’t authentic.
“People came along and said ‘our new thing is the next iteration of the Internet’. And that pissed off a lot of engineers.”
Software engineer Geoffrey Huntley
Plus, even if you’re Rolex and you see people making counterfeit NFTs, you can’t do anything about it. The blockchain is append-only, no deletions. So, we’re seeing these companies move into this space, not really knowing that their ability to enforce the IP is gone.
So, what’s the future of Web3? Do you think we’ll see it all fall apart, or will it stick around?
I still have an iPhone, which came out 13 years ago – blockchain also came out 13 years ago. The iPhone has changed the world in that time, but crypto has not. It has searched for a use case and the one use case it’s really found is extortion.
Right now, there’s a huge engineering pushback against Web3, so I think it’s likely we’ll see the term Web3 be reclaimed by engineers. Then crypto will probably just move on to the next thing under a new name because it launders terms, pitching old technology under new names and saying it’s growing, and it’s early days.
Whether it’s crashing, or whatever, I don’t know, I just recommend people read the work done by Stephen Diehl, Molly White, and Ben McKenzie, that’s where some of the most informed critiques are on what’s going on in this space. And that’s also where all the regulators are looking as well.