The Web3 Ponzi
From products to exit liquidity
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Web2: You are the product
Web3: You are the exit liquidity
Web3, the new era of the Internet. In recent months this term has become mainstream. It seems nobody can really avoid joining this “new” Internet. With the word Web3, we identify a decentralized world wide web powered by blockchain technologies. In other words, we are talking about a new internet where people own their data and assets and interact without trusted third parties.
Despite the big claims and the powerful marketing campaigns, nothing just stated above is an achievable goal.
In this series of small posts, I would like to point out the many flaws of this approach to the Internet. The hope is to stimulate a fair discussion enabling interesting ideas to arise.
Crypto Bros are not your friends.
For the sake of this article, you can consider a CryptoBro every person you have encountered online or offline that is heavily attached to crypto.
Despite many of them being sincerely convinced in what they claim about the Web3 world, be wise. Besides offering you incredible yields and return on investments, they could leverage some compelling arguments. They could talk about empowering people, fighting against central banks and big corporations, and owning their assets. The idea is to create a fair internet where people are not merely exploited as products by big corporations. This vision sounds very compelling to many, me included. This is also what brought me to the game early on in 2016. However, there are some flaws in the practical implementation of such a system.
Those Who Do Not Learn History Are Doomed To Repeat It.
The Internet is a decentralized system. A truly decentralized system. Everyone saying that the Internet is in the hands of the big corporations is to a very high degree, lying. Literally, no one is stopping me from starting a new server and being the new Amazon. Even if all the providers in the world refuse to host my new application, I can build my own here in my house and reach my customers.
History has shown us that decentralized open systems are great for sparkling innovation. Unfortunately, due to laziness and economic forces, innovation leads to centralization. When the Internet was a place for geeks, everyone had their own email server at home. With time, email service providers arose in people moved on. In 2022 nobody is hosting its own email server despite nobody stopping people from doing that. Why? Because we already have a beautiful decentralized system which is called the Internet. This system is created to let anyone do whatever he wants. Please remember that.
Understanding the evolution of the Internet will help you grasp the situation of blockchains on three fronts:
Scale
First, only permissionless and open systems can achieve global reach. There shouldn’t be barriers to entry. Everything that needs heavy investment to use and access will not scale globally. If to use the system I need to pay thousands of euros for equipment or “Playable characters” for sure is not gonna reach everyone. The rules of the Internet game, the so-called protocols, were developed by academia. Then maintained by organizations such as W3C. Joining those organizations is and was easy for individuals.
In a blockchain, the rules of the game are maintained by nodes. As long as they stay vendor-neutral and open to anyone, there is the chance to reach a global scale.
Decentralization
Nobody cares about decentralization. With time we will see a centralization of power and innovation. This is due to the nature of the economy and humans. Seeing what happened to the Internet, we can envision something similar happening. On my Youtube channel, you can find in-depth reviews of many projects in this ecosystem.
Many Crypto Bros talk about the Dot-com bubble and how crypto is still in its infancy. I totally agree. With time, few companies will crack the business and leverage the technology to deliver value to their customer. Regardless of what degree of decentralization they will have. It is also likely that the more centralized they are, the more worth they can develop.
Value
Not only nobody cares about decentralization. The reality is that nobody cares about technology. The only driver is value. What are you delivering to me? What do you enable me to do?
The Internet success was the possibility of delivering services leveraging an open infrastructure. Can we say that blockchains are doing the same?
Being inside the ecosystem I don’t see still any easy way for me, an individual, to deliver value through those systems. I can only push you to buy so I can drive the price up and later sell, getting my Lambo.
The Scam
The equation is quite clear. Moving from products to exit liquidity.
Individuals are still not a priority. Looking forward to a decentralized future without big corporations driving innovation and money is stupid. Make sure you look at those projects not as disruptive technologies or bright futures, but as a speculative investments.
This article was intentionally highly critical of the space and I made a lot of simplifications. The truth is that there is still a lot of work to have something that can deliver what was promised over 10 years ago.
Make sure to follow my content because in the next article I would give an overview of the beautiful thing blockchain is bringing to the market.
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