The term Web 3.0 is being thrown around a lot, not just those in the crypto sphere, but investors and everyday folk are starting to talk about it. You know, when your Uber driver or barber is talking about Web 3.0, it has permeated the fabric of society.
People have differing opinions on Web 3.0, what it will do for the web, how it will change everything. There seems to be an aura of excitement around Web 3.0, with a hint of ambiguity.
According to Elon Musk, Web 3.0 sounds like bullshit.
Given the hype surrounding Web 3.0 and the turbulence of cryptocurrencies and blockchain, you can understand Elon’s perspective. We are talking about a guy who became a God to many in crypto because of his half-serious support of Dogecoin.
If you want to see the fanaticism in full effect, read some of the replies Elon Musk’ Tweets get. You’ll cringe yourself a stomach ulcer.
What is Web 3.0?
You have heard the term thrown around, but what does it mean? Web 3.0 refers primarily to decentralisation. Many see it as the next evolution of the internet, decentralised web applications not controlled by big tech companies like Facebook, Google or Twitter. An online utopia where nobody owns your data, where you remain in control.
It’s a noble goal; decentralisation is good in all facets of life, not just the internet. A handful of companies shouldn’t have all of the power. Many countries have antitrust laws, but they seemingly don’t do much these days.
With web 3.0, users are in control of their data again. Everything is transparent on the blockchain, with no bad big-tech influence or agenda. It all sounds good on paper, and venture capitalists agree. An estimated $17 billion was poured into Web 3.0 companies in the first half of 2021.
Echoes of 2017 IPO’s
In 2017, it was the year of cryptocurrency IPO’s. Anyone with a slapped together whitepaper, made up advisory team, and a good mascot/leader who was the project’s face could make tens of millions running these fundraising rounds.
As you might be aware, many of the projects that ran IPO’s in 2017 are not around anymore. And, the ones that are, they didn’t offer the returns some were expecting. Promises didn’t become a reality for a lot of crypto projects.
It feels like a minority of people in the blockchain space care about web 3.0, and the majority are in it to see the value of their favourite shitcoin go up 1000%. And before you start accusing me of sounding bitter because I missed out, I’ve been in crypto since 2016 (I was one of the early investors in Monaco Card, now known as Crypto.com).
I currently hold BNB, ADA and BTC (mostly). I have small amounts of other coins that I leave sitting there in my Binance account. I’m not a professional investor; most of my success in crypto has been luck.
The thing that makes me err on the side of caution is the inescapable hype. Like anything good in blockchain, the “moon bois” hype things up and blow them out of proportion, and it’s only when the market begins to slide backwards that you see who the true believers are.
Knowing that VC’s are swarming to Web 3.0 as they did with NFT’s, I’m cautiously optimistic. I want to see a decentralised web, but I am dubious that it’ll ever happen on a large enough scale to have a meaningful impact beyond making some Ethereum and other obscure blockchain hodlers richer.
Before we dream of a future where blockchains power web applications and our daily lives, maybe we should get the systematic security issues sorted out first? Many Defi projects have experienced attacks due to poorly programmed smart contracts or flawed governance models.
A recent attack on a platform aiming to bridge blockchains was hacked, and with it, $600 million approximately in cryptocurrency was stolen. A few days ago, BadgerDAO was hacked for $120 million. I can imagine the first famous wave of Web 3.0 applications will be full of flaws. The blockchain might be secure, but if your smart contracts are crap, it doesn’t matter how secure your blockchain is.
When Web 3.0 solutions become more mainstream, they will not be 1:1 replacements. Any Web 3.0 solution will be more of integration within existing sites and applications. Think of logging into a site like Twitter with a blockchain identity instead of an email address, that kind of thing. Even so, thanks to browser extensions like Metamask, that is already possible.
Barriers to adoption
But then you have the most significant barrier to adoption: fees. This is the part of Web 3.0 I can’t work out; who pays the fees? I think we know that the only blockchain around right now that could handle the next Twitter or Facebook is Ethereum, where the gas fees are exorbitant.
If these alleged Facebook and Twitter replacements are blockchain-based, users will not spend money posting a status update on their microblog or uploading an image to blockchain Instagram. Imagine being charged a fee to post something and having to wait a couple of minutes for whatever you post to appear?
Once you solve the fees problem, you have to solve the onboarding problem next. Onboarding into most blockchain-based applications is like pulling your teeth out with a pair of pliers. Strangely convoluted confirmation screens, remembering long seed phrases, confirmation times.
There are solutions to some of these problems, but for other problems such as the fluctuating and sometimes exorbitant gas fees, not so much.