There is no more divisive technology than the frothy, clubby world of cryptocurrencies, blockchains, token economics, Web3. Divisive, perhaps, doesn’t do the framing justice.
Yes, there are the proselytisers, the “orange pillers”, who represent a core that most likely see a new world order, a reframing of financial and political power around these technologies. But there are also those who see nothing of value in the crypto-ecosystem, rather a set of technologies looking for a purpose, wrapped up in greedy motivations, sitting on top of a gigantic pyramid scheme, wrapped in a messianic sleight-of-hand about reducing Zuckerberg’s power. (Take this recent essay in the latter vane is this by Stephen Diehl: Web3 is Bullshit).
In my many discussions in person (and judging by the emails I receive and will receive from this post), I get a sense that outside of some tech spheres, there is a general fog of confusion around this area which, yes, I’ll call Web3. (See my footnote about this.)
In a short series of members’ essays, I’ll explain how I think about it.
Over the next few weeks, I’ll cover off
- The health of the platform ecosystem
- The user response
- The economic health
- How to read incumbent reactions
- My final take
What is it, anyway?
Part of the problem with cryptocurrencies or the blockchain ecosystem or token economics is categorisation. Are they currencies or not? Or are they sources of value? Does crypto mean privacy? Is every app built on a blockchain, only possible on a blockchain? Is decentralized governance an essential part of this arena? Hard questions. Often with contradictory answers.
Crypto is more complex than most other technology platforms I’ve studied. It has the simple attributes of new technology: a mixture of innovations that can be built upon to create more or less useful applications. But it also has the qualities of a financial instrument, with tokens that are worth something in the mind of other market participants (at least). To some extent, the key part of cryptoinfrastructure is more decentralized – in terms of participation and technical architecture but also in terms of governance – than traditional centralized models of organisation.
This is why the moniker Web3 is sticking. Web3 is qualitatively and mechanistically different from today’s Internet. It also contrasts today’s consumption-oriented centralized Internet we all know. Web3 encapsulates a set of decentralized technology platforms that are more or less interoperable, upon which applications can be built. It takes some of the original ideas of the Internet, such as decentralisation, and adds a layer of native economic mechanisms to it. Those economic mechanisms enable different types of incentive schemes at a protocol level. They also allow for the creation of financial primitives. All of this suggests that new applications, structures and organisations could emerge from Web3.
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