Alarms ring at chance of being caught in Web 3.0
Utopian ideals of democracy drive its fans, but the realities of the physical world leave many skeptical
Any time I hear anyone talk about “crypto” — that, well, cryptic set of technologies that includes things like the blockchain and bitcoin and NFTs — every alarm bell in my head goes off.
More than once I have thought to myself: this whole thing seems like a scam.
But even dubious technologies can have real-world effects. Just this week, a group of crypto enthusiasts got together to try and purchase one of 11 remaining copies of the U.S. Constitution.
The future is, if nothing else, going to be very very weird.
But crypto is part of a growing set of ideas grouped under the moniker of Web 3.0. It is a collection of technologies and ideas loosely organized around the blockchain that, at least according to proponents, promises to revolutionize commerce, how we organize and perhaps even democracy itself.
Others, however, assert that Web 3.0 is nothing more than a Ponzi scheme.
As happens with these things, the truth is likely somewhere in between, with the caveat that, as with Web 2.0, there is a lot of hot air, money and bad faith in the mix.
Perhaps more importantly, as also happened with Web 2.0, whatever few core, promising ideas there may be, the influence of money, business models and greed may quickly put an end to any utopian ideals.
Understanding Web 3.0 first requires some understanding of the blockchain.
At its core, the blockchain represents an immutable ledger for recording any exchange of data. A financial transaction is the most common example, but it could also be a certificate of ownership, or even just belonging to a group.
Unlike most computer data, which is by nature changeable, the blockchain is a permanent record, and part of its permanence and security comes from the fact that it doesn’t exist on a server somewhere, but is decentralized, spread across the mass of users whose collected individual pieces of it comprise the blockchain itself.
The most common application for that permanence is to record financial transactions in the form of cryptocurrency, which gets its name from the complex cryptography used to secure the blockchain.
Bitcoin and Ethereum are the two most common digital currencies, though given their wild and volatile pricing, their potential for use as a traditional currency is still uncertain.
But Web 3.0 is also a set of principles that also rely on the notion of decentralization. In opposition to Web 2.0, where massive companies like Facebook, Google and others essentially control and run the services we use on a day-to-day basic, Web 3.0 is an attempt to distribute things like ownership or commerce over networks so that no one person owns it.
In the case of the U.S. Constitution, the group attempting to buy it is using a DAO, or decentralized autonomous organization, to gather their resources. As the name suggests, no one person is in charge.
In theory, then, Web 3.0 sounds like the ideal of democracy realized, and indeed this is how crypto-enthusiasts often talk about things. With decentralized organization and commerce, the line goes, the individual is finally free. No more banks or governments intruding on financial transactions, no more top-down organizations and now there are even ways to monetize digital goods.
That, however, is only in theory. The trouble with the rhetoric of Web 3.0 is that it runs into the realities of both the physical world and the legal and social structures within which they exist.
Take our constitution-buying friends: as the Wall Street Journal points out, even if their bid is successful, who goes to pick it up?
It can be easy to forget, but under democratic, capitalist systems, things like ownership are tied to things like the individual or the corporation, as well as private property laws.
The trouble with decentralized systems is the basic concept of owning something shifts, and our laws or the practical realities of physical things don’t line up easily with the breezy ideals of crypto.
Far from some sort of proto-communist or utopian rejection of commerce, however, one of Web 3.0’s main issues is that it promises the commercialization of everything.
Take NFTs, or nonfungible tokens, the most recent Web 3.0 hot topic. They are essentially a way to denote ownership of a digital item — a digital collector card, or a piece of art.
Note, however, that you don’t own the thing itself, because digital things can disappear, or simply be copied; you simply have a certificate saying that you own the original thing.
It sounds like a scam, doesn’t it? Still. When the car was invented, no one understood that it would lead to things like Costco or the suburbs.
The effects and applications of technology can be unpredictable, and perhaps there is some truth in all the hype.
But like Web 2.0 before it, the charlatans and the capitalists are working hard to popularize something with a great many downsides — and alarm bells, at the very least, are more than appropriate.