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Web3 Heavily Overhyped? Signal Founder, Twitter CEO and Stanford Professor Share Their Take



February 14, 2022

4 min read

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Web3 or ‘decentralized Internet’ remains the hottest trend in media and public discussions. At the same time, its definition hasn’t ossified yet.

Today, the GetBlock team will sum up the positions of most adamant critics of Web3 from tech elites and the scientific world.

What is Web3?

Web3 or Web3.0 is a term coined out in 2007 by Jason Calacanis, a top-tier tech entrepreneur, business angel, and podcaster. Before the invention of the blockchain concept itself, he described Web3.0 as ‘the creation of high-quality content and services produced by gifted individuals using Web 2.0 technology as an enabling platform’.

Technically, according to Mr. Calacanis, the inception of Web3 practices should allow people to take back control over their digital life from ‘selfish blackhat SEOs’.

As mass adoption of Bitcoin and smart contracts gained steam, distributed ledger technology cemented itself as a technical basis for Web3 interactions. As such, by Q1, 2022, ‘Web3’ refers to a wide array of technologies, practices, and interactions that lack centralized authority and points of failure. Ideologically, Web3 is a successor of Web1 (‘early Internet’) and Web2 with its author-generated content.

Moxie Marlinspike, Signal: Web3 has too much Web2 under the hood

Despite unmatched hype around NFTs and DeFis, some tech enthusiasts and even decentralization advocates slammed the ongoing euphoria. Legendary cryptographer Moxie Marlinspike, the founder of Signal encrypted messenger, noticed that too many ‘decentralized’ apps are relying on centralized services.

For instance, he admitted, the majority of pictures that are offered as NFTs for millions of dollars, are actually stored on Apache and Digital Ocean servers.

Even non-custodial wallets like Metamask don’t interact with Ethereum: they are sending requests to Infura, Etherscan, or other API vendors.

Given the fact that people are too lazy to run their own Ethereum (ETH) nodes, Mr. Marlinspike supposes that distributed technologies should ‘reduce the burden of building software’ to become truly decentralized ones.

Jack Dorsey, Twitter: Web3 is nothing but an instrument for VCs and LPs

Passionate Bitcoin maxi and early crypto investor, Mr. Dorsey slammed Web3 (mostly, DeFis and altcoins) for being too whale-dominated.

According to him, the majority of so-called Web3 protocols are being promoted just to let the high-profile VCs cash out their stakes at the expense of average traders and enthusiasts. By drawing the parallels between venture firms and liquidity providers, Mr. Dorsey hinted at the fact that major liquidity pools donors are connected to Silicon Valley elites.

This statement catalyzed a heated debate; Tesla’s Techno King Elon Musk, former Coinbase CTO Balaji Srinivasan and Bitcoin (BTC) pioneer Willy Woo came to protect Web3. However, Mr. Dorsey defended his take and even hinted at legendary VCs Andreessen Horowitz being masterminded behind the puppet theater of decentralization.

David Rosenthal, Stanford: Bitcoin, Ethereum are controlled by a few

On recent Stanford's EE380 course, tech veteran David Rosenthal, a distinguished engineer from Sun, Nvidia, and Stanford; one of the original developers of the PoW data storage system that is leveraged by Bitcoin and all early cryptos, bashed Web3 segment for economical damage and over-centralization.

He recalled that the lion’s share of Bitcoin (BTC) hashrate is controlled by corporations related to Bitmain which is also the largest producer of mining gear. Also, two mining pools are in charge of 51% of Ethereum (ETH) hashes.

Then, the euphoria around Chia (XCH) cryptocurrency ruined the supply chain ecosystem in Asia. Last but not least, 90% of Bitcoin’s energy consumption is used for internal processes, not for transactions.

Bottom line

Well, it looks like some tech veterans and top-tier entrepreneurs are not so enthusiastic about the prospects of Web3 adoption. However, we’re still too early to judge. And we’re still too early to see the whole picture of how Web3 changes the economics, technology, and daily life of millions.



February 14, 2022

4 min read