7 reasons to embrace Web3 — and 7 reasons not to

Web3 promises to bring the best ideas from the world of cryptocurrencies to the rest of the web. What’s not to like?

7 reasons to embrace Web3 — and 7 reasons not to
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In the beginning, everyone was happy just to communicate on the internet. If the packets of bits were delivered without error, everyone rejoiced. Now after several decades of just delivering bits, albeit in bigger and bigger blocks, some are beginning to wonder if we can do better. Maybe just moving the data isn’t enough? Maybe we can start to bring some level of assurance? Maybe, just maybe, there’s something we can do to make the entire experience a bit easier to trust?

For some people, the answer is the buzzword “Web3.” There’s no official committee, and everyone has a slightly different vision of what those four letters mean, but the basic dream is the same: take some of the best ideas from the world of cryptocurrencies and find a way to bring their certainty and security to the rest of the web.

In some ways, the path forward is obvious. Digital cash algorithms date back to the previous century. The best known options, Bitcoin and Ethereum, have been in the works for more than a decade. Moreover, the software is battle-tested and trusted by many with billions of dollars of wealth. People have been talking for years about bringing the blockchain to non-monetary tasks, and some of the biggest and most trusted databases, like Oracle, already have features to support it.

But there are still skeptics with a pointed objection for every success story. They know that cryptocurrencies haven’t eliminated fraud from the web. If anything, they’ve just enabled a different form. It’s one thing for a bunch of zealots to experiment off in a corner. It’s another if the algorithms become part of daily life for everyone.

Here are seven reasons to be excited about the opportunities of Web3 and seven reasons to be more than a tad skeptical. The truth, if it’s out there at all, may lie in some combination of all of these reasons and more.

Decentralized control helps everyone

One of the biggest goals behind the invention of Bitcoin was to spread around responsibility. Indeed one of the early goals for the internet was a decentralized network that could survive a war or two. Web3 embraces this idea and insists that no one person or organization should be the gatekeeper for transactions. Truth isn’t something dictated from above but something that arises organically from a genuine consensus.

This vision for decentralized and shared control is just as good for all corners of the marketplace and life in general. While some may find it overkill to worry about power and control over some of the most trivial parts of the internet, even a casual skimming of the historical record shows that the world has many good reasons to be fearful of concentrated power. Web3 wants to save us from all of them.

Decentralization may be a pipe dream

While the algorithms are filled with theoretical promises, the real implementations aren’t always delivering. Bitcoin mining, for instance, is dominated by a handful of mining pools. The cost of designing, fabricating, and powering custom silicon can only be managed by a few. The idea that all of the world is singing kumbaya while blessing each new block is far from the truth.

The challenge is greater when it comes to smaller niches where the stakes will be lower. If even the highest profile currency ends up in the control of a few, what hope is there for smaller niches? 

Web3 will consume too much energy

Once people realized how much energy was going into Bitcoin mining, environmentalists started wondering why we’re burning so much fossil fuel just to execute an elaborate consensus protocol. Some estimate that Bitcoin consumes more power than a small country – and that’s just before the latest adjustment of the hashing rate for the miners.

Some cryptocurrency zealots say there’s no other choice. For them, proof of work may be outrageously expensive, but it’s the only model that’s got a chance of working. There may not be a definitive answer, but for now there are plenty of serious people in that camp. If they continue to believe in this model, then building out Web3 is going to require plenty of energy.

Web3 will use better protocols

Just because Bitcoin wastes so much energy doesn’t mean that Web3 will need to do the same. There are many protocols that offer some genuine assurance of correctness without requiring a bazillion transistors to be constantly solving some mathematical puzzle. Proof of stake, for example, is a neutral, decentralized protocol. It may not be perfect, but maybe we can get by with an adequate consensus model for a number of parts of Web3? Many people might be just as happy with blockchain managed by a coalition of trusted parties. It may not be theoretically free of domination, but if the coalition is big enough and the process is open, it could be embraced at a much lower cost in energy, silicon, and time.

Web3 will produce better data

Our society is increasingly driven by data. Anything we can do to increase the accuracy of the data will help everyone who uses the information to make decisions. One of the side effects of adding more robust digital signatures and protocols to every interaction means that there will be more structure. Oh, bad data will still find a way into the mix, but cryptography is a very fickle process that forces precision onto every step of the algorithms. Web3 is bound to have more accurate information and that will lift every part of the web that depends upon it.

Web3 will be too brittle

Proponents of cryptographic algorithms like to talk about how sensitive the algorithms are to even the smallest change. One flipped bit in the input could change half of the bits coming out of a hash function or a digital signature. The dark side of all of this accuracy is that the algorithms are unbelievably brittle. Chips are much more resilient but they’re not perfect. Errors are going to creep in. The big challenge for Web3 is to find a way to distinguish between the tiniest bit of noise and a malicious act of fraud.

Web3 will be better than zero trust

Some security teams talk about applying principles of zero trust to their stack. The Web3 algorithms go beyond this by embedding digital signatures that verify the data is complete and accurate. Instead of blindly distrusting each packet, systems can rely upon the general network of users to police the data. Instead of just enforcing zero trust principles on the perimeters, Web3 will enforce it all of the time. 

Web3 will be too complex to trust

One of the recurring nightmares in the world of digital contracts is that someone will find a way to exploit the various rules in unexpected ways. When there’s money at stake, smart coders will find a way to exploit a bug and drain the cryptocoins into their back pocket. There are plenty of sad examples of digital contracts that have gone south. (See here, here, here, here, here.) Even if the dream is possible, and there’s no solid and obvious proof that a certain DAO (decentralized autonomous organization) can’t work, it may not be feasible for humans on earth to actually build a bug-free version.

The permanence of the chain of digital signatures has a dark side. If we make a mistake, we’re stuck with it. Smart app designers will find a way to build in some kind of workaround when some foolish decision needs to be rolled back, but there will be limits. There must be. Because if the data structures and the web of assurance are to have any value, people will need to be bound with them.

Web3 will force better coding

Software is hard to build. We try but bugs find their way into our code. The ideals of Web3 add an extra layer of discipline to the mix and this discipline can only help developers to do a better job. The extra work won’t magically fix every bug but some help is better than nothing. And, yes, development will be more difficult, but the results will be better. You can’t train for a marathon by sitting on the couch complaining about the workload.

Web3 is overkill

Once I was talking to the CEO of a big bank and speaking rhapsodically about the extra security offered by the chain of digital signatures. He sort of yawned. Errors in the bank’s ledger never reached his desk. If there were problems, they always seemed to be fixable. As far as he was concerned, a good database written in the 1960s and running a 1960s-era mainframe architecture was perfectly good enough for the bank’s permanent records. Why complicate it? Why spend more and open up a can of worms by adding an extra layer of security?

Web3 will make users accountable

Many of the problems of the internet begin with people who bear no responsibility for their actions. The world of web3 asks for assurance. The algorithms ask for names. They may be pseudonyms to protect privacy, but reality is not far behind this veil. Implementations of Web3 create real responsibilities for users and even if these connections aren’t perfect, just this step forward is bound to be an improvement.

Web3’s guarantees are an illusion

One of the trickiest problems is what to do when we think the elaborate mathematical edifice built of absolutely undeniable digital signatures is somehow wrong. How dare you challenge the Great and Powerful Oz? But sometimes it happens. The people running some of these blockchains have already made exceptions to rewrite the past. Once you open Pandora’s box and take a bite out of Eve’s apple, all of the magnificent mathematical artifice falls away. It’s all just another politically determined truth by the elites who control the levers.

Web3 beats the alternatives

The old joke ends, “I don’t need to outrun the bear. I just need to outrun you.” The same may be true for cryptocurrencies and Web3. They may never solve all of the problems with the world. They may never offer a permanent and completely trustworthy solution. They may be brittle, onerous, and officious. But if they’re better than human institutions like central banks and regulators, well, that may be enough.

Web3 will spoil the fun

The internet was once a wild and free place where no one knew you’re a dog. It thrived on the evanescent and impersonal disconnection from permanence. It was as free as shore leave in Marseilles with none of the diseases and physical hangovers. The words flew like leaves on a windy fall day and they had as much permanence as the fading warmth on the same days.

The assurance and permanence of the blockchain mean that you’ll never be able to swear it all happened because someone stole your identity or hacked your account. When every click is recorded with the permanence of carved granite, we’ve got to be serious. If unwinding transactions is impossible or at least very difficult, we’ll be sweating bullets from the stress of each click.

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