Web3, hyped as the next big thing that will replace the internet, is being built on blockchain technology and its proponents say it will be decentralized with no single point of failure — in other words, distributed away from central, authoritative decisionmakers.
However, Twitter co-founder and former CEO Jack Dorsey and Tesla CEO Elon Musk, arguably two of the biggest stakeholders in the internet as it exists today, have been questioning just how decentralized Web3 will be.
While some see Web3 as the future of the internet, Dorsey is suspicious of the large volume of venture capital pouring into the space and unimpressed by Web3 advocates’ claims of “true decentralization.”
Leading the way of the future, Web3 is generally being built by those involved in blockchain smart-contract platforms such as Ethereum, Bitcoin, EOS (the blockchain-based entrepreneurial operating system) and TRON, one of the largest blockchain-based operating systems in the world.
Advocates of Web3 say the major innovation is the creation of platforms that are decentralized: no single entity controls them but, in theory, everyone can still trust them. Web3 has no established definition yet on what it is or what it will be because it is still being built. Unlike previous versions of the web, there is no inventor of Web3. It has grown as a collaboration of different people and organizations building on top of each other.
Tesla billionaire Musk doesn’t believe the hype about Web3, tweeting on Dec. 19 that Web3 is “more marketing buzzword than reality right now.”
An estimated $17 billion in venture capital funding flowed into cryptocurrency projects in the first half of 2021 alone, raising questions about their independence.
“A lot of these companies are so well-capitalized,” said Evan Cheng, co-founder and CEO of Mysten Labs, a blockchain infrastructure-focused startup, in a New York Times report.
Dorsey stepped down as CEO of Twitter on Nov. 29 and days later, changed the name of his payments company Square, to Block, expanding the credit card-reader business to focus on new technologies such as blockchain.
“You don’t own ‘web3′” Dorsey tweeted on Dec. 20. “The VCs and their LPs do. It will never escape their incentives. It’s ultimately a centralized entity with a different label. Know what you’re getting into…”
Some Twitter users accused Dorsey, an ardent Bitcoin fan, of being anti-establishment. “He’s just about being anti ETH and trying to make ETH seem like the establishment — it’s BTC or bust for him. the most anti establishment movement is being built on @ethereum and he clearly doesn’t like that,” rahilla.eth @rahilla tweeted.
Dorsey replied, “I’m not anti ETH. I’m anti-centralized, VC-owned, single point of failure, and corporate controlled lies. If your goal is anti establishment, I promise you it isn’t ethereum.”
Farokh.eth @farokh defended Dorsey: “People don’t understand the @Jack isn’t anti web3, he just is anti establishment within web3 so we don’t repeat the mistakes of web2. Jack, join us and let us build it with you!”
Chen Li, CEO of Youbi Capital, invests heavily in Web3. “We also feel that it is necessary to get VCs involved,” Li said during an interview on Coindesk TV. “We incubated some projects and we worked with (venture capitalists) very closely for a long period of time … We know that a lot of VCs take this approach to work with projects closely, not only the marketing and tokenomics but even really pull up their sleeves to really do a lot of developmental work to contribute cryptographists or developers to really help the project.”
“I think eventually things will be more decentralized,” Chen added.
“Has anyone seen web3?” Musk tweeted on 12-20. “I can’t find it.”
“It’s somewhere between a and z,” Dorsey replied, implying that Web3 is already being controlled by Silicon Valley venture capital firm Andreessen Horowitz aka a16z. An early Facebook backer, a16z now advocates for Web3, according to Futurism. Its founder, Marc Andreessen, is investing $2.2 billion in blockchain and crypto startups.
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