Web3 skeptics and believers both need a reality check
The potential for Web3 is massive. Web3 is overhyped. These are both true and that’s fine. Cryptocurrency and Web3 have captured the interest of many; is it the future of the web? Maybe. An inspiring story wins people to your cause, while the messy truth is usually found somewhere in the middle.
What is true about these technologies is the interest and possibilities they hold. New open source projects and startups rise everyday to build the next generation of decentralized applications. But thanks to opportunists and scammers, blockchains and Web3 are in danger of becoming more of a meme, and not in a good way.
Determining what’s real about Web3 is hard; so much is hype or FUD. Understanding which is which and what’s genuine can help us move forward as an industry. In this article, we’d like to talk to both the bulls and the bears, and inject a little reality into both of their conversations. To crypto idealists, let’s say good morning to where Web3 is actually today, and for skeptics, let’s take a step back and reassess the FUD.
What is Web3 anyway?
Because there’s so much misinformation around Web3, let’s start with a definition. Web3 was coined by one of the creators of Ethereum in 2014, Gavin Wood. He says, “Web3 is an alternative vision of the web, where the services that we use are not hosted by a single service provider company, but rather they’re purely algorithmic things that are hosted by everybody.”
The promise for Web3 is a user-led internet that isn’t as easily manipulated or controlled by centralized parties. Web2 has been dominated by walled gardens—think massive social networks, operating systems, browsers, and app stores—platforms owned by a few companies that can make changes on a whim, ruining other businesses built on top.
BitTorrent and its peer-to-peer network for file sharing is a good, early example of what Gavin and others support in this space and want to see the proliferation of. Note how this example doesn’t use a blockchain and doesn’t require cryptocurrency or a token. Like most technology decisions, if your use case doesn’t need it, it shouldn’t have it.
Web3 advocates argue crypto and blockchain can be added and layered on applications like BitTorrent to enhance incentives, ownership, and transparency as needed. While losing an mp3 file using a peer-to-peer system like BitTorrent could be acceptable, it’s likely not acceptable for other use cases, like holding your account balance or handling the exchange of valuable assets.
The true challenges of Web3
With any new frontier, market, or technology there are rough edges. Concerning and admittedly entertaining sites like web3isgoinggreat.com exist and cite nearly $10 billion in losses because of crypto’s particularly rough edges.
The vast majority of these ‘losses’ are happening above the underlying infrastructure, or layer 1 network, where consensus and settlement occur. You’ll find most are caused by inexperienced or poor development practices or bad actors that take advantage of unsuspecting victims. To be clear, neither of these are acceptable and we must collectively do better, but there is an important difference between the technology itself being evil and those deploying on it being evil.
Stakes are high
The most popular and innovative decentralized applications available today are in the realm of DeFi, or decentralized finance. Decentralized finance takes aspects of traditional, centralized finance including exchanges, loans, and derivatives to make them run entirely on a public ledger without need for human intervention or interference.
Most of these applications are run by one or more smart contracts communicating across each other. Users interact with them in a self-sovereign way, being responsible for their cryptographic keys to sign the transaction. A majority of funds on a network today—often referred to as total value locked (TVL)—are held in a smart contract. One poorly written smart contract can be responsible for losing millions of dollars or even locking funds into a smart contract unable to ever be withdrawn. This is all too common. As such, new tools, practices, and audits are constantly being introduced to try and overcome these issues.
Due to the nature of these applications and aspects intrinsic to distributed ledgers, users bear more responsibility and thus take on much more complexity than other web technologies. It turns out, being your own bank can be challenging for many today.
It sucks to use
Web2 perfected user flows over trillions of interactions down to the pixel. Web3, being a less mature technology, has not.
If you haven’t done so, I invite you to try to use the technology as an end user. On whichever network you like, attempt to buy a NFT. Don’t worry, you don’t have to really buy it to get enough from this experience. You’ll typically find a flow as follows:
- Install a browser extension
- Create a wallet account
- Save your keys securely
- Navigate to a website
- Find a NFT you like
- Be prompted to sign a transaction
- Not have enough funds to sign the transaction
- Have to find an exchange
That’s a high barrier to entry to purchase a silly profile picture. Most users don’t want to go through that process; they want a button that says “Buy” and then be done. And we haven’t even begun to talk about performance.
On proof-of-work blockchain based networks, like Ethereum where the majority of NFT transactions are happening today, transaction fees are extremely volatile, expensive when the network is in heavy use, and painfully slow by any modern standards.
The ethos and benefit of this movement is decentralization. It reduces the power, control, and limits of a centralized entity. A core part of achieving decentralization is through how a network achieves consensus and how it makes decisions through the individuals operating on that network. Depending on your viewpoint, miners have centralized Bitcoin with five mining groups taking up the majority of hash rate. Some argue VCs have already centralized Ethereum, with many projects seeing billions of dollars of traditional Silicon Valley investments.
At the end of the day, if a few parties have still managed to consolidate control, are we progressing and is it worth all of this? All hope is not lost. One potential silver lining is that the transparency with which we understand this is beneficial enough. The public ledger can tell us a lot more than a private CAP table. There are also different models being considered with regards to both consensus and governance throughout the extended ecosystem. For example, some applications are doing a better job of exiting to their community, typically by rewarding tokens directly to its most active users with projects like Ethereum Name Service and Optimism leading the way. Having to have continued and ideally increasing decentralization is a challenge across economics, sociology, and technology. That’s difficult to do well.
Take out the FUD
For the problems above, some can be solved through advancement in the technology, like higher throughput, and some, like poorly written smart contracts or a user losing their keys, reduced through adoption of best practices. These critiques of crypto are absolutely true, widely accepted, and must be improved upon for the technology to be taken seriously.
In addition to these actual problems, there are many misconceptions and much misinformation that creates a seismic amount of fear, uncertainty, and doubt (FUD). When people look down on crypto technologies, they usually think about these things. If there’s anything to take away from this post, it is that these characteristics of a public ledger aren’t entirely true.
In 2008, Bitcoin introduced proof of work, a compute and energy intensive way to come to consensus in adversarial environments, and by doing so left a stigma on all crypto technologies. Rightfully so, as Bitcoin consumes more energy than many countries. For a new transaction block to be validated, proof of work requires individuals on the network to competitively decode a hashed value to validate new transactions.
The good news is that since then, the majority of Web3 applications and cryptocurrency use doesn’t require a country-size portion of electricity to exist. Many, including Ethereum, the second largest network in terms of market cap, are moving to proof of stake, which requires only that the validator hold a number of tokens and therefore be directly affected by malicious transactions. This will reduce energy consumption for these transactions by over 90%.
Newer networks (shown in the chart above) reduce energy needs by even more, and layer 2 networks on Ethereum show early promising signs that they can further reduce energy use by bundling transactions together to reduce the number of individual transactions required to settle on Ethereum. Overall, the industry is moving from a single bitcoin transaction taking multiple days of a family home’s energy consumption to modern blockchain networks expending the energy of a web search.
It is 100% true, in my opinion, that crypto networks have collectively spent too much energy getting us this far, but that doesn’t mean we’re stuck here. All new technology shifts take time to be better, more efficient and faster. For public ledgers, there are both changes to existing networks and new, more efficient networks available today to remove us of this stigma.
Yes, blockchain and public ledgers are inefficient when it comes to general data management. Bitcoin can handle tens of transactions per second, and Ethereum is not too far above that. But distributed ledgers are not meant to be databases. They’re not optimized for storing click data or even general user data, and it’s the wrong comparison to make for them. The truth is that some ‘decentralized applications’ still use a traditional database for a large portion of their application.
Distributed ledgers are intended to keep track of the most important and critical data, such as your account balance and identity credentials. Data that we, ideally, wouldn’t want a single centralized entity to control the entire landscape of. These types of use cases don’t require the scalability of Kafka, but for public ledgers to reach success they do require greater than 20 transactions per second; thankfully, that’s already here.
Scalability solutions on top of Ethereum, like Polygon and Optimism, are making some improvements. Newer layer 1 networks like Hedera that don’t use a blockchain at all but an alternative called hashgraph, are able to drastically reduce these performance challenges to already run on par and beyond the speed of the VISA network today.
Nothing is worse than bolting on a technology to a problem that doesn’t exist. We don’t need or want to continue the Uber for X trends with X on Blockchain, so it is critical to understand the actual attributes of a public ledger.
New development principles for Web3
Despite the existing challenges and FUD, Web3 is a promising step towards addressing concerns of excessive control, access, data ownership, and even censorship that exist in Web2 today. As a key enabling component of Web3, crypto networks introduce a new set of principles and tools available for developers to create entirely new applications and enhance existing solutions. Some of the principles being most actively explored are:
These principles can be used individually or come together to build more robust decentralized protocols and applications.
A core premise of public ledgers is that the data is append-only and unable to be modified after the fact.
The Hedera network processes the most transactions of any public ledger on a daily basis. A majority of the transactions are from businesses that want to have the highest degree of data integrity for a multiparty process. Often, a developer will have a data feed that they want recorded as an immutable source of truth for a third party to verify. To achieve this, they’ll send a hash of the transaction to the ledger.
When compared to centralized infrastructure, using a public ledger as a neutral actor in the system takes advantage of its true immutability. This has a number of applications ranging from auditable logs to identity credentials.
The transparent nature of a distributed ledger provides stronger guarantees of the information it holds and, in the case of smart contracts, the rules the contracts abide by.
Today this transparency is used to readily verify the uniqueness or rarity of NFT collections today, but could be used for better understanding your government’s spending, voting, or a business’ carbon offsets tomorrow. This degree of total transparency and access to information is not possible in a centralized database.
Smart contracts allow us to bring all of these characteristics of our ledger together and add autonomous application logic. Smart contracts are terrific for holding tokens on behalf of a user, for instance to support a collateralized lending protocol.
The majority of smart contract developers today are using Solidity, a Turing complete language initially created for the Ethereum Virtual Machine, which has become a default and expanded to other EVM compatible networks.
By having logic that is immutable, transparent, and atomic, we get the benefit of interoperability and composability. Networks can communicate across each other using standards to frictionlessly move assets or your application can call a smart contract that another developer already deployed to easily tap into the existing ecosystem on a network.
While developers explore this concept in new frontiers like decentralized finance, sometimes referred to as DeFi, there are also more practical use cases to get your footing, too. Take, for example, a loot box. Loot boxes are a common game mechanic where a player receives a box as a reward for achieving a milestone in a game.
Loot box rewards and odds of receiving them are, historically, opaque, although government regulation is beginning to come into view. A better, more equitable implementation for loot boxes could be by using a distributed ledger. The odds of you to receive an item could be transparently defined in a smart contract. The results would be verifiably random. The output could be an NFT to show ownership of your newly earned asset.
Having this process take place on a public ledger unlocks greater assurances for user bases, but also makes it easier for other game developers to reward existing user bases for perhaps a specific item held, and opens up more potential options for secondary markets.
Give Web3 a (grounded) chance
In some ways, web3 is a continuation of open source principles. Core beliefs in collaboration, transparency, community, and freedom of choice moving up the stack.
Web2 built a set of walled gardens owned and controlled by very few. A better way to design these applications going forward may be to break apart the protocol from the user interface. This separation of protocol and client, a digital church and state, is a meaningful difference in how decentralized applications can be designed.
Instead of a developer being able to use a type of database, they’re able to use a specific type of data schema, like an ERC-721 non-fungible token. Instead of a developer being able to move their open source database from using AWS to Google Cloud, end users are able to directly and freely move from client application to application.
The reality is that after we remove the noise, blockchain, crypto, and Web3 is a place that a developer can make an outsized impact. From the outside it can feel like you’re jumping into the Matrix, choosing the pill you want to take, or often don’t (which is ok too!). This doesn’t have to be the case and, on both sides, we need to get better at understanding our faults and misinformation.
If you’re interested in dipping your toes in to Web3, a few good communities to get started are Buildspace and Pointer, free education with welcoming communities. If you’re just looking to get hands-on with Solidity smart contracts, the most popular smart contract language supported by networks like Ethereum and Hedera, CryptoZombie is a fun and easy way to get familiar. Once you’re dangerous enough, hop into Gitcoin to find a grant for some freelance work or find one of the many hackathons in the space for an opportunity to learn and hopefully win.
The Stack Overflow blog is committed to publishing interesting articles by developers, for developers. From time to time that means working with companies that are also clients of Stack Overflow’s through our advertising, talent, or teams business. When we publish work from clients, we’ll identify it as Partner Content with tags and by including this disclaimer at the bottom.Tags: blockchain, partner content, partnercontent, web3
I don’t necessarily mind seeing articles like this. But IMO it should have been accompanied by something explaining that Gehrig Kunz is Director of Product Marketing at Hedera… if only to explain why Hedera gets So Many Callouts in this article, for a relatively low-profile project/company.
I’ve updated his display title. This is partner content, but there’s currently a bug where the categories are prioritized alphabetically instead according to internal selections, so the display category at the top is Code for a Living instead of Partner Content.
Thank you for the update — frankly I would like to see a disclaimer at the top that Hedera is a cryptocurrency company and so has skin in the game here. Not just reputation, but real financial incentive.
> It is 100% true, in my opinion
Which is it? Truth or your opinion?
Anyway, the fact is that nobody wants a blockchain or currencies built on a blockchain. What people want is to feel like they have control over their lives. Blockchain advocates promised this, but the result was the opposite.
This system makes the mistake that has been made plenty of times before. It’s trying to solve a people problem with technology. The problem is not that we don’t have the right tools, the problem is trusting people is hard. Saying you don’t have to trust anyone because you can see all the transactions is wrong and misses the point.
It’s wrong because
a) you can see your copy off the transactions, but of course bad actors can supercede your copy, so “truth” is malleable, people or organisations with enough money can buy control of the blockchain, and then we’re in a worse situation than we were before.
b) have you ever looked through the blockchain? Has anyone? Even if you could hold people accountable for their action, does anyone?
It misses the point because it doesn’t solve the problem that trusting people is hard, it just tries to ignore it, and fails at that too, because you still have to trust people you don’t know: the developers, the people who have your wallets, any other third parties.
If you want to play around with this, don’t let me stop you, but for the everyday person it creates more problems than it solves.
You are right in that the thing people seek is ultimately trust and control. This has proven difficult with many early distributed ledgers because of the difficult in finding a technology capable of solving the “blockchain trilema”, particularly when it comes to security. It has been the case on certain chains that we see bad actors controlling the network for personal gain and that has cast a bad light on the space as it develops. I believe the space will change drastically once regulators step in and implement crypto legislation. Events like what has happened with Luna and UST should be proof to the regulators that this process must be implemented ASAP to bring clarity to the space. Many of the cryptos you hear about today will likely not survive this regulatory shift. However, the potential of the underlying technology behind DLTs are not to be overlooked. We are simply still at the very beginning of the dawn of web3 and the decentralized economy and there are and will be many growing pains. But behind the curtain, and out of the spotlight, many of the smartest minds are working hard to build out the infrastructure of a system that actually works how it should and scales to the masses.
Hedera, the Hashgraph based DLT mentioned in this article would not be subject to your concerns about trust in blockchain and bad actors. It’s a POS network using a gossip about gossip protocol. The technology implements a 3-5 second finality time with timesamps and fairness of ordering. Because the validator nodes are all (currently) run by a council of world renowned enterprises and institutions, a hostile network takeover (AKA a 33% attack) would be feasibly impossible. It would mean entities like Google, IBM, DLA Piper, IIT Madras and about ten more, would have to all collude to break the security of the ledger. This is part of the genius behind Hedera and it’s combination of technology and governance. Leemon Baird and Mance Harmon – the founders of Hedera – set out to solve this exact problem of trust you are mentioning. This is why they have built “the trust layer” of the internet.
Just my 2 cents, I’m not affiliated with Hedera in any way, just a fanboy who believes in what they are building.
If a group of large companies control the validator nodes for a POS blockchain, isn’t that not much different (from a decentralization/libertarian mindset) than the existing financial system?
Yeah I’m agree .. but we can see it from other side too
That’s usually the knee jerk reaction when people learn about Hedera’s governance model, which is very understandable.
However, it begs the question, what does decentralization really mean? The purpose of decentralizing a network is to ensure that no one party or group of bad actors can maliciously change on chain data. Most POS networks are governed by a weighted stake voting protocol that naturally leans in favor of whoever holds the most tokens. Typically these people are founders of the project, developers, and whales, some of whom are doxxed, but a large majority of whom remain anonymous.
Now you can decide for yourself: Who do you trust to NOT collude to perpetrate a malicious attack on the network?
A group of anonymous wealthy individuals?
39 world leading organizations and institutions with reputations to uphold who are actively contributing to and using the network to build services for their business’ to operate?
Personally, I feel much better about the second option.
Hedera’s network has also implemented permissionless nodes on their roadmap since the inception of the project. So some day soon, anyone with an average computer will be able to run a node.
Also, nearly all of the actual decisions on changes to the network come from HIPs (Hedera Improvement Proposals) that are freely submitted by anyone who decides to do so.
So noise all too common, but that aside what happens when they are just doing this to cover up the original issue. Which requires something people apparently felt was never going to be possible? Cause I know well enough they have their motives. Aside from all their drama any recommendations for the not tech savvy whos luck hasn’t favoured the social norm.
> Web3 was coined by one of the creators of Ethereum in 2014, Gavin Wood.
And he didn’t think there would be a potential for confusion with Web 3.0?
No mention of the fact that NFT sale count is down 92% since November of last year? (Paul Vigna, “NFT Sales Are Flatlining”, WSJ) It seems those who need a reality check here are not the skeptics, but the believers. Blockchain will see increasing uses, but Web3 and aiding decentralization is not one of them.
This article is deeply flawed and authored by an employee of Hedera Hashgraph LLC, a company that has issued an unregistered security called HBAR. Frankly, this post should be taken down because any association with Hedera opens up stackoverflow to liability when/if the SEC finally comes down on Hedera’s illegal securities offering, which was done via an ICO (Initial Coin Offering) in 2018.
I want to refute two misleading points in this article:
1) Bitcoin miners don’t USE energy, that makes it sound like they are somehow stealing it. Bitcoin miners BUY energy.
To put the amount of energy that the bitcoin network purchases in perspective:
Bitcoin buys less energy than global Christmas light use.
Bitcoin buys less energy than global tumble drier use.
Bitcoin buys less energy than the global cruise ship industry.
So to say that bitcoin ‘uses’ too much energy is a pretty stupid statement. If bitcoin wasn’t creating a lot of value, then all of those miners who purchase real electricity using dollars/yen/euros/etc would go out of business.
Furthermore, who are you to say what is an appropriate use of energy?
The answer is that we don’t really know what is valuable or not in the world, this is a subjective judgement, so we let markets figure that out. Well, the energy markets have spoken and they seem to like bitcoin.
So the question remains, why does this Hedera promoter bash bitcoin regarding energy?
Well, the answer is that the HBAR coin runs on a blockchain that uses a different consensus mechanism than bitcoin. This consensus mechanism likely doesn’t work and relies on a lot of trust in the Hedra company, which is why HBAR is an unregistered security, unlike bitcoin which is recognized as property by the IRS. HBAR’s consensus mechanism therefore doesn’t rely on proof-of-work, therefore uses less energy than bitcoin, and so this Hedera shill is trying to tarnish bitcoin in an attempt to create interest in HBAR coin.
Web3 is complete nonsense from a technical perspective. It is Venture Capital backed affinity scamming that borrows the terminology of bitcoin and applies it to much hyped and likely worthless projects.
Web3 equates decentralization with good and claims that by ‘decentralizing’ rationally centralized activities such as cloud storage, social media hosting, or whatever, this new service is better than the web2 version.
This is nonsense.
Decentralization is slow and expensive. It’s not necessary for low value activities like social media, art, or file storage. As you would expect, trying to do these things on decentralized systems is actually very difficult, and so most web3 applications are decentralized in name only, requiring expensive servers in data centers to provide even a modicum of performance for the current low level of adoption of these apps.
So what is the real purpose of web3? It’s to create tokens that are actually unregistered securities, hype up the applications associated with the tokens via VC media campaigns, and then dump the tokens at the first opportunity on retail participants who read articles like the one above.
TLDR: Gehrig Kunz works for a company that issued an unregistered security and misrepresents the qualities of bitcoin to promote worthless web3 financial products.
I don’t think this will ever succeed. It’s just not the way humans think and work. NFTs, Blockchains… this is all part of a NERDs world. Admittedly some people also got and get rich through it. But most people just don’t care. If not because it’s too technical, then because People want control and be controlled by someone. That’s how we are.
It just doesn’t seem to me that blockchains are scalable. Proof of work gets exponentially bigger with linear increases, giving power to those who can afford to put in teh most work. Proof of stake just consolidates everything back to the few more directly.
There is some promise in decentralizing things. But it should be using things like Bittorrent as a model. Bittorrent doesn’t try to store state. It doesn’t try to handle the actual interactions. It just democratizes the content.
I know this was raised already, but as someone unfamiliar with this channel (“The Overflow”) I think it should be made *much* more clear that this is paid content/advertising. I mistook this for an official stackoverflow post/position and was very confused.
As for the content itself… web3 hype parading as a reasonable middle ground.
As a long-time contributer to Stack Overflow I am disappointed to see this astroturfing on your blog.
Proof-of-Stake is something Ethereum have promised will come “next quarter” for six years now. This is just greenwashing.
The crypto ecosystem is a massive energy hog and polluter. It does not solve a problem that anyone have. The entire Ethereum distributed machine have less calculation power than a Raspberry Pi.
I’m not sure why the author brings in the VISA transaction rate in a discussion about decentrialized social media. Their transaction rate is sometimes used to criticize how slow it is to transfer bitcoin. But the article is not about finance, is it? At least it pretends to be about a decentralized web.
This seems more like paid promotion and it doesn’t address the critic to web3’s architecture
This article is marketing drivel and I am fairly shocked it was presented in the SO email as anything other than a paid promotion. It doesn’t even live up to its title as a “measured look” and is blatant in its efforts to downplay the issues and extol the reader to just give it shot. —> s/particularly rough edges/fundamental shortcomings/ <—
I'll stay subscribed at this point but this has really hurt the credibility of SO in my opinion. I will probably call this out on twitter because funny gaffes deserve attention
This really got to my mail inbox without the promotion tag so I expected it would be an unbiased article from SO, just to come and realize it’s from a worker of the Marketing department of a crypto company. A little disappointed to be honest.
The partner content tag indicates that it’s sponsored. We don’t really use the the promotions category/tag for anything.
> We don’t really use the the promotions category/tag for anything.
The emailed newsletter had a yellow “promotion” label on one of the four “from the blog” links – but not this one.
As Andrew said, this article was one of 4 usually sent with the weekly Overflow newsletter email but was not tagged “promotion” despite the content frankly being marketing spiel.
>We don’t really use the the promotions category/tag for anything.
Except for labeling content that is a promotion or essentially marketing in the newsletter? Why even label anything as promotion/marketing in the newsletter then.
> The promise for Web3 is a user-led internet that isn’t as easily manipulated or controlled by centralized parties.
That was the promise of Web 1 as well. It got superseded by Web 2.0 (the modern Internet) because that’s a promise that never ever ever works out. Adding “but on a blockchain this time” isn’t going to solve that, because blockchains have never solved any problems except how to more easily commit crimes and get away with it.
I think it is far too glib to say “Web2 has been dominated by walled gardens” and leave it at that. What is perhaps more interesting is why some previous attempts at decentralisation failed. I attended a talk at which Tim Berners-Lee was speaking about the Solid Pod idea (keep your personal stuff off of Facebook) to a seemingly uncomprehending general audience, when I really wanted to ask him a question about web provenance.
On interoperability, a critical requirement is open data standards of sufficient quality. I worked for a while on a course data standard which produced XCRI CAP. The idea being that educational institutions could publish their course data feeds in standardised XML on their own websites, to be harvested automatically by any aggregator site that wanted to. This made a lot of (decentralised) sense, but the take-up (in the UK) appears to have been quite limited. The technology was certainly mature enough, and I coded a lot of the XSLT transformations into various target media (HTML, PDF, even X3D for fun) myself. Part of the problem seemed to be that a lot of developers had the wrong skillset (too much JSON).
Anyway, I’d hate to see loot boxes and NFTs as the future. Perhaps what we really need is digital communism, not everybody buying stuff all the time. Are people’s heads really so mushed they cannot see this? Judging by Spielberg’s Ready Player One, maybe.
Seems like a lot of hype. As many others commenting here, appears to be a paid advert. Regarding the blockchain euphoria going around, I heard it explained as nothing more than a DB setting that allows only inserts.
Check this out: https://web3isgoinggreat.com/
This *really* should have had a “promotion” tag in the email. Not a good look.
That aside, the author is brave to link to https://web3isgoinggreat.com/ so early on: Anyone taking a look at that in passing might be forgiven for not returning to the article.
I did persist but I’m afraid I glazed over for a good portion of it (especially once it dawned that the author’s company is in crypto and was being pushed constantly). I don’t want to totally trash it because there’s some worthwhile high-level exploration of what might appeal (or not) to *devs* about blockchain/crypto, but as others above have said it did rather skirt over the serious (and well-deserved) image problem that infects “the space” (as the execrable bros on social media call it).
So far there are just not enough respected, mature, influential voices in technology that can speak the benefits and potential of the technologies to the dev audience while acknowledging the *serious* risks and educating end-users on how to engage with its existing offerings with the requisite caution and appropriate cynicism. In time hopefully that will change and the technology will find its niche based on what is actually useful and what users are comfortable with (because it doesn’t go around fleecing them for many zeroes of currency on a whim).
Personally the point about having some truly inviolable digital property/identity does appeal, but we all need to be clear-eyed that such ultimate freedom/agency comes with commensurate ultimate responsibility … to start with, responsibility to be smart and not lose your shirt.
I’ll limit myself to just three items:
> The ethos and benefit of this movement is decentralization. It reduces the power, control, and limits of a centralized entity. … [M]iners have centralized Bitcoin with five mining groups taking up the majority of hash rate. Some argue VCs have already centralized Ethereum, with many projects seeing billions of dollars of traditional Silicon Valley investments.
Nobody should be surprised that the dream of true decentralization hasn’t come to pass. Crypto is designed to increase the power and wealth of the people who created it and got in on the ground floor. This will always be true, no matter how many new blockchains arise. The creators and people who get in on the ground floor will become _de facto_ centralized controllers. This has already happened with Ethereum, where a scam burned some of the most powerful whales and they forced a fork in the chain. Now there are actually _two_ Ethereums! (The one colloquially called “Ethereum” is the cowardly fork. The original chain is ethically more honest, at least.)
And anyway, people actually _want_ and _need_ centralized authorities, at least for some critical applications. And that definitely includes finance. Look at all the appeals, lawsuits, etc. from people who lost their NFTs to scams, frauds, or just outright theft. Apparently, “decentralization” and “distrust of central authorities” is all fine and dandy … until actual rubber hits actual road.
> Ethereum, the second largest network in terms of market cap, are moving to proof of stake, which requires only that the validator hold a number of tokens and therefore be directly affected by malicious transactions. This will reduce energy consumption for these transactions by over 90%.
This claim has been made for _years._ If Ethereum was actually serious about change, it would have happened by now. We need to stop believing it will be happening _at all_. let alone “soon”. This claim is a tactic to rebut legitimate concerns that even the author of this piece agrees are legitimate. Until Ethereum walks the walk, it shouldn’t be trusted. It hasn’t proven to be trustworthy.
> Distributed ledgers are intended to keep track of the most important and critical data, such as your account balance and identity credentials. Data that we, ideally, wouldn’t want a single centralized entity to control the entire landscape of.
At the very least, this claim requires a massive asterisk and extended footnote. We absolutely _do not_ want our “most important and critical data” to be in a public ledger that cannot expunge mistakes.
* There’s nothing stopping bad actors from appending transactions that can have dire consequences for actual humans affected by that transaction.
* People—and the algorithms, systems, and bureaucracies created by them—make mistakes. The inability to correct a mistake permanently appended to a blockchain can have dire consequences with little recourse for correction.
* I absolutely do not want my finances on the public blockchain. Nor my health records. Nor my…. It’s provably easy to correlate supposedly anonymized data on the blockchain to the actual humans involved. There’s no practical way to keep sensitive data private once it’s on the public blockchain. Say goodbye to HIPPA….