The web3 concept that is slowly congealing is an interesting inversion of web 2.0. Back then the idea was "build social websites and figure out the money part later." Today it's "build money stuff and figure out some non-speculative use for it later."

There are three non-fraud foundational problems with "web3": 1. No way to reference anything in the real world (oracle problem) 2. Immutable code makes any smart contract its own bug bounty. 3. Everything breaks (more) unless expensive distributed systems are run in perpetuity.

You can't write this off as idiotic because there may be serendipitous discoveries waiting, just like happened with the web 2.0 hype. But the money element is new and quite toxic. It's a set of legos where every lego is also an unregulated casino, ponzi scheme, and ransomware kit

I've called these trustless systems string theory for programmers because the details of making them work are intellectual catnip, even as the concept as a whole drifts further from any connection to reality. And it's all a huge sink for innovation we could use in the OG web.

There's a poorly articulated sense of "decentralization = freedom" that drives this culture, as well as the familiar Year Zero mentality of silicon valley that enjoys reinventing human relationships from first principles and moving them into code. And there's oceans of real money

That last part existed before—the incentive with "web 2.0" was to extract money through compelling storytelling to investors. But it was limited to a set of players (startups and investors) in a way the web3 project, which demands full access to the civilian economy, is not.

The real villains to focus on right now are companies like Coinbase and Stripe that are trying to make this connection happen, with one leg in the regulated financial system and one leg in the cesspit of blockchain. They should be regulated into a fine pink mist.

If there is value in the decade plus of experimentation with blockchains (and I'm bending over backwards here to try to see it) then it will find a way to break through without this Niagara of real money investment. We'll see at least one application that is not self-referential

Meanwhile, we also have to hack away at the situation that makes decentralized trustless architectures so emotionally appealing to a rising generation of young programmers—an entirely centralized web in the hands of the untrustable.

For people sufficiently technical to appreciate the deep stupidity of the blockchain, the feeling is like repeating the nightmare of the last decade of politics in the western democracies—why is this obviously ridiculous, unworkable, and toxic set of ideas so hard to discredit?

literally i think this every second. it feels like im experiencing the birth of capitalism all over again and now i understand how such a fucking terrible economic system is standard.

i mean it mega-sucks cuz its an extra-shitty meta-layer of capitalism on top of the already awful capitalism we haven't fixed yet

Capitalism at its heart is just a modest economic lifehack, but lately it's taken on a new meaning of "everything wrong with the world". But capitalism is in fact great; it brought us the cronut.

Which, ironically, is written entirely in lowercase.

can't afford a shift key, sorry dawg, thems the breaks

exceptionalism + greed ?

because lots of very loud and obnoxious people are making money from it, far as i can tell

“It is difficult to get a man to understand something when his salary depends on his not understanding it”. Doesn’t matter how ridiculous, unworkable, and toxic something is. If it means the *possibility* of lots of easy money, people will flock to it.

It's much deeper than that, I think - low-trust societies in general, and people growing up with a sense that you can't trust anyone else, everybody is malicious unless proven otherwise. It's not a coincidence that blockchains are especially popular in eg. the US...

This is the pertinent point for me, I tried to be much more open minded about it 6 months ago but there’s still zero useful things coming out of the ecosystem. If it disappeared other than the hit to some people’s wealth nobody would notice.

Is this the new Year of the Linux desktop?

Which could be collected and sold, in a web4 maneuver!

the ol' regulatory triple-tap

Not to mention a widespread misunderstanding of what decentralization actually *means* (it's socioeconomic and political, not technical) -- leading to swathes of developers not even realizing that their web3 jank isn't actually any more decentralized than existing web tech.

Like, basically everything short of the domain name system was already decentralized! BGP, open protocols like HTTP, hyperlinks for christ's sake! They were all designed as decentralized technology from the start. It was never technical constraints that led to the centralization!

It's an especially interesting definition of “decentralized” moving from the globally-decentralized web to much tighter coupling to more expensive systems generally controlled by just a few major players.

And yet, DeFi has just under $100B of assets locked in contracts running on Ethereum. I don't know if any progress was ever made on string theory. And following your comparison, I don't know how one could claim that DeFi, even in its current primitive form, is not progress

Ohhh right: String Theory is the Bloated MVP of science

Sure I can write it off. I'm ready to write it off right now.

Regarding the oracle problem, do you not think @chainlink has a chance at solving it?

Isn't that entirely dependent on the quality of sources they can get?

(2) is a feature.

For black hats?

It means that the participants in a system bear the costs of flaws in that system. Legacy institutions externalize the cost of security failures - it's borne by the people whose private information is leaked, not the institutions themselves absent lawsuits.

That's still the case with these, as far as I can tell. What recourse do you have with whatever party created the smart contract for you that had a critical flaw?

Usually, the party that created the smart contract has a large amount (everything) to lose if there's a flaw in their contract.

Their business might fold if it's a big enough problem across their customer base, but I imagine that's cold comfort for the victims.

The alternative today is that after 5 years, you get an award of $2 and a subscription to an identity-theft-monitoring service as the result of a class-action lawsuit. I'm not sure how that's much more comfort than seeing the company go under.

While there are scenarios where you often don't get everything that you need there are scenarios where you do and at a minimum, there is a chance of restitution. With immutable, self-reliant contracts there is none.

Sure; on the other hand, it's much easier to perform accurate risk assessment when you can (either personally or by proxy) audit the code of the contracts you choose to interact with. Trying to do that with a centralized institution is hopeless.

I wouldn't put as much faith in auditing as you do. Remember we live in a world where binary search in one of the most popular computer textbooks (a 15 line algorithm) was broken for 20+ years.

Fair point.

I don't think audits give you certainty. But I also don't think that we should regard the present arrangement of our financial institutions with anything but the greatest skepticism - I think that regulatory capture and self-dealing are rampant; those externalities matter.

I agree with you, but as a *user* the financial system protects me in a way that these architectures don't. The "decentralized" model relies just as much on trusted entities, except ones that don't have any of the institutional machinery around them and are run by mountebanks.

And this doesn't even touch on the security of the contract interpreters or Ethereum virtual machine implementations... 😱

Those don’t have a great attack surface, given that the whole network has to validate a transaction, and there are multiple VM implementations that would all have to share the same vulnerabilities for that sort of attack to work.

Not the *whole* network, right? It's important that no VM or implementation like geth becomes a de-facto standard. And hopefully there's no vulnerability in the spec.

I think both ways are fundamentally hopeless, which is why it's important for there to be other entities (like the state) to support transactions.

Agree. For security, is like open source on steroids.

“Immutable code makes any smart contact its own bug bounty” very insightful, thank you

There's an even more basic problem than that, which is that trustless systems are always slower, less reliable, and more expensive than centralized ones. So centralized systems outcompete in any application that isn't illegal. Or is that just #3 again?

This is it, for me. The web3 has a clear political motivation, but for those who don't care about it, not only doesn't add anything that doesn't exist in the current standard but in fact is a (way) worse solution for almost all the possible applications

has a decent shot at solving the oracle problem by capturing the item’s physical structure and linking it to a database or a ledger. All you need is a smartphone camera.

solves the oracle problem by bridging crypto identity to real world identity via a valid legal structure and insured attestations. The other two are issues.

That's not a solution, since it obviates the decentralized/trustless design of everything else. At that point you can just skip the blockchain theater entirely.

Do you see this as a positive or negative evolution?

Think it's more like "run away with money and let the fools speculative on the story of a future use case".

I don't think big companies like Stripe will "run away with the money" perse, but it really does feel like a *forced* push to web3 whereas Web 2.0 was ironically a more decentralized and organic shift.

Stripe is owned by the usual VC suspects so yes they will by definition run away with the money.

That's not who owns or runs Stripe.

I don't think your analysis makes enough room for the true believers, including the people at Stripe. That's what I keep trying to wrap my brain around because they're not criminals or fools.

I think there are certainly people who suspend disbelief because they can make money off the true believers by building casinos for them.

I think there are smart people who think this is a transitional stage to some fresh new utopia, and I want to understand that vision more. The utopians are always far scarier than the grifters or opportunists.

I've had cryptocurrency fanatics tell me that it will work in the long term *because* it is a religion. I instantly thought of some sort of Stross/Lovecraft god of dark finance, with tendrils inside the minds of its adherents. They thought this was a good thing, of course.

Even intelligent folks are not completely resistant to narratives. Humans are wired to form beliefs and then invest their identities in their belief systems. It just so happens that crypto has the best story tellers at the moment.

The utopian true believer "financial chestburster" types are pretty much entirely understood as a synthesis of Cyphernomicon, LessWrong and Mises. They certainly exist(ed), but I'm not sure they really shape the narrative much anymore.

I'm usually great at looking at a new technology and coming up with cool new things that it will let me build. "web3" has me completely defeated - maybe I'm lacking the imagination, but I think it's more that the new things it enables fail spectacularly to align with my interests

I've seen a lot of bubbles come and go in our field too, and there's usually a kernel of something real left behind after deflation. With this I truly don't see anything but gambling, crime, or at best a reg-arb'd poor simulacrum of what already exists in traditional banking.🤷‍♂️

At least I could use WebVan to order something tasty that'd actually show up at my condo.

WebVan was such an obviously good idea which just happened to be over a decade too early

I used WebVan a lot over its short life-span. It was great.

IMHO, the good idea wasn't WebVan, but rather grocery delivery. I don't think WebVan's "let's build fancy warehouses and a fleet of our own trucks in this low margin business" would ever fly. Grocery delivery on the blockchain? *That's* an idea!

With hindsight the right model was to team up with existing supermarket chains so you don't need to solve the warehouse side of it - but the product itself was a win, just not the model behind it

I imagine going to a supermarket chain with that partnership proposal in 1998 would have met with fear of competition or blank stares at best though

Yeah, that's definitely possible. I'll also grant that their inventory systems may not have been up to the challenge at the time as well.

I agree with Simon's big point here that in the late 90's bubble, everyone could agree on the eventual outcome (you'd be able to order everything online) and it was just the path to get there first and at a profit that was unclear.

I worked for a dot-com in London in 1999/2000 and no-one really had the slightest idea how to build working web software (except that it definitely involved Oracle) so I wouldn't be surprised if WebVan's internal systems were a disaster

(That's actually unfair on the team I was working with - we shipped a working CMS-backed website and e-commerce store and a full blown multiplayer gaming service despite no-one knowing how to do those things! Pretty damn impressive with hindsight)

Multiplayer gaming on top of that is especially impressive!

That was Wireplay, BT's dial-up modem online gaming service - I went to work for them just after they were acquired by the dot-com, we ran servers for Quake 3 and Half-Life and a bunch of mods, including very early Counter-Strike

That is indeed cool. 105ms latency (as reported in Wikipedia there) seems quite good for that era!

56.6k modems! Then the really competitive players started getting ISDN The sysadmins for the servers were occasionally known to show up with a 1ms ping because they had a direct connection!

I had my own little gig in 1999/2000 and built a tiny, unsuccessful web store in Zope(!). It was wild, because I had a drop shipping deal with a company and my store software would literally fax them orders.

Automated fax orders is an A+ hack

I think Ocado was able to successfully pull off that model in Britain. It partnered with its Waitrose supermarket initially but I thought it delivered from its own warehouses. Britain is a much more compact country though.

There are a lot of people in this particular “industry” who reached a point in their careers as engineers where they thought they were quite smart, but instead of learning they were just beginning, they suddenly became unbelievably wealthy, and lost a crucial growth opportunity.

So there are probably compelling use cases for this tech (some of it), but there are also a lot of people who aren’t malicious, but aren’t self aware enough to realize that their momentary wealth isn’t a measure of their wisdom or experience.

I' d say there's a blind trust in free markets behind this. I was reading recently this interview with Tim May, one of the founders of the cypherpunks list, and he was so disappointed that their ideas had only lead to get rich quick schemes and not an anarchocapitalist utopia.

Their anarchocapitalist utopia is kind of a hellscape though. The Cyphernomicon is full of terrible things like murdermarts and private militias etc.

It’s fair to say that the smart people who push crypto share a strong libertarian streak. Anything that might escape the clutches of government is worth pursuing to them.

Is web3 communism?

I'm not anybody special, but I'm happy to talk about my personal view of why these developments are important, interesting, and ultimately valuable. DMs are open, and I've written a good bit about what I'm personally trying to achieve at aftok.com/guide-foundati…

Is the more to it than decentralization == freedom tho? All Utopian ideas get into Underpants Gnome territory, this one seems to also get fuzzier than the rest on the end result but I think thats because of something else you said re: first principles rather than real outcomed.

They’re not criminals or fools, they’re people who got a taste of wealth from a bubble and got hooked

It's worrying seeing such an instrumental company for doing business on the internet involved in this.

it's an unprecedented sales opportunity for fiserv concerns... you have an entire new (unregulated, intangible and potentially higher margin) asset class to sell products and services around and it's actually _in demand_ at the moment.

At a certain level, when it gets too big to fail (which it has), it becomes a "legitimate" business opportunity even if all the of the fundamental claims are false. It's like the derivatives market without even the pretense of the underlying securities.

I don't see this working just mathematically, for it to legitimise it has to keep simulating generating a return. And it really can't beyond a certain point because it's entirely non-economic. I don't know where that wall is, but beyond that wall is collapse ... or bailouts.

Web 2.0 certainly felt a lot more grassroots and FOSS-y whereas Web 3.0 feels like it's being built by a select cadre of rich folk with clear conflicts of interest.

No. Web 2.0 was incredibly speculative. Nothing different, just some new players

Oh yeah! I'd completely forgotten all the people reinvesting their 401ks in jQuery and AJAX futures.

it's a whole new meaning to "technical debt"

I hoped something like activitypub would be the core of web3 and not something awful like the blockchain …

My god, you’re so good pinboard!

Your talents are wasted in the bookmarking industry.

you gotta do it in the meme format tho twitter.com/tylertringas/s…

Yes but hold on he has used an interesting GIF in his post, this must mean there is more to this?

Maybe we can beat them at their own game by selling them web 4.0 FHTs (Fungible Hype Tokens) until there’s no money left to invest in web 3.0.

Brilliant thread! 👏 Now I don't agree with some of it, but that's allowed in case anybody forgot. It would suit the crypto community to embrace well articulated and thought out criticism such as this, instead of the usual threats of poverty and being left behind.

Some #dweb folks are at work on needed applications, with no currency component. For example: @bluesky_commons is working on universal identity @mnmnotmail is building a safer email network

This. I even find some the revisionist history about Web 2.0 a bit hard to stomach too - framing the current social silos and app fragmentation as inevitable and desirable.

Building money stuff first is good. That way it is self-financing until it finds a killer use case

They are headed to DC to lobby for this crap.

oh noes, they do blockchain again!