The title of this article, if anything, is being as mild about Web3 as I can possibly be. It is worth less than nothing — the world would be better off without it.
This articles goes into why that is, and is split into two sections: historical reasons, and technical reasons. There is of course some overlap among them.
The primary purpose and function of Web3, as illustrated in the above image, is to enable greater fool theory scams, crime and money laundering in broad daylight.
For a much more detailed article about cryptocurrencies and NFTs specifically, you can find it below (it’s a 50 min read).
Why NFTs are bad: the long version
This is the in-depth follow up to this brief article:
Table of Contents
· What is Web3?
· Fully decentralised systems have never worked
· Historical reasons and examples
· Technical reasons
∘ Decentralised blockchains are never democratic
∘ Only grossly incompetent, or malicious, developers advocate for Web3
What is Web3?
Originally, Web3 referred to the Semantic Web (written as Web 3.0), which is a completely and utterly different concept to the meaning of “Web3” in common use on the internet today.
At the moment, “Web3” instead refers to an idea of the internet based around decentralised blockchains, whose main uses so far are limited to cryptocurrency and NFTs. The definition of this “Web3”, according to Wikipedia:
The sheer number of huge, fatal flaws in this concept is massive — but there is one flaw that stands out the most among them.
Fully decentralised systems have never worked
There has never in history been a single time in which a fully decentralised system has worked for anything. This is for a very simple reason: if the system fails, you need a failsafe. A decentralised system that has failed can’t be relied upon to fix itself, because if it could do that, it would never have been able to fail in the first place; it has failed precisely because it no longer knows how to discern truth from falsehood.
Therefore, if you implement a failsafe, it is always going to be a centralised failsafe. In mechanical and technological systems, the failsafe is a switch or other mechanism a person can use to forcibly override the rest of the system, sometimes the person themselves. In other kinds of decentralised systems, such as governments or markets, the failsafes are laws and regulation.
Historical reasons and examples
Decentralised government is equivalent to a democracy in which no ‘government’ exists, but the people as a whole make the laws and decide on them. What did this lead to in the past? Mob rule. The people — in every country — are on the whole not well equipped to know how to run a country, and many have prejudices and biases, frequently caused by a lack of education making them vulnerable to propaganda, a lack of diversity, or both. On top of that, people — of all kinds — often vote for their own agendas, frequently resulting in a tragedy of the commons.
This is not to say the people are at fault. It is to say that leaving the people to govern themselves has never been a good idea, which is one of the primary reasons countries decided to have elections and vote a smaller number of people into a centralised “government”, whose policies would be carried out by a competent civil service.
For a rather dark example of the dangers of decentralised systems in engineering, I will point you to the horrific accidents that happened on two Boeing 737 MAX aircraft in 2019 and 2020.
Both planes crashed, causing the deaths of all 346 people on board those aircraft. The crashes were both caused by a faulty safety system known as MCAS; one of this system’s functions was that in the event that the aircraft seemed to be flying with too high an angle of attack, it would correct the aircraft’s path by forcing the aircraft’s nose down, i.e. making it fly at a lower angle.
In such aircraft systems, the pilots are meant to be the failsafe. Overriding MCAS, in this case, meant forcibly pulling back on the aeroplane’s control column (yoke). A serious flaw in the MCAS software meant that it didn’t disable itself upon the pilot overriding it by pulling back the control column; as a result, when MCAS detected what it believed to be a problem, it would engage the pilot in an endless tug-of-war, in which the pilot would pull back the control column to override MCAS and it would immediately begin pushing the plane down again.
In this specific case, the failsafe was unable to act, due to faulty software. As a result, for both aeroplanes the pilots were battling aeroplanes determined to fly downwards incorrectly, and it was not possible for them to correct the course due to the software’s faulty implementation allowing it to override the pilots.
Imagine if the planes were fully decentralised; if the software detected bad flying incorrectly, the pilots would be powerless to stop the plane crashing every time. We’d have a lot more than two plane accidents if that were to be the system in use on all aeroplanes. A smaller version of the same problem exists for driverless cars.
In modern countries, a truly astronomical amount of law exists to regulate markets: what businesses can do, what they can’t do, and who has the power to force them to change if they break these laws. We have this because letting them do whatever they wanted in the past — letting markets be decentralised — has always been an absolute disaster.
Businesses, without exception, always act in their own best interests; after all, it’s why they are created — to make money. As a result, businesses often used predatory pricing, formed cartels, bid rigging to win contracts for work, price fixing to prevent customers finding better deals elsewhere — the list of such practices is almost endless. If you’d like to read more about them, you can read Wikipedia’s article on the history of competition law. They still happen to some extent today, but on a far smaller scale than they once did.
There are also almost endless examples of businesses abusing the absence of such centralised regulation. The Onion Futures Act of 1958 was brought in after two onion traders, Sam Seigel and Vincent Kosuga, cornered the onion market and made huge profits, at the expense of Americans for whom there were subsequently shortages of onions in many states, and particularly for onion farmers, many of whom went into bankruptcy due to Seigel and Kosuga’s actions. The law is still in effect to this day.
The Dodd-Frank Act was passed in 2010 — narrowly — to more strongly regulate the financial sector after the 2007–2009 credit crisis. It was unfortunately partly repealed in 2018 by Republican support during Donald Trump’s presidency.
On top of abusing their position, not having centralised regulation results in companies making unsafe, fraudulent, or coercive products. A plethora of regulations and laws apply to most electronics products to make sure they meet safety standards, do not short circuit or catch fire, to ensure they are sufficiently energy efficient, to ensure their waterproof ratings are accurate — another near-endless list. The same applies to most products you can buy; in the past, food was often unsafe and expensive, furniture could be made from easily flammable materials, and so on. Without centralised authority to regulate, businesses will sell consumers absolutely anything they can get away with — and consumers often could not tell if a product was faulty, or by the time they could, it was too late.
Decentralised blockchains are never democratic
Decentralised blockchains, by their very nature, are not even close to democratic. For example, blockchains using proof-of-work consensus sytems allow those with lots of hardware to have far more votes than anyone else. Proof-of-stake consensus systems allow those with lots of money to have more votes than anyone else. Delegated proof-of-stake systems allow those with lots of money to vote in the validators who will control what is and is not allowed on the blockchain, a very similar problem to normal proof of stake.
In real-world democratic systems, elections are tightly regulated. The identity of people who are eligible to vote is checked; those who vote in person or by mail are checked to ensure they did not vote twice, and election stations are set up across a country to tally votes and allow people to make their vote heard.
This regulation of real-world democratic systems costs money. The price of allowing each person an equal, fair vote is that it’s expensive: elections cost huge amounts of money, with estimates from MIT approximating $1bn for American elections, £150m per year for British elections, and so on. This is because avoiding election fraud and ensuring everyone has an easy and equal access to vote are not economically profitable choices; they’re done for fairness, not profit.
The only way to stop elections costing money is to stop having to check who votes; even online elections don’t stop you having to check that. Blockchains do this because they don’t care who votes, only how much hardware or how much money they control. You can’t limit who is allowed to vote, or how many votes a person has, because the blockchain’s consensus system has no way to know or verify any of that. The result is that it is all too easy for small groups of people with massive voting power, such as those who control vast amounts of hardware or money, to control such a system. Decentralised systems only work if you want an anonymous oligarchy.
It doesn’t matter at all what system you create; no decentralised system can ever be democratic unless it allows equal votes, and it can’t do that without checking the identity of each voter is unique. Good luck designing a way to do that without a central authority; it’s literally impossible.
Only grossly incompetent, or malicious, developers advocate for Web3
The reason I’ve made this a section is important: the only developers who advocate for Web3 are either hopelessly incompetent to the point of being incapable of development (a minority) or competent and malicious (a majority).
There is no reason, on technical grounds, to believe that Web3 is even remotely plausible or useful. In order to think it can be viable, you would first have to believe that you can develop software or systems that cannot fail. I, and anyone with a brain, can speak for software as a whole in saying that isn’t possible; it should be obvious, whether you have any knowledge of software or not.
Web3’s entire foundation is that somehow, decentralised systems can work and not require centralised failsafes (once you have a centralised failsafe, it’s no longer a decentralised system). There are so far zero examples in history of this for a good reason: it can’t be done.
At some point, your decentralised system is unable to reach consensus on what is happening, or has decided an incorrect version of events is valid. It is no longer capable of knowing that it is wrong, and thus you need something outside of the decentralised system to step in and correct it without needing the decentralised system’s approval or consensus — a centralised system.
You can find some more of the malice powering Web3 by going here.
I would call Web3 a bad joke, but that would be trivialising how damaging and malevolent it is.
It is one of the worst ‘innovations’ that has ever been proposed; its only value is to criminals and fraudsters, most of whom are fully aware of its lack of uses in any other category.