I find it so difficult to understand why there isn't a greater focus on first-principle approach to the web3 discussion, and wonder if perhaps the reason is that few people can make a cogent argument for their pet project/coin/DAO/etc. on those principles.
All the inefficiencies aside (for now, although ultimately they'd need to be addressed), the notion that you can create a public ledger that can be trusted without a single centralized authority DOES seem like a really interesting innovation. Just go ask some of my family members who lived overseas under regimes of hyperinflation just how valuable the idea that you could have a currency that no one controls is.
But NBA TopShot? CNN clip ownerships? It seems to boggle my mind how that is related... AT ALL... to this potentially new property afforded by blockchains. Over centuries it seems we have evolved institutions, laws, etc., PRIMARILY to address this issue of trust. But rather than seeing web3 projects that seem to tackle issues where does institutions have failed, it seems everywhere I turn is just someone doing something that can be accomplished the good ol' fashion way but adding a crypto element to it because of the hype/FOMO/etc. I mean, take the topshop example... could the NBA really not have done that with just.... yknow... a database?!?!?
Even then I personally don't really see how this is useful in practice. Of course an immutable and verifiable ledger sounds interesting, but the problem is the connection to the real world. The moment I want to use this ledger to prove anything about the real world I need some kind of trusted authority again to enforce or validate my claim. And in that case a plain old database would work better.
Indeed. I've always wanted to know "Okay, so if we record real property ownership on a blockchain, and someone trespasses in my house, who do I call?"
If the answer is "the police", I'm not really sure what having the blockchain gets us, if anything at all. Recording changes at the county recorder is easy and cheap enough already, so what's the point?
Because existence of a trusted authority means that there's no need to shoulder the immense costs of full decentralization. The fact that you can call someone is the relevant point, not the details of who you call. Blockchain only makes sense to use if two parties (1) do not trust each other, (2) do not have some mutually trusted authority, and (3) have no set of N partially trusted authorities whose shared authority they would each trust. In any other circumstances, there exists a more efficient method to establish consensus.
In the case of calling the police, it establishes that there exists a trusted authority, breaking condition (2).
You need the centralisation for enforcement. And the centralised entity trusts other branches of itself, not the blockchain. The police and courts do call the county recorder if they need to establish whose ownership they're enforcing. If that centralised entity is corrupt enough to surreptitiously mutate records, immutable records that you've made arent much help
At best, the blockchain is superfluous, at worst misleading, since whilst the tangible benefits of ownership rests with what the county recorder says, you can sell notional claims to ownership of the property on blockchains to other people, potentially multiple other people all thinking their token on their blockchain is canonical. The priority of the enforcing agency is a much bigger issue for real world property rights than the mutation of records
>If that centralised entity is corrupt enough to surreptitiously mutate records, immutable records that you've made arent much help
This seems like the opposite of true to me; if they intend to mutate the records doesn't it become extremely helpful that the records are immutable? What am I missing?
I think the argument would be that formerly corrupt enforcement entities, or entities with no track record, would use a blockchain as proof of their commitment to impartial enforcement going forward. "We know you don't trust us, but here is a public record that you know we didn't manipulate, so if we are going to steal your land we have to do it openly."
That said, the same thing can be accomplished by outsourcing the public ledger to a third party with a reputation for trustworthiness. The same way that countries that cannot make a credible commitment to not devalue their money will often peg their currency to the dollar or the euro.
A blockchain might go part of the way to solving that problem, but as you say there are other solutions (any public database can be monitored for record changes if that trumps privacy concerns, and non-blockchain databases can be append only) and transfers of property ownership aren't necessarily consensual and compensated just because immutable public records are made of them. And if it's landowners rather than an untrustworthy oracle updating the database with records of land transactions you create a new class of problem (if you lose a private key is that land yours in perpetuity? Or is it someone else's in perpetuity if they steal your private key or exploit a bug in a related smart contract and won't give it back?)
Which is where trusted counterparties like the one you suggested are a much better bet than an untrustworthy party enforcing and administering a record and its exception handling, even if that record itself is immutable.
Because the concept of "ownership" doesn't really mean anything unless it can be enforced. What's the point of owning a house if you can't live in it because someone else is squatting in it?
Since there doesn't seem to be a way to decentralize the enforcement of real property ownership (as enforcement could involve violence, which the state has a monopoly on given our current social contracts), we're stuck with centralization in at least one component of the "ownership-enforcement" pair...
So then what's the point of decentralization at all?
These theories ineveitably boil down to "the group with the ability to maintain a monopoly on the use of violence wins", and then argues that group should be selected on the basis of payment rather than voting.
Yep, Nozick's conclusion is that the competition of different security providers would ultimately culminate in a monopoly taking hold and functioning as a minimal state. SEE: minarchy
That sounds like a horrible "might makes right" scenario. If everybody just hires their own goons then the actual enforcement lies in who has more guns/people to enforce whatever they want, not in magical internet points.
Eh, I see your point, but theorists of polycentric law seem to think that it's possible that most firm versus firm violence would be mitigated via reparatory payments and agreements. They'd be businesses after all.
FWIW, my impression is that enforcement per se doesn't matter, but it does matter what source of truth the enforcement authority looks at.
Somebody puts an entry on the blockchain that says they own my house. OK so what? Nobody cares. They can't get that enforced. If you want to make the sale "real" to the authorities, you have to enter it into the land registry - but now you have a coordination problem. Do we put it into the blockchain first (and hence you pay first) and then the land registry? Or vice versa? Either one requires trust. Hm, maybe we better involve a trusted third party like an escrow company... oh wait we just reinvented the existing system.
All of this is not dissimilar to people selling NFTs of someone else's art. And you'll see the same problems if/when they try to violate copyright on that basis.
If you could convince the relevant authorities that the blockchain was the system-of-record then you'd have something useful. But with all the problems of losing ownership, hacking, inability to recover defrauded assets, etc, what are the odds of that happening?
The dirty little secret (which is showing more and more) is that to build a real business/application/etc on blockchain you're almost certainly using a "node provider". It turns out that running these decentralized nodes and doing so at anything approaching the needs of a real business is really, really hard. This is why almost all real crypto applications (including Coinbase and Opensea!) use a handful of node provider(s) with the two biggest being:
For IPFS there's the Infura product and Pinata (which actually uses AWS).
While these may not be "crazy" valuations for the space it seems that many people and investors are aware that the utopian concept of everyone running their own node or whatever for access to/participation in these blockchains is more-or-less a pipe dream. You can check my comment history for examples of why these node providers are a necessity for anything other than toy blockchain use cases.
What's interesting about these providers is that (once again) you're trusting a single source. The blockchain isn't the blockchain - the blockchain is whatever your commercial and centralized node provider says it is. I have no reason not to trust them but the reality is not only are we back to centralized providers, we're back to inherently trusting them.
The gist of it is: if web3 is real and actually "takes over" companies like Alchemy and Infura are just the new AWS and GCP:
It's not that a small number of large node providers is a /good/ thing. But it's also incorrect to say that the result is the same as AWS or GCP, and it frustrates me to no end that the debate around this is so imprecise.
First, your apps API to one of those node providers is standardized and stateless. Switching to a different one could not be more simple: changing a url in your config file; there is basically no lock-in.
Second, running your own is by no means impossible. If you don't need an archive node, it is almost straightforward. It's certainly much easier than replacing all of your AWS dependencies.
Third, for simple apps, the interaction with the node can be entirely browser-side, so it can be users choice which provider is used. For complex stuff you need to write an indexer to create the state you need, which is actually a more interesting problem because it does often mean that the smart contracts themselves cannot be served by a static HTML page, ergo making your product a centralizing factor. This is essentially what the The Graph is trying to solve.
Fourth, there is another layer below all of this product-node interaction, that is more important - the nodes running the consensus. The nodes we are talking about here are just to access a copy of the state. There is value in consensus being spread over 20k nodes, even if all the web apps use Alchemy.
Fifth, "trust" is nuanced. You have to ask yourself what failure cases you want to address. What power does Alchemy have over the network or the ecosystem? The answer is not much.
Related to the nuance of debate: I spend my time working with blockchain and writing comments like these because I want web3/blockchain to be successful in some capacity. If I thought it was a joke I wouldn't spend as much time in the space as I do and I'd comment on these stories with some snarky reply or not at all.
That said there needs to be some perspective in between the "eat the world this is the greatest thing ever hype-beast pump pump pump echo chamber bubble" and "this is completely stupid, worthless, and will never be anything" camps in all things blockchain. Anyway...
With all due respect "...running your own is by no means impossible. If you don't need an archive node, it is almost straightforward." is classic HN. The fact that Alchemy and Infura alone have hundreds of thousands of customers up to and including arguably THE most prominent names in the blockchain space demonstrates just how far from reality and common use that statement is.
Alchemy isn't a $3.5B company because someone threw HTTPS load balancers in front of a few Ethereum nodes... First, having used Alchemy and Infura I've noticed clear differences in how they handle sync, state, etc. Alchemy prides itself on sync and state between individual nodes in their network - using the web3 API and calling latest (or pending) nonce appears to be extremely reliable when compared to others (as an example).
Infura, on the other hand, seems to be relying on their ITX ("Transactions") product to deal with the very real and extremely frustrating web3 API issues for actually getting transactions to happen reliably, with predictable gas fees, etc.
My application and use is currently very simple and I've encountered these issues - I'm certain there are larger practical differences between the node providers. Again Alchemy isn't a $3.5B company because they have no differentiators and no customer lock-in.
So far we have basic implementation quirks and higher level products to "just make transactions actually work" and "just make an NFT". You can count on there being many more on the way and you know what? Companies will be THRILLED to use them.
Is the average user (or even developer/company) going to run their own node? Definitely not. Is the average user of Metamask tweaking the node addresses? Does the average user know what any of this gibberish means? Definitely not. Metamask users are going to use whatever default node address it has. There are 13,000 Bitcoin nodes and roughly (at best) 10,000 Ethereum nodes. Coinbase (as one example) has 56 million users. Once again people are not making the decision to fire up their own node or in most cases even have their own wallet. For all the same reasons people aren't hosting their own e-mail server from a raspberry pi at their house. They get a Gmail address and move on with their lives.
When I've configured Metamask for Polygon (as an example) it isn't extremely clear and obvious which RPC node addresses are actually "official" or "authoritative" for a given network... I've been developing with Ethereum and Solidity for four years. I've run my own nodes. I've built applications to multiple providers, networks, etc. I had 200 Nvidia Pascal GPUs mining Ethereum. If I'm not clear on a lot of this developers and users entering the space don't have much of a chance. This aspect of the space is actually pretty terrifying.
Web3 is hyped as much as it is because people have realized the internet is essentially whatever a handful of large providers say it is. If we're not careful web3 will just end up being a significantly less user-friendly and ridiculously inefficient implementation of what we have today.
> The fact that Alchemy and Infura alone have hundreds of thousands of customers up to and including arguably THE most prominent names in the blockchain space demonstrates just how far from reality and common use that statement is.
I don't think it shows that! Running your own services, including say email/source control/infrastructure etc. used to be much more common; people started to pay the cloud not because it's super hard to run yourself, but merely because it's even easier to let someone handle it and focus on your own product.
I've also run my own nodes, but I still prefer to pay Alchemy.
However, I don't disagree with the thrust of your points.
There's at least one useful use case for me. I can convert my country's currency to USD pegged stablecoins (USDC, DAI) at nearly market rates through a centralized exchange (ex: Binance) before sending them to my crypto wallet. Then I'm able to generate yield on this amount through apps like AAVE, Curve, Uniwswap, etc.
This way I can hedge against the depreciation of my country's currency in an efficient way.
There are a lot of risks of course, to name a few: Stablecoins could suddenly lose their value; Dapps can be hacked and funds permanently lost;
For what it's worth I'm allocating a small portion of my "liquid" reserves in crypto (10%), only using stablished/audited dapps and avoiding Tether for reducing overall risk.
Now you are just moving the goalposts. Your gp comment asked - "Even then I personally don't really see how this is useful in practice." And your parent comment provided a legit answer. I have met people who transferred crypto to their home countries with unstable currencies and hyperinflation, which is then used by their families to procure stuff (on black market, of course).
> The moment I want to use this ledger to prove anything about the real world I need some kind of trusted authority again to enforce or validate my claim
The moment someone buys a cup of coffee with bitcoin using the lightning network, don't they perform a transaction involving the real world?
take plain old database, then add requirements 1) to be public, 2) not controlled by a single entity, 3) stored data is objectively consistent, and you basically get a blockchain
> Just go ask some of my family members who lived overseas under regimes of hyperinflation just how valuable the idea that you could have a currency that no one controls is.
They buy USD or EUR on the grey market. Buying BTC doesn't satisfy this use-case any better - except for remote transactions, for which only hawala is more efficient.
There's crypto and then there's crypto grifters. Most of these projects have a crypto "theme", they're not "crypto" themselves.
The central bank monetary policies of the past years have favored mindless investment, which allowed a flurry of projects to get outsized funding by sprinkling crypto pixie dust to get investments (just like so many did previously with "ML"). These 9-10 figure valuations don't bring them actual legitimacy from crypto people. This doesn't make them "crypto".
A custodian exchange trading cryptocoins is not crypto, a custodian wallet helping celebrities buy NFTs is not crypto, a seller of collectible cards on a centralized DB like Flow that you can eventually maybe transfer to an actual decentralized network is not crypto.
> These 9-10 figure valuations don't bring them actual legitimacy from crypto people.
A project having VC from makes me require a bit more validation of it's value add if anything. If a project is gaining steam on it's own account, it's much easier to believe it has some real world value. Convincing some deep pockets that your Decentralized ML Crypto Neural Net Bath Soap Dispenser is worth investing in doesn't seem too hard at the moment.
Not really, if you're being pedantic. Web 3.0 was used by Tim-Berners Lee to describe Semantic Web as it was meant to be "Web 2.0 + Semantic Web = Web 3.0", while Web3 (notice lack of space + lack of ".0") was coined by Ethereum (and Gavin Wood if I'm not mistaken) to describe it's client SDK/API for it's users.
Web 3.0 didn't go anywhere, and Web3 has now seemingly changed meaning from Ethereum API to whatever the word means now (which seems to be different depending on who you ask)
"Anywhere" is a bit harsh; Google (and seemingly other indexers) honor semantic markup in several contexts via https://schema.org/ -- I would bet that's a large contributor to the "Rich Result" cards that show up in the SERP for sites with such markup.
Separate from other "generic" semantic data markup concepts, JSON-LD[1] is also still making a showing, most commonly (in my experience) as `<script type="application/json+ld">`
So I guess it depends on whether "go anywhere" means "Amazon.com is fully HATEOAS serving RDF, or GTFO" but I would think the actual situation is that it just is taking a while for pointy-haired types to see market value in adopting those concepts, and not so much "what a failure"
And I don’t really care if any of it takes off. I have no interest in crypto or the politics surrounding all of this.
For me, it’s something new and interesting. It’s like the Wild West. It has some energy behind it.
Is most of it a scam? Sure. But will we learn anything from it? Hopefully. I think of it like Product Hunt. 99% of the projects will fail, but 100% of the people probably learned something useful.
I respect your healthy mentality, but if that’s the most interest you can muster, I think it demonstrates how little attention Web3 should be getting.
The original promise of the Internet and Web 2.0 had clear use cases, where you could understand and appreciate the improvements to every day life. There’s no denying that there were grifters there, and the whole thing got a little hot with dot com bubble. But, on the whole, the potential could be seen.
Just as calculators made lives better in the 70s and 80s, spreadsheet as well, there was a natural and relatable drive to incorporating more technology. I don’t see any of that with the web three.
Many people were about as blind to the internet then as they are to crypto now. If you Google news stories from then you get a lot of confused newscasters going "but what is internet?" Or people like Bill Gates trying with little success to explain it.[0]
In those early days where it was pretty much just irc and bbs's it was pretty hard to see any kind of value for most people.
I also remember a time when people would essentially complain about ".com" do you remember this? "Commercials. Billboards. Everybody has a dot com now!" That feels a bit like the complaining about Blockchain now to me and I tend to see it as a pretty good sign.
I don't actually know very much about blockchain / smart contract stuff. I've been digging into it lately because it seems like there could be something interesting there. If there is, I haven't really found it just yet.
It’s depressing, honestly. A few years ago I read a graduate textbook about Bitcoin as well as the original white paper and some papers about ethereum, etc. My main takeaway is that Bitcoin itself (although not all blockchain proposals) is a horrible medium for almost all useful products. The privacy properties are bad, it’s incredibly inefficient, and everyone ends up going to a middleman instead of interacting in a decentralized way as it is. Almost always, a regular database is what you want. The drumbeat of cries ‘let’s build X, but on a blockchain!’ rarely even make sense.
This is compounded by the fact that the people who promote Bitcoin the most in my personal circles are known to be experts in wishful thinking and outlandish claims about the world in general.
Having said that, smart contracts are actually really cool. In practice a bank is probably just as good in the developed world but — darn it, I want to make clever money programs too. Also, there are alt coins that have much better privacy preserving properties and superior (energy efficient) consensus algorithms so there are still reasons to be hyped. It’s just that most of the web3 stuff doesn’t seem to touch the actually interesting possibilities in favor of ‘go blockchain, Bitcoin to the moon!’
>In those early days where it was pretty much just irc and bbs's it was pretty hard to see any kind of value for most people.
I don't agree that it was hard to understand the value of services like electronic mail, forums or text chat. People may have been confused about how these services worked, or how they could personally use such services. But in a world where the best way to contact someone far away was an expensive telephone call, it was easy to spend two minutes talking to someone and have them understand the value of cheap, near-instant text-based communication.
It's really hard to explain the value of "web3" in a two minute conversation because almost everything it lets you do is either i) something most people don't actually want to do, or ii) something people can already do in a much easier and user-friendly way
I think a case can be made that Ticketmaster will be replaced (or replace itself) with blockchain tech that will eliminate scalpers. Visa and Mastercard will most likely be replaced or dramatically lower fees. Banks will be upended.
> I think a case can be made that Ticketmaster will be replaced (or replace itself) with blockchain tech that will eliminate scalpers.
Blockchain does not do too much to eliminate scalpers. One could easily make thousands of wallets, buy the tickets and then resell them. What stops scalpers is tickets tied to personal identity, and blockchain can't really tie wallets to personal identity without a central physical authority.
> Visa and Mastercard will most likely be replaced
Visa and Mastercard won't be replaced as long as cryptocurrencies do not provide fraud protection or chargebacks (that seems a little bit impossible given the irreversibility of crypto transactions) or credit lines that require less than 100% collateral.
To eliminate scalpers, I don't need to know who's behind a wallet, I just need to look at the wallet and see it's a first-time buyer from me (Ticketmaster) or the performer. Either way, it can go to towards the back of the line. Someone who buys lots of tickets (and I can see they don't re-sell them!) moves to the front of the line. Happy venues, happy fans, happy performers!
For Visa: Smart contracts that hold the money for 30 days and a real-world interface for customer service (new companies will be borth to offer this I bet) will mean lower fees.
Except for the fans that couldn’t get a ticket because it’s the first time they do and they go to the back of the line, or the ones that sold a ticket because they couldn’t attend and now they can’t buy tickets.
> Smart contracts that hold the money for 30 days and a real-world interface for customer service (new companies will be borth to offer this I bet) will mean lower fees.
Which means a 30-day payment lag for everyone and is far more prone to abuse if the client can unilaterally charge back any transaction. Also doesn’t help when credentials are stolen.
Ticketmaster - could be.
Visa? Hell no. I want to get my money back if someone steals my cc data. And I have gotten it back!
No such luck with crypto if I lose my private key.
No method for eliminating scalping is easier/better to implement on the blockchain, compared to a regular old centralized Not-Ticketmaster saas.
The most obvious/safe method is also the most cumbersome: Require name/DOB when buying the tickets, do not allow changing it, and check everyone’s ID at the gate.
Further, it is probably in the interest of both the performer and Ticketmaster to allow “safe” scalping (like Ticketmaster Resale).
(Fixing Ticketmaster with Web3 is like fixing DRM on Steam with NFT’s…)
> No method for eliminating scalping is easier/better to implement on the blockchain, compared to a regular old centralized Not-Ticketmaster saas.
I guess, except that it's centralized. So one can only build "reputation" with that one saas at a time. If I can show I'm a fan of XYZ band, any ticketing service can see that and treat me differently.
> I can think of very few transactions that I want permanent and signed and public. The fewer the better imo.
For sure. That's a problem with public blockchains that we'll wrestle with soon enough. They are presented as being more private when in fact they are more public, and certainly once some big exchange is compromised someday.
I think we'll see more from private currencies like Monero, since they're kind of what bitcoin was marketed as. Cheap, private digital currency.
> I think it demonstrates how little attention Web3 should be getting
Let people decide for themselves where to pay attention to? I remember "Internet" receiving a lot of hype in 1998 when most of the people didn't have any clue about what that actually entailed.
> The original promise of the Internet and Web 2.0 had clear use cases, where you could understand and appreciate the improvements to every day life
Hahaha, but no. Where I was in 1998, hardly anyone had any idea what Internet was about and yet there was a lot of hype. In the early days, I remember using it only for porn, random email forwards and chats. The way I use it now (searching for anything and everything, buying majority of the stuff I need, payments of all kinds, investments, ...) was unimagined.
> I don’t see any of that with the web three.
Have you ever considered that you could be wrong and that in a couple of decades, there might be something really interesting out of Crypto / Web3?
> The original promise of the Internet and Web 2.0 had clear use cases, where you could understand and appreciate the improvements to every day life.
How is an international currency (or currencies) allowing direct peer-to-peer transactions without the need of middlemen or central authorities not a clear use case with a potential to improve at least some people's everyday lives? What's more everyday than money?
Ethereum is switching off its mining in favor of another consensus system called "proof-of-stake." Basically the mining hardware and electricity are replaced by the currency itself. There's a consensus protocol that works if people don't cheat in certain ways, it's provable if someone cheats, and the "miners" lock some ETH into the system as a security bond. If someone submits a proof that you cheated then you lose your bond. Energy consumption will drop by an estimated 99.95%.
Most web3 stuff runs on Ethereum, which is the second-biggest energy consumer in crypto. Bitcoin is the biggest and has no plans to move to proof-of-stake, but isn't really involved in web3.
Ethereum's proof-of-stake protocol has been running in parallel for a year with billions of dollars in real ETH deposited, and for the merged system there's a multi-client testnet running.
We’ve been hearing this tune for several years now. Ethereum was originally planned to move to PoS in January 2020. That date was blown and many dates projected since have also been missed. Repeating this “the end is near!” argument in response to very valid concerns about the environmental impact is getting a bit old.
Yes, I expect to see these "dates have been missed before" comments up to the day it hits production.
There's a big difference between "we have a design worked out and think it will take this long" and "we've been running the new system in production for a year, merging it with the old system is relatively easy, and we've got all the clients running the merge together on a public test network." Historically, anything they've gotten to the point of a multi-client testnet has taken well under a year to go live.
It's been delayed before, but hopefully it happens this time. I don't own any, but it would be nice for GPU prices to normalize and the environmental cost would go down substantially.
I appreciate your honesty, but HN is not just about tech. We are humans first of all. If a new tech is used mostly to scam people, you can't be surprised most people here won't appreciate it, whether it's fresh or not.
Also, the aspect of novelty fades in time. XML was a novel thing back in the day, too. But scams do have real, negative consequences on people's lives.
Is blockchain-related projects actually "mostly" used to scam people though? When the internet first appeared, plenty of people made claims that the internet would just be used for crime and scams, but eventually came to realize the value of it, as the use-cases grew month by month.
What are the current use-cases that aren't scams? Except for currency, since I don't think that's what Web3 is trying to sell, and I think most are familiar with the value propositions of cryptocurrencies.
Same for me. I'm programming Web3 and Solidity contract interactions. It's just refreshing to have a new aspect (contracts and money) that you can easily interact with now.
I agree with the comments condemning the resource consumption. I also see big problems with the resulting loss of control over currencies that governments could face. I'm trying to be a part of this development because if it doesn't go away, these systems could be a defining part of the future. But if I'm honest, I'd like crypto in most of its current form to go away - it's very likely that it can damage democracies and we're currently already busy saving our democratic processes from social media, inequality and manipulation. Maybe crypto has a solution to these problems, but currently I'm not convinced. I've talked to founders of the biggest crypto currencies and the vision of most of them is highly anarchistic and idealistic (a DAO as a government replacement, taxes will be paid in a voluntary form or something like that) which makes me deeply sceptical. But maybe that's just me being uncomfortable that a multi-billionaire is explaining to me how he wants to change how the world is governed.
I don't get this, so you admit its a scam and a wild west, I'm sure you can work on something that's not a scam, has a wild west environment and get a descent pay. Why would you keep working at it?
I mean conceptually the idea is "money without intermediaries" which is quite fascinating. But when you stop and think about it for a sec you realize that we need intermediaries or else the richer will become unstoppable kings with control that cannot be deflated.
> But when you stop and think about it for a sec you realize that we need intermediaries or else the richer will become unstoppable kings with control that cannot be deflated.
I agree. This is something that I'm not sure people who go into crypto fully understand with the resulting consequences. The FED is basically printing money and I can understand people who don't agree with the inflationary mechanism that is built into fiat currencies - this is one of the main criticisms of the fiat system because it's debt-based.
On the other hand, having no means to get taxes (because of anonymous currencies like Monero and anonymous wallets) and having no control over the currency is a safe way to a plutocracy. Some would argue that we're already living in a plutocracy, but currently we have democratic ways to intercept (although we're currently not good at exercising that power). But if it's technologically impossible to intervene, there's not a lot of ways to fix this.
Why is there no way to get taxes? Taxes were collected throughout history, beginning with the earliest recorded history, when nothing was electronic. Cash still enables tax collecting.
Because you can't know how much the person really has (edit: and receives) with crypto. Historically, you could simply walk to their properties and look at their wealth and tax accordingly (like serfs getting taxed on their agricultural output based on the land size they worked with). Or you could look at their bank accounts or (like the Panama papers) find their off-shore accounts.
But now, they can hide enormous wealth in an untraceable way on many wallets. It's not entirely new - tax evasion is as old as taxes - but it's easier and accessible now for large wealth that was more difficult to hide in the past. If crypto stays legal, you can't control this aspect.
In practice crypto isn’t used much as a medium of exchange, though, and when you try to cash in your coins you will get nailed for any evasion or criminal behavior. It’s possible that buying things directly with crypto will become more widespread, but expect this to trigger more laws and reporting requirements so that your transactions can be taxed.
It's still very young. If crypto gets relevant adoption, it'll be impossible to discern legitimate transactions from illegitimate ones. If it's technologically impossible, you can have all the laws you want - you're not able to enforce them. People will have their official wallets for tax collection and their anonymous ones for everything else (and will do their main transactions with them).
> buying things directly with crypto will become more widespread
I'm expecting this to be the case if adoption happens.
This seems very optimistic to me. I’m reminded of the xkcd where the cryptography enthusiasts imagine that 4096-bit security will protect their secrets, but in reality no one bothers with that. If the government requires ID for crypto purchases, they can shut down businesses that don’t comply. Businesses will comply. The tax agency can audit you and see if you have nice stuff that’s not accounted for. If you have a significant source of income from unreported crypto, this will likely be evident in many ways — business relationships, web presence, letters in the mail. Very few people can actually turn into ghosts, even with crypto.
I know crypto millionaires that had to show their e-mails to the tax officers to show which addresses were used for getting paid. I really hope you're right.
We don’t tax wealth. When someone wants to use crypto to buy something real - like property - should be able to collect taxes then. Maybe tax authorities transition away from taxing trades and more towards taxing physical stuff.
> I mean conceptually the idea is "money without intermediaries"
Then what is Web3? Cryptocurrency has been a thing for a little while now, surely Web3 isn't just that but with a new name. I think the idea is that applications can in some way utilize the blockchain to form a new type of application for the web, but I've yet to see any useful application ideas that truly benefit from a blockchain.
An asset class similar to Gold - provably limited in supply and valued because everyone else values it. Also, much easier to transfer around the world unlike Gold.
The usefulness of web3/crypto/blockchain is said to be in decentralization.
However it is not the blockchain and crypto algorithm that enable decentralization.
It is not even the distributed ledger. We do not need these things to be able to make distributed services. What we need is standard public interfaces.
Take an example of NFTs. They are increasingly popular, even if they are meaningless tokens not representing ownership of physical item nor protecting against digital copies and distribution.
What makes NFTs useful is that any token can be manipulated by any wallet/marketplace/exchange. This is enabled by using a standard ERC-721 interface. The interface is simple and well-designed. The adoption of the interface is high in crypto-software.
Imagine all e-shops would implement the same public API for querying products, creating orders, calculating discounts and shipping prices and making payments. We would need no Amazon to be the largest e-commerce website. We would need no e-bay. Anyone would be able to make a product-selling website or one-off auction on they own or using a 3rd party service/hosting. And everyone would be able to use their preferred front-end. Aggregators and price comparators would be created, with no need for web scraping.
The orders do not need to be on public immutable ledger, nor the payments.
Every entity can implement the API on its own, host is on its own, but is not required to. Every entity can decide to use 3rd party implementation and/or hosting of the API. The same as with crypto tokens and smart contracts.
> Imagine all e-shops would implement the same public API
Very idealistic, but if you have ever heard the acronym "EDI" then it will become quickly apparent how incredibly fraught it is to try and map ones "local" taxonomy onto a "global standard" taxonomy. Let's just take https://schema.org/brand -- should this property be the legal brand (Sony Interactive Entertainment Inc.), the marketing brand (Sony), some URI that everyone agrees upon and can readily look up from their desktop?
What is the verification process a fivrr contractor can use at the end of their php work for Middleville Cakes and Cookies to know that the result conforms to the global taxonomy and thus will be consumed correctly by the aggregators and price comparison engines mentioned?
I do recognize this may have a tone of "pfft, what a terrible idea" but I promise I don't mean it in such a dismissive way. I was similarly thrilled back when I learned about the semantic web, too. But having been down in the muck for as long as I have, trying to implement loosey-goosey specifications, has made me realize it's not the idea that's flawed, it's the assumption that all actors have good intentions, perfect knowledge, and infinite time to conform to perfect standards.
And don't even get me wound up about the semantic law markup / legislation as code ...
> with no need for web scraping.
That will only ever be true in some mythical future where the HTML contains only presentation structure and is populated by the aforementioned public API. There are countless examples of some parts of the data being statically embedded in the HTML that are not part of the API response
I found really amusing to see people posting quite strong and definitive opinions about something that is still very vague and, for all intents and purposes, not set in stone. It could be all of that, of course— until is not.
It's a good example of pareidolia. Like seeing an elephant in a cloud. The moment you stop to comment on its features, it turns into a giraffe.
A lot of the web3 critiques make much the same points, but the writing style of this one (as if addressing a child) combined with the arrogance ("the cognitive dissonance will be too much") makes this one stand out.
If I may add some notes for future authors:
- You can be certain that the vast majority of web3 "thought leaders" you will argue with online have done quite well for themselves. Far from being prisoners in a pyramid scheme, they have cashed out more than they put in, and if they wanted to, they could cash out entirely, being unequivocally in the black. Frankly, it makes more sense to impugn the objectivity of the people who must feel they missed out. Just focus on your arguments.
- Maybe critics could approach the subject of decentralization with a little more depth than "someone is using a Discord so it's not decentralized so why do we need a blockchain". If you take NFTs specifically, I find it really surprising that it is hard to understand that trusting an artist when she says she created an NFT is not the same thing as having the database of NFTs managed by Artnet.
Hi thanks for the feedback! About my writing style in general: I usually write as if I'm writing to my younger self, telling him what I wished he learned faster. Perhaps I should be kinder to him. I'll be careful not to mean to others next time. However, I don't feel like we have to be nice to the 'web thought leaders' who have cashed in their tokens for real money already. They're the grifters. The stories from people making real money from selling crypto are to be found everywhere, but obvs that pyramid scheme/lottery situation means that lots of others lost their money. I hear too little from them.
I was genuinely pissed off about all the time I put in trying to read all that techno babble various blockchain websites only to find out that most of them are just a scheme to turn tokens into money. I'm disappointed in the tech community for not being more vocal against the hype. So I wanted to put out there what I learned, so that others can see things not through the lens of 'next big thing', but 'possibly made by someone who wants my money'.
Don't forget there are a lot of well-to-do devs here who just want to know what the technical details are. A lot of us are no longer in it for the money.
The author is basically calling out the proponents of "web3" to define it with RFC-level detail, something that I think would be tremendously beneficial to everyone in this debate.
I read that point about Discord differently:
One of the often stated advantages of blockchain technology lies in the ability to build decentralized and censorship-proof social platforms. And yet there doesn't seem to be such a platform, people still use Discord.
Plus, this wouldn't even make their argument any more valid: there are, sadly, today, still plenty of well-off big co's owners/shareholders that will tout capitalism in its current form is perfectly fine and the world is going fine and their strategy is making them richer, so why wouldn't anyone else join?
Yeah, the best way to get upvoted on Hacker News is to write a negative post about the future of crypto, it doesn't even have to be a good post, a badly written one like this will suffice.
The name is as ridiculous as the concept itself. Besides, after the so-called Web 2.0, there were many pretenders to the name of "Web3", such as the semantic web[0].
Yeah, it feels like wishful thinking to me. If you build it, they will come?
Semantic web is a great example of something that had great potential (I still think in subject-object-predicate triples when solving problems) but never really went anywhere big.
As to actually answer the question, since the sibling comment ignores the question you make: Web3 was/is the name of Ethereum client API SDKs, so was used by the Ethereum group. As for who coined it, I think it was Gavin Wood.
The reason that so many people use the same websites (like Google’s, Facebook’s, etc) is mainly because of the convenience these sites offer and the reach they can provide. If this is a problem, it’s not a technical problem, but an economic one. The big companies have more design and programming capacity to offer online services than individuals and non-profit open source projects do right now.
Is a lack of viable open source alternatives to Big Tech an economic problem only?
Consider how quickly the Web itself disrupted the centralized networks of the day: AOL, MSN, CompuServe, Prodigy, …
Consider how quickly VOIP collapsed the cost of telecommunications what the government for 50 years — with its regulations and breaking up monopolies — did not. Today we all take that for granted.
Yes, tech that eliminates gatekeepers (switchboard operators, anyone? magazines, newspapers, radio…) brings costs toward zero and enables far more wealth creation than “privately owned” networks and infra. It creates far more of a free market, too, for those who like free markets.
Web3 is far better than Web2 for all this. Does Blockchain suck for web scale things? Yes. But there are many other distributed systems. To me, “blockchain” isn’t essential to Web3. What is essential is “smart contracts” — or more generally — code that for the first time you can trust to do what it says. And who can vet it? A free market of worldwide experts that you can collectively trust.
Just as Web 2 allowed anyone to deploy an HTTP website and anyome in the world could interact with it, similarly Web 3 allows doing that with growing numbers of real world applications like this: https://intercoin.org/applications
Nothing really has surprised me more than how difficult it had been for a lot of you to understand what the value is here.
It is a database with a new property: data and rules for manipulating data can be fixed. Yes inefficient in iops but who cares - it allows a whole new class of activity.
I also struggle to understand how the users of HN don't see, what I think is to any thinking person, the clear advantages of values of blockchain systems.
Immutable ledgers with permanently recorded and inalterable activity make many issues with not only fiat currency desirable, but the applications into other areas are, quite honestly, limited only by the imagination of those who develop the technology further.
But in practice, what new applications does this actually unlock? When do you need to cut out the middleman to this extent? For serious transactions you typically want a reputable middleman who is licensed and insured and accountable to the justice system. Blockchain sounds good, except that now you lose all of those legal and financial guarantees and have to track everything yourself. And everything you do is probably now public, too.
I don’t think this is a failure of imagination as much as a sober awareness of the many problems with blockchain. I will say that some alt coins have much better privacy properties so hey, there could be more to all this in a few years.
> but the applications into other areas are, quite honestly, limited only by the imagination of those who develop the technology further.
Could you offer some examples? I keep seeing this as some kind of new frontier of functionality and yet not a single answer to anyone asking for useful applications built on blockchains that aren't currency.
Not just currency but pretty much all financial services. I have blockchain based assets and have used an Ethereum based service to borrow against them to help buy a house. Tokens are an almost unimaginably large and general concept and will be applied to many things (real work assets, stocks, loyalty programs, etc.) and provide much more flexibility for how they are used, distributed and exchanged.
DAOs are organizational structures that are built, generally, off of token based membership. This is also a huge landscape for social coordination.
A lot of this is just new, though. So explaining like this can only go so far and ultimately it must be experienced, like the original web in the 90s.
I don’t clearly see how it’s ground-breaking. Non-repudiation could be achieved long before blockchain, because we have cryptography and can sign stuff.
Agreed, this article highlights the important property (decentralized state) that programmable blockchain (web3/ethereum) provide and why that's needed to change the current power dynamics governing web activity.
HN has adopted a suicidal mindmeld on this issue. Can't be helped. The discussion will turn around when the first big platforms show up, but by then it'll be too late. HN is FUDing people out of the investment and retooling opportunity of their lifetime.
The criticisms of blockchain now will age just as well as criticism of the web. "Why do I need Amazon if I can just use the neighborhood bookstore?" sums up most criticisms here.
There you go. The blockchains that have utility and use-cases will survive once regulations arrive. Coins that have little use cases, memecoins, etc will wither away.
But of course, another article about Web3 and the anti-web 3 crowd continues to comment on it as if web3 is a nightmare come true.
Not related to the article itself, but would it kill the author’s site to have normal HTML scrolling and/or reader support? That was painful to scroll through.
Git is essentially web3 technology and was meant to be decentralized however, it all ended up being pretty centralized by a few players like GitHub. I envisage the same happening to ‘crypto’ type stuff like the use of exchanges, etc.
These arguments aren't very good. While I'm not interested in Web3 outside a couple of use cases, the arguments against in the article make it more appealing because now I want to find how to take a bet that the author is wrong.
The argument that blockchains and the associated protocols aren't decentralized reduces to anything happening between more than one counterparty is now defined as centralized, and that the correlation from co-ordinating their activities via a blockchain protocol means it's centralized. These are circular definitions.
The climate argument against proof of work using electricity ignores how demand for electricity creates the economics for green tech innovation that actually solve the carbon problem. The article is another example of rhetorically exploiting basic human energy needs as a crisis narrative in support of levering in more centralized governance.
As soon as we have viable geothermal and nuclear solutions, I'm pretty sure the climate people are going to move on from carbon and start militating against heat and entropy next. They don't want solutions, they just need an infinite conflict that they can be the managers of and gatekeepers to. Conflict is energy in politics, and so permanent revolution against some basic unresolvable conflict is a source of political justification to organize people against something. The nebulous, unsolvable crisis is the perpetual motion machine of political organizing, and it is as much of a fraud as a purported physical one. If you think cryptocurrency people are cynical grifters, may I introduce you to political activists. Their "narrative" is just a fancy euphemism for conspiring to lie.
Whether it's useful to point this out or not, the quiet part of Web3 is it is clearly an "exit" from the hegemonic internet (hegemonet?), and they're inventing peaceful technological alternatives to what was essentially a managerialist putsch, co-opting, and occupation of the internet. The criticism in the article seems like just another vehicle for standard complaints and ingroup concern signalling.
>Blockchains don’t solve the problems they’re supposed to solve. They do cause new problems though. There’s a huge negative climate impact associated with it. The miners buy so much hardware that it’s been affecting the availability of graphics cards for years now. It makes grifters rich. Just to name a few.
The real objection to web3 reduces to the same old tropes about the wrong kind of people becoming financially independent and not having to be accountable to the narratives of political hucksters. Web3 is at the peak of it's hype cycle, so there isn't much to defend about it, but arguments like these against it seem like a straw man for the same old tropes.
I'm in that slice of the population that is captivated by the potential of crypto while disgusted by everything that it currently is.
I would like to see more discussions around the theoretical limits of the value of web3 with regards to computing efficiency. Even the world's most efficient public blockchain would see a huge replication factor if it saw widespread adoption. The problem is, the larger the replication factor, the larger the inherent cost of compute, as limited by the energy it costs to replicate that compute.
In other words, if AWS Lambda is priced at X% premium over the electricity consumed executing code, even the world's most efficient blockchain would be priced hundreds of times that premium if the blockchain is widely adopted/replicated; there is no free lunch, so if you have a distributed system replicating data across thousands of machines, then the people bidding to put data on those machines are paying for that replication.
In other words, the pricing of running your application backend on a popular blockchain (say, Ethereum) will never ever be as cheap as running your application backend on a public cloud. In a broader sense, this means that the only data that shows up on a public chain is data considered "valuable", such as recording the transactions of cryptocurrency or NFTs or other pyramidal investments; never something silly and worthless, like a system for recording nontradable in-game achievement system.
On the other hand, not every blockchain is popular. My belief is that IF web3 has a future, it will involve inter-chain protocols between many cooperative blockchains, and that compute will go into a chain that fits the value of the compute.
For example, suppose I want to make an app that uses a microtransaction scheme on the order of pennies, e.g. you can tip 1 penny to an author or something like that. I'm obviously not using Ethereum because a transaction on Ethereum costs vastly more than 1 penny to record. However, a smaller chain with a replication factor of say 10 machines can probably handle 1 penny transactions with far less than a penny fee.
Right now, there's no good way to treat blockchains themselves as fungible compute objects that are secured & priced based on their replication factor. Just as you wouldn't move a single penny on Ethereum, you also wouldn't move a million dollars in tokenized assets on a chain with only a few machines replicating. I think making an ecosystem of fungible blockchains, with the ability to easily transfer funds inter-chain[0], is going to be the next evolution of web3 that actually enables real consumer application backends to be hosted on the crypto universe.
[0] This is something that's being worked on in a limited sense, e.g. the "Wormhole" project that allows you to tokenize and move assets between Ethereum and Solana and a few others
You might think it is, after all it says “token” in it. But you’ll find, if you actually read it, that there is no token to buy, and it’s mostly about how to get the Web out from digitalism feudalism and to a free market.
It discusses in detail the mechanisms by which digital content creators like video producers, artists, open source software developers (many of whom disrupted by the web, such as journalists) can monetize their work without using the government to go after copyright infringers.
You think Web 2.0 wasn’t based on grift? It was based on WORSE than grift: VCs bought SHARES in the companies, then sold them to the public (sometimes after propping up bad unit economics and money-losing business models for years). The public (wall street investors) proceeded to demand that company management extract rents forever.
Web 2.0 has led to some of the most centralized sites, we all have our public forums on privately owned sites like Facebook, Twitter and LinkedIn, while our shopping and transactions are done on privately owned sites too. Actually they’re owned by “the public”, but they can’t vote Zuck out (they try every year) and anyway, Wall Street earnings demand that these sites NEVER give away their back end, NEVER decentralize it.
At least with Web3, the code is open source and everything is decentralized. Compare Vitalik and Zuck. Vitalik doesnt need bodyguards, he isn’t essential to Ethereum’s operation. Is Ethereum dog-slow and expensive because it is built on blockchain? You betcha. Is blockchain a bad backend for most “web scale” things? YES. But crytocurrency and other types distributed systems (involving DHTs) are not. Look at BitTorrent, or FileCoin, or Holochain… but these are just babysteps. MaidSAFE is the next generation for files, and hopefully what we’re building at Intercoin is next-gen for actual transactions.
Now that I have established that selling tokens may be better than shares (because founders only make money on the first sale and then the network should belong to the participants) I am wondering if it’s okay to post this for more information on what is ACTUALLY wrong with Web3:
Again, I ask, where is the grift? We spent four years on this project so far. We barely raised any money (certainly compared to Telegram and Kik Messenger or EOS, but even compared to your average Web2 centralized web app startup.)
We worked our butts off because we are passionate about a world where any community, github, website ir other project can release and manage their own cryptocurrency. We not only built the tech and user interfaces, but we met all the top people in the distributed space (including TimBL, Leslie Lamport) and made a forum and youtube channel where we explain smart contracts, interview people like Noam Chomsky, regulators, community currency economists. What more can we do with the tiny budget we have?
So if we were to fund this project adequately, how would you recommend doing it? The VC + Web2 way of closed source backends and extreme centralization? We all see how well that turned out…
Perhaps one day, we can live in a world where people have UBI and contribute to projects because they choose to, not because they are forced to survive and feed their family with no safety net. At Intercoin we are looking to build that world. But the only way UBI can be phased in everywhere, is if the communities pay it in their own currency. Hence the project.
All the inefficiencies aside (for now, although ultimately they'd need to be addressed), the notion that you can create a public ledger that can be trusted without a single centralized authority DOES seem like a really interesting innovation. Just go ask some of my family members who lived overseas under regimes of hyperinflation just how valuable the idea that you could have a currency that no one controls is.
But NBA TopShot? CNN clip ownerships? It seems to boggle my mind how that is related... AT ALL... to this potentially new property afforded by blockchains. Over centuries it seems we have evolved institutions, laws, etc., PRIMARILY to address this issue of trust. But rather than seeing web3 projects that seem to tackle issues where does institutions have failed, it seems everywhere I turn is just someone doing something that can be accomplished the good ol' fashion way but adding a crypto element to it because of the hype/FOMO/etc. I mean, take the topshop example... could the NBA really not have done that with just.... yknow... a database?!?!?