Elon Musk and Jack Dorsey are right to raise concerns about Web3
They’re not buying the sales pitch
A bridge to sell you?
Web3 is a nebulous concept with varied definitions — which is one factor spurring the cynicism.
Some advocates envision a democratized internet that harks back to the halcyon days of cyberspace. With blockchain as its backbone, Web3 will give people — rather than corporations — control of data, digital assets, apps, and platforms.
That’s the idea, anyway. Yet critics — including Musk — dispute Web3’s very existence.
In response to a video comparing the early internet with a future iteration,Musk tweetedthat Web3 “seems more marketing buzzword than reality right now.”
He soon aimed another broadside at the concept: “Has anyone seen Web3? I can’t find it.”
Musk’s cynicism has sturdy foundations. Engineers have questioned whether blockchain can provide the spine for a global internet. Theypoint toenormous hurdles around scalability, control, and adoption that must be overcome.
Among the most prominent cynics is Stephen Diehl, a developer and blogger. Like Musk, Diehl distrusts the hype around Web3.He arguesthat the only problem it needs to solve is how to rationalize its existence:
Who owns Web3?
While Musk questioned the very existence of Web3, Dorsey’s concerns focused on who controls it.
“You don’t own ‘Web3.’ The VCs [venture capitalists] and their LPs [limited partners] do,” he tweeted. “It will never escape their incentives. It’s ultimately a centralized entity with a different label.”
His comments were criticized as stifling the push for a decentralized internet — but the former Twitter CEO wasn’t done yet.
When Musk asked about the whereabouts of Web3, Dorsey provided a withering reply: “It’s somewhere between a and z.”
His response was a reference toa16z, a venture capital firm that’s heavily backed Web3. In response,Chris Dixon, a general partner ata16z, said VCs “actually own very little of it,” but that didn’t allay Dorsey’s concerns about ownership of a future internet.
Dorsey’s not the only person who’s flagged the influence of investors. Diehl has warned that Web3’s being “pushedby the world’s largest investors who havedeep bags of tokens to dump.”
These remarks reflect wider concerns around the control of cryptocurrencies. A recent study found thatjust 0.01%of Bitcoin holders control 27% of the currency in circulation, which has escalated doubts about crypto’s democratizing potential.
Decentralizing the web
Dorsey has beendescribedas part of a tech elite creating the next iteration of the internet, but says he has “nothing to do with ‘Web3’.”He arguesthat news outlets merely use his name to generate clicks (obviously, we at TNW would never dream of doing such a thing).
Yet his criticism of Web3 doesn’t mean he’s shunning decentralized online services.
On the contrary, Dorsey is an avid supporter of crypto, runs a digital payments company called Block, andbacked a projectto “develop an open and decentralized standard for social media”.
Musk also hasa long — and controversial— history of championing decentralized finance.
Critics may argue that their comments about Web3 are ill-informed or self-motivated, but there are valid reasons to interrogate the hype.
Story byThomas Macaulay
Thomas is a senior reporter at TNW. He covers European tech, with a focus on AI, cybersecurity, and government policy.Thomas is a senior reporter at TNW. He covers European tech, with a focus on AI, cybersecurity, and government policy.
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