The Web3 Fraud

Nicholas Weaver:

The technical underpinnings are so terrible that it is clear they exist only to hype the underlying cryptocurrencies. The actual utility of these "decentralized" systems is already available in modern distributed systems in ways that are several orders of magnitude more efficient and more capable. [...]

So what does the supposed "web3" add to this vision? The cryptocurrency web3 starts with all our existing infrastructure. So I still need a DNS name, I still need a server, I still need storage, and I still have a distributed computation occurring between the browser and the server. So already I haven't removed any of the gatekeepers from the conventional distributed system, showing the claims of gatekeeper-free decentralization are false.

Web3 is only about adding an additional layer of complexity in the name of justifying the underlying cryptocurrencies. The web browser is augmented with a cryptocurrency wallet and part of the computation and storage is shifted from my server to the decentralized cryptocurrency infrastructure. [...]

So why this hype? Because the cryptocurrency space, at heart, is simply a giant ponzi scheme where the only way early participants make money is if there are further suckers entering the space. The only "utility" for a cryptocurrency (outside criminal transactions and financial frauds) is what someone else will pay for it and anything to pretend a possible real-word utility exists to help find new suckers.

After all, a programmer doing the most basic test of a web3 prototype is going to need to get the cryptocurrency, spend the cryptocurrency, and any application will require all users to get the cryptocurrency as well. If this gets abandoned quickly due to the inevitable technical failure "web3" still accomplished its goal of getting more suckers in and extracting their money.

So in the end web3 is a con job, a technological edifice that is beyond useless as anyone who attempts to deploy a real application will quickly discover.

Of course, Mozilla says, "Decentralized web technology continues to be an important area for us to explore."

Previously, previously, previously, previously, previously, previously, previously, previously, previously.

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17 Responses:

  1. Jonny says:

    I remember back in the early 2010s when I had some hope that crypto currency would be bring about at least some good things; granted, that was also when I still thought the web in general might bring people together. A crypto currency that someone in a nation like Zimbabwe or Venezuela could use to get around massive inflation and unstable currencies, or safely send back remittances with fewer charges would be good things, right? Obviously, my limited imagination is far too benevolent.

    Bitcoin absolutely sucks at the two things I was hoping it would be good for back in my naïve days. It turns out that Bitcoin is however an excellent way to laundry money and pay ransoms. In fact, at this point, I think Bitcoin might not actually be a Ponzi scheme. Bitcoin might actually have real value that is worth tens of thousands of dollars per Bitcoin. Unfortunately, that "real value" appears to be that it is super useful for paying ransoms, bribery, and laundering money.

    • Dude says:

      Bitcoin, circa mid-'70s:

    • Jon says:

      "I think Bitcoin might not actually be a Ponzi scheme....Unfortunately, that "real value" appears to be that it is super useful for paying ransoms, bribery, and laundering money."

      I think it's still a Ponzi scheme for the folks who look at it as an "investment". However, the folks who use it as a currency for the purposes you list don't want bitcoin to be "crime money", so they need a lot of ordinary transactions occurring so their own transactions have a veneer of legitimacy & get lost in the noise. It serves their purposes to have as many people as possible trying to get in on the Ponzi scheme.

      • Big says:

        > However, the folks who use it as a currency for the purposes you list don't want bitcoin to be "crime money", so they need a lot of ordinary transactions occurring so their own transactions have a veneer of legitimacy & get lost in the noise.

        Sadly, this seems to be coming true of cash as well… “What do you mean you don’t want to pay with your credit card or phone? What are you, a drug dealer?”

        • tfb says:

          I suppose the advantage of crypto'currencies' over cash for criminals is that it can be moved around and stored easily: you don't need to pay money mules to carry suitcases of cash around for you.

      • tobias says:

        Charles Ponzi, for all his failings, was not the root cause an ecological disaster.

        Pyramids, halvings & upward difficulty adjustments, and proof of waste though... seem to have a little more in common.

  2. Eric says:

    Yeah, the biggest lie about the so-called "decentralized" internet becomes obvious once you realize it requires public onramp servers. Who exactly runs these servers? What logs are they keeping? Which government agency(ies) are tapping them? And if you have an answer to any of these questions, why the hell should I believe you?

  3. Elton Jones says:

    The reference to DNS is ironic given that one of the few interesting applications of crypto, if it were actually implemented in popular browsers, is for alternatives to DNS. There have been numerous problems in recent years where the american empire has stolen domain names for Iranian and anti-ISIS news websites- forcing the rulers of the empire to try and make ISPs de-peer would be a great escalation in exposing the nature of the enemy.

  4. Martin says:

    The brilliant Web3 Is Going Just Great uses a tag of 'Rug Pull' for a good number of posts.

    I think it's telling that everyone involved in Web3 would know what this means, because the whole 'space' is so full of cons and grifts that they need phrases to distinguish the various types.

  5. tomt says:

    Moxie published a great write up just yesterday: My first impressions of web3

    My take is this: most current web3 tech is poorly designed and most of the devs must be just happy to get it working at all. There’s no time nor know-how for even basic security/privacy features that the industry has been adopting over the past decade. At the end trust is still (or even more) required and just shifts from one set of players to another.

    To quote moxie:

    One of the surprising things to me about web3, despite being built on “crypto,” is how little cryptography seems to be involved!

    Just take a look who’s backing some of the more recent web3 ventures to understand how “decentralized” things really are.

    • jwz says:

      WHAT.

      I'm old enough to remember nine months ago when Signal torched absolutely all of its remaining credibility by building their own pump-and-dump crypto scam directly into the app.

      To quote Moxie:

      Despite considering myself a cryptographer, I have not found myself particularly drawn to “crypto.”

      Come get your boy:

      Marlinspike began working with MobileCoin as a technical advisor in August of 2017. Marlinspike is joined by Joshua Goldbard, a general partner at hedge fund Crypto Lotus and MobileCoin technologist, and Shane Glynn, legal counsel, to help the company navigate the choppy waters of cryptocurrency regulation.

      So yeah, you can miss me with his hot takes on how crypto might be bad actually. He can start by putting his money where his mouth is and undoing the real damage he's already caused.

  6. Lanius says:

    I was looking into web3 recently since it’s half of tech Twitter I see. I asked myself a question what is the actual utility to that, and found no good answer. A guide on how to learn this was like… learn some full stack web development, create shit coin (no joke), mint an NFT, create Ethereum NFT marketplace… Still no real utility here, lol.

  7. jwz says:

    Bodil, all her apes gone:

    People who are otherwise intelligent keep talking about "web3" like it's this new thing in need of serious analysis or even attention instead of an old bullshit marketing term recently repurposed by bitcoin bros and I feel like I'm losing my mind.

    "Web 2.0 was such and such and web3 is such and such and" no, stop it, "Web 2.0" was a bullshit term coined by SV tech bros to self-describe their bullshit industry with a flattering term and "web3" used to be a handful of idealists trying to make the semantic web happen.

    In very real terms, as anyone who lived through that era will recall, "Web 2.0" was also the CSS border-radius property.

  8. jwz says:

    jefposk:

    Let me see if I have this straight:

    web1: capitalized HTML tags
    web2: CSS border-radius
    web3: pyramid schemes

  9. Dude says:

    ...and then this happened:

    (via Protocol: "Bored Ape Yacht Club NFT theft shows the ease of hacking crypto"

    Though maybe my using that cartoon isn't fair. After all, a bank robber (unlike a crypto-miner) would actually be after something tangible and valuable.

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