I am that type of person who ends up detesting everything that is fashionable or promoted with special zeal by multinationals. It is a defect, since it is just as harmful to be interested only in what is popular, as it is to deny it for the simple fact of being popular, but I have not yet managed to amend it. For this reason, the constant bombardment of cryptocurrency advertising, the inspiring videos of kids who get rich out of nowhere by investing in them or the gurus on Twitter who talk about how wonderful web3 is cause me, above any other sensation, rejection and laziness.
“Why is this man so interested in me getting rich by investing in I don't know what cryptocurrency?” or “Why is this millionaire so obsessed with defending the decentralization of the web?” These are the questions I always ask myself. The answer in my mind is clear: money. However, for the last few months I have been following with interest how this “revolution” is developing to understand why individuals clearly more capable than I am are so obsessed with blockchain, cryptocurrencies and NFTs.
The premise of web3 is clear and very easy to understand. Web1 was decentralized and based on open protocols such as email and communication between client and server; web2 centralized everything on platforms and services such as TikTok or Twitter and web3 will decentralize everything again while maintaining the advantages offered by the current Internet.
Back to the Internet of the nineties?
Web2 was born because users did not want, and do not want and will not want, to host their content on their own server. Who would record a video, and upload it to their server – on 24 hours a day – to show it to the Internet instead of recording an Instagram story? Yes, the content has ceased to belong to you and now depends on the management of a third party; but it is much more convenient. The convenient always wins, and not only in the technological field. On the other hand, no matter how passionate and swift a defender one may be of open protocols, it is undeniable that a closed platform evolves faster: it is easier to add a function in WhatsApp than in the IRC protocol. And users care very little how decentralized this or that application is, but what functions or with whom they can connect thanks to this or that.
Geocities in the nineties. Convenience made the data no longer belong to its users, and its access was centralized. However, the two pillars of web3 are decentralization and immutability.
Web3 is decentralized because the information resides in the block chain and is distributed between multiple servers, companies and people instead of being done on a server controlled by companies and local legislation; and it is immutable because what is written in the block chain cannot be edited or deleted, unlike what happens with the databases used in Internet applications and services.
Sounds good? The best of both worlds: decentralization and convenience. The problem is that in practice everything is much more centralized than the gurus and crypto-charlatans claim, and its inconvenience is becoming more evident and less excusable.
Applications on the web3
Let's begin to analyze the possible virtues of web3 by studying how an application would be developed on it right now.
Since the arrival of the smartphone, the entire Internet works in a world of servers and clients; and a client cannot be a server at the same time. However, in the blockchain, all operations are carried out through servers that function as a network of nodes and provide the service. Taking this into account, and that an application must be able to read and write on the block chain, the first problem appears: how to interact with it from a client? The solution soon appeared: APIs offered by external companies. These rent servers that run the necessary programs so that the client does not have to do so in exchange for a small price or your data.
Just as the transition from web1 to web2 began. It is not surprising. Throughout our history, we have collaborated and traded in pursuit of a mutual benefit: a car manufacturer does not have to also manufacture tires or a baker grind wheat.
This fact makes us glimpse the first problem: all information is decentralized and immutable, but, in practice, access to it is not. All interaction happens through the two or three companies that developers use to create their applications on the web3.
At least theoretically—web3 champions love to talk theory and sugarcoat practice—since the information doesn't belong to those platforms, users could switch API providers whenever they wanted. However, the same reasoning applies to web2 right now: any user is “free” to use Signal instead of WhatsApp, Mastodont instead of Twitter, or Ubuntu instead of Windows. However, as naive as it may be, we know that it is not entirely true and that there are many conditioning factors. But hey, this “just started”, say those who know about it, and I didn't want to rush to my conclusions. I had to learn more about web3 before making judgments about it because it's just as easy to criticize something you don't understand as stupid.
NFTs: property and art in web3
The blockchain, being a distributed and secure database that keeps a record of every transaction, allowed us to rethink digital property. For the first time, a set of bytes, always easily replicable on the Internet (a JPG or mp3 file, for example), could belong to a specific individual. That is where the idea of NFTs arose: unique digital files whose ownership is audited by the blockchain itself.
I was captivated by the idea. In the same way that photography resurrected and transformed painting, NFTs could revolutionize digital art. It is a way to transform bytes into canvases.
Digital artworks were soon being seen auctioned off for millions of dollars, and celebrities sporting monkey drawings on their Twitter avatars. These monkeys, which belong to a collection of 10,000 called Bored Ape Yacht Club, have become a status symbol and their value goes beyond their artistic value. Wearing one of these is the closest thing in the digital world to wearing your Rolex or Omega. NBA star Stephen Curry bought one of them for $180,000.
These drawings, the 'CryptoPunk', have become the profile image of numerous celebrities and businessmen; objects of desire and speculation in equal parts. The image itself is not usually stored within the block chain, since it would be very expensive, but the web address that leads to that file is stored. The problem is that there is no validation that the image you acquire is immutable (one of the premises of the block chain), because what is immutable is the URL. Therefore, anyone with access to that server could change the destination image for that web address. You may buy a jumpsuit and in a few years it will become a picture of a cat. Or worse, of course. One possible solution is the use of the Interplanetary File System (IPFS), which is a protocol for storing content on an addressable p2p network, but its adoption is not yet the norm.
This technical detail does not overshadow the benefit for photographers and digital artists to be able to auction their original works. It is a new and interesting form of digital patronage. But where are they auctioned? Again centralization arises, and the OpenSea auction house has already taken over almost the entire market. This company is the one that lists the NFTs for sale and their current auction price. It is also within your control that NFT will be displayed on your platform. Of each sale, obviously, they take a percentage; as it happens with eBay.
What I wonder is what is web3 for if it is going to be operated through platforms that work like any web2 company.
The case that best sums it up is that of a holder of several NFTs from the Bored Ape Yacht Club collection, who fell for a scam and was left without them, losing millions of dollars due to carelessness. Being an illicit transaction, in the opinion of OpenSea, the sale of these was suspended within the platform. In other words, the dogma of the block chain is broken in favor of operating like any society that punishes theft. But by doing this, it is admitted that the audit that the blockchain offers by itself is not enough, and that it does not matter how perfect the technology is when the weakest link in the security of any system is the persons.
The ideal and theoretical crypto world ends quickly when an image of a monkey is stolen from you because you do not understand well how what you promulgate works.
Obviously, the NFT trend is going to be taken advantage of by the web2 giants to maintain their privileged position: since last Thursday, Twitter has offered the possibility of displaying a verified NFT as an avatar; Facebook, for its part, even plans to create an internal market for these digital works of art. Decentralized files that are bought and sold on the usual centralized platforms. Yes, those that had to be killed with web3. To add insult to injury, Twitter uses the OpenSea API. It is somewhat more centralized than any web2 platform.
The discourse of the purchase and sale of NFTs is, moreover, focused almost exclusively on the potential gain from sales through speculation. More and more collections are launched, and more and more buyers appear hoping that the drawing of a dog, a cat or a lizard will increase its value exponentially.
Without that profit motive, which has boosted all investment and growth in the 'crypto' world, it is difficult to think that this art market would have taken off in such a way due to the supposed technological or social virtues that this one offers.
The more I studied about web3, the less I understood: the concept of NFTs seemed laudable, but, in practice, their trading and culture seem to be part of some comic sketch.
¿ And the currencies?
The same goes for cryptocurrencies. Everyone can invent what they want with the supposed economic or social purpose and the technology they want, but, in order to be successful and increase its value, it must be listed in an exchange house. What exchange houses are there? A few, but the main one is CoinBase. For a coin to be listed for exchange there is the equivalent of an initial public offering on WallStreet. The problem is that it is CoinBase, a private company backed by investment funds, that decides which coins are listed and which are not.
Jack Dorsey, founder of Twitter, is one of the biggest promoters of Bitcoin and is one of the the most critical public figures with the web3. This is one of the criticisms tacitly made by Jack Dorsey, founder of Twitter and promoter of bitcoin. Web3 is not decentralized because it is moved by the interests of investment funds, which have shares in exchange houses and, in turn, can promote some currencies or others.
Beyond the centralization that, once again, can be observed, it is striking how expensive, slow and irreversible transactions are in the crypto world. For example, in the Ethereum network, the one used to buy and sell NFTs, each change requires computational resources that must be compensated. Ethereum says that “Fees exist to help keep the network secure. By requiring a fee for each transaction executed within the network, we prevent malicious third parties from saturating the network.”
The popularity of Ethereum has caused the costs per transaction (gas they call it) to skyrocket, since gas space is limited per block. In practice, sending a tip to a migo is more expensive than the tip itself. Who would use PayPal to send ten dollars to a friend if the fee for it was eighty? But, of course, PayPal is not 'CryptoPal'.
Just take a look at the Tesla support website for payments using the Dodgecoin cryptocurrency, which is curiously one of the best for these tasks, to rethink many questions. In this we can find phrases such as “It is the buyer's responsibility to ensure that the funds are transferred to the Tesla wallet”; “You have a time to make the payment. If it expires, you will have to restart the entire process”; “The Dodgecoin network charges a fee every time a payment is issued. Check with your wallet provider for more information»; and the best of all: “If you make a mistake by sending an amount greater than the price of the product you purchase, the extra cannot be refunded.”
The utility of cryptocurrencies was this, that they were exchanged for goods and services. In practice, in addition to being a nuisance, it is more expensive, less secure and very tedious.
History repeats itself: revolution of many, benefit for a few
In addition to these three pillars analyzed, there are many other possible uses in web3 to transform the centralism of web2. The network, by belonging to its users, would benefit—again, in theory—each and every one of them according to their contribution. According to some Silicon Valley gurus, you should be paid to play, not the other way around. This technological anarchism that they preach so hard, and which may seem praiseworthy, is dismantled by its own weight as soon as it begins to be launched.
'Execution of Luis XVI'/Anonymous engraving “We are at the beginning” is an argument that no longer works or, in any case, serves to highlight the defects of web3. If everything is centralized at the beginning, what will happen when all the banks, multinationals and investment funds are inside?
Everything is centralized because it is more convenient for users and profitable for those looking to do business. The paradise of an anarchist digital world without a state or tyrants, where everyone gets what they give, doesn't even pass the first exam. The Old West is really cool until your belongings are stolen (an image of a monkey) or until you make a mistake when making a payment and you have no one to go to solve it.
Of course, the situation of the web we use is not idyllic. Users are trapped in digital fiefdoms governed by Google, Facebook or Amazon, but the solution does not lie in changing the 'tyrants' that govern it. Overthrowing some leaders to raise others to power will not benefit users, since in web3 everything is more tedious, insecure and inconvenient.
Those who are interested are the investment funds of Silicon Valley —the real promoters—, the mid-mornings who hope to get rich overnight without working or the artists who see a means of short-term profit without understanding the consequences that you may have after selling your art as a sole and exclusive object of speculation. Because an NFT is not being valued like a Dalí or a Velázquez, but like a Pokémon card.
Those who excuse the obvious flaws and problems generated by web3 remind me of the Marxists who claim that Marxism is great, but has been poorly implemented. If web3 succeeds, the Internet will not magically become a cyber paradise for all users, but for a few gentlemen in suits, ties and leather briefcases. Whenever leaders fall, others rise. And in every revolution, each one, after all, seeks their own benefit.
