Web3 Is Going Great, or Is It?

web3isgoinggreat.com is a pretty funny overview of the mishaps and shenanigans of the web3 / crypto scene and products. It shows just how much is going wrong in the world of crypto and web3. A large part of the issue is that the problem spaces is misunderstood by many who work on it, it’s a mismatch of skills and challenges. A lot of the misunderstanding is so vast it can only be called a category error.

So, back to web3isgoingreat.com. A few snippets on display just now as I looked at it, which I share mostly because they are hilarious and also showthe range and depth of the issues:

Solana goes down again: On April 30, NFT minting bots began flooding the Solana network with 4 million transactions per second, causing the network to lose consensus.

Popular NFT mint spikes Ethereum gas prices; OpenSea transaction fees exceed $3,500 ( …) However, some people oddly continued to buy and sell cheaper NFTs, including one person who bought a 0.1 ETH ($275) NFT and paid $3,850 in transaction fees.

Wikimedia Foundation stops accepting cryptocurrency donations. (…) However, it has made up a small portion of the non-profit’s donation revenue—they received only $130,000 worth of crypto donations in the last fiscal year, which made up 0.08% of their revenue.

Juno whale threatens to sue network validators if community confiscates his tokens. (…) The whale has repeatedly appealed to the community not to revoke his tokens, even trying to claim that the Juno developers had been secretly selling off $JUNO and damaging the community. Unfortunately for him, he didn’t succeed in swaying the community, who voted on April 29 to confiscate his tokens.

In just these 4 snippets above we see a resilience/security issue, a centralization issue, an issue of pure irrelevance, and a governance issue.

In technology, like elsewhere, it’s usually not a good idea to extrapolate from the state of affairs to the final outcome: Things don’t move in a linear fashion but pretty topsy-turvy. So things could still turn around, and get a lot better. I expect them to, in some areas; and to just disappear after desastrous failure in others.

But one thing seems exceedingly clear: While there’s potential (both upside and downside) of crypto / web3, this is nowhere near ready for prime time. Not in terms of tech, nor UX/design side, nor governance, nor resilience.

The crypto / web3 world seems like a speed run of the last few decades if not centuries, in which all lessons need to be learned, all mistakes made, again; no learning from the past. Web3 has a distinctly ahistorical feel to it. It attempts to exist outside the timeline of collective societal learning.

Or as Matt Levine summarized eloquently:

“the story of cryptocurrency is not one of re-learning all of the lessons of modern capitalism, but of un-learning them.”

Increasingly, I’m left with the impression that there are two problems with web3 happening simultaneously, two sides of one coin:

  1. We see a lot of engineers (mostly software engineers, but also financial engineers) bring their engineering approach to build solutions to problems that aren’t primarily technological in nature, but socio-technological issues. Socio-technological problems require a vastly different skillset to tackle than what engineers are trained in, they are the domain of humanities and social sciences. Because the problem space is misunderstood as a set of engineering challenges, any attempt as “solving” a problem creates more problems than it solves. It’s a mismatch of skills and challenge.
  2. On the other hand, these engineering skills aren’t brought to bear where they would be very useful, namely to solve engineering problems in areas that would benefit society.

So we have sunk costs on one side, and opportunity costs on the other. And in the process, because systems are built that fail to solve the misunderstood problems, we see a lot of legacy debt build up in the process.

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