Web3/Crypto: Why Bother? | Hacker News Reader

Web3/Crypto: Why Bother?

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233 pointsfandorin548 comments

It’s weird that this article waffles on about PCs and how the author thinks that’s a good analogy. It’s not very convincing because you could easily pick another technology pair and show it the other way (often worse is just worse).

But the thing that really seems weird is that all you need to do make it interesting is 1) define what you mean by web3 (it’s a slippery weasel word that changes meaning whenever the people using it needs it to) 2) define a few uses that are obviously better than the alternatives and justify them without hand waving (including explaining why what would appear to be fundamental show stopping flaws are not in fact that)

If you can’t do that (and no one seems to be able to) the maybe, just maybe, it is bullshit?

Me I d define web3 by referencing the websocket arrival that evolved from Ajax polling to have better data subscription and the rise of full js frameworks which transformed the amount of work clients do on web resources that sometimes couldnt be done by the backend (drawing a financial graph full of beautiful indicator and refreshing live for instance).

I can understand web4 could be self financing unstoppable web resources with no central authority able to close them but I dont see yet a proper use case beyond criminal endeavour. Plus, we're far from it, we'd need an organic transmission network that goes out of the traditional ISP system, like a global bluetooth peer to peer mobile network every phone contributes to in exchange for payment... that would be fast enough...

Criminal endeavours are not equal. Some are trading drugs and murdering people, others are overthrowing authoritarian dictators like Putin or Lukashenko.

As you can imagine, the latter activity is criminal in Russia and Belarus.

Trading drugs is not equal to murdering people. For many, the only access to life-enabling medicine such as medicinal cannabis is buying it illegally.

That depends on drugs. If you hook people on highly addictive expensive drug with severe withdrawal symptoms, like heroin, it naturally spawns more crime, because addicts would resort to anything to get the next doze: theft, robbery, prostitution, murder, etc.

People hook themselves up, not other people, who may help do so, but the person taking drugs is the one responsible.

I think you misunderstand how this works in reality. Nobody walks to a shady oerson standing near the corner and says, "hi, I'm joe, today i want to try this meth stuff I've been hearing about, how much for a dose?" When a person is in a vulnerable state, there is always a 'friend' who offers first dose for free, and says, that it is ok and totally safe to try a few times. Consequences come later when it is too late.

Opioids are added to less addictive drugs to make the customer more regular and thus drive more profit. It's never smart business to kill your customer but it's also not smart business to have a customer that only texts once every few months.

Of those three things “crypto” is ok for trading drugs, not very good for murdering people (not for lack of people trying but luckily it seems like death prediction markets and dark web assassins aren’t really a thing), and not at all useful for overthrowing dictators. It’s absolutely fantastic for dictators who want evade sanctions and continue enriching themselves.

It is absolutely critically useful for overthrowing dictators. Currently that's the only sure way for Russian citizens to fund anti-Putin opposition without immediate consequences.

Source: I'm from Russia.

I’m absolutely sure that Putin and his cronies will find enough use for crypto (avoiding sanctions, carrying out criminal enterprise) that they’ll be more than happy about this minor inconvenience.

You are missing the point. Putin and his cronies will find ways to do their criminal business with or without cryptocurrencies. His opponents have little other choice BUT cryptocurrencies to fund their operations.

Ukrainian politicians hold a lot of Bitcoin.

If you are in Russia, is it wise to call Putin a dictator on a public forum?

I think that going to anti-Putin rallies and getting detained by the police thugs is even less wise. But a dutiful citizen has no choice.

You can be from Russia without being in it

How many dictators have been overthrown thanks to bitcoin? I guess none.

Dictators are overthrown at a rate of fewer than one in three years (maybe even lower), and Bitcoin has entered the public consciousness no earlier than in 2017. Give it some time.

> Currently that's the only sure way for Russian citizens to fund anti-Putin opposition without immediate consequences.

This seems like incredibly irresponsible advice: if you're worried about consequences for a political donation, leaving a signed public confession is the police's dream come true. Compromise someone's computer and you now have proof of a crime as well as something you can use to pressure everyone they transacted with, even if you had no idea to investigate them at the time it happened.

Best of all, nobody knows if that's happened unless you tell them so you can continue to quietly map out the opposition network and pressure each person you link to a Bitcoin transaction to identify their partners but otherwise stay quiet.

When I studied at University 15 years ago web 2.0 was in full swing and the academics where busy talking about web 3.0 which was at the time understood as "the semantic web".

Web 2.0 was never a thing. It was just a vague term some people came up with so they’d have something to say in their magazine articles/blog posts. There is no Web 2.0 or in fact web2.

Web 3.0 I have a soft spot for. It was a stupid name and the ideas didn’t really work but the semantic web people had their hearts in the right place.

BS. Web 2.0 was the conjunction, refinement and broader availability of several different web-related technologies, notably JavaScript and AJAX, among other things. They enabled an interaction model for web stuff that was impossible with earlier versions of the web.

Nobody said "web2", indeed, but that doesn't invalidate that Web 2.0 described a very distinct and substantial evolution of what is possible in the browser.

I though Web 2.0 was all about missing vowels in names.

Rounded corners actually

Don't forget the 3D glossy buttons...

Wikipedia, OpenStreetMaps, DuckDuckGo would all be great examples of self-financing unstoppable web resources with no central authority distributed across a peer-peer mesh network.

Unclear if the value prop is large enough to overcome the activation energy of such an endeavor.

DuckDuckGo - is a private company. The other 2 are non profits.

When you use one too many buzzwords you let on that you don't know what they mean.

None of those resources operate peer to peer, none of them operate in anything resembling a mesh network. DDG is absolutely stoppable and centralized.

Not that I don't love all those projects and all of those qualities.

Wikipedia and OpenStreetMaps absolutely have central authorities and are not peer-to-peer or distributed on a mesh network. If they shut down you could probably access their data from an archive, but that does not mean that they are decentralized.

DuckDuckGo is even more centralized since it uses the index of one of the largest search engines (bing), is not at all self-financing, is not at all unstoppable (if the central authority was shut down any replacement would need to access bing's result) and is not at all peer-to-peer.

Either you don't actually know what those terms mean or you don't know how those websites function.

Ok, since there is clearly a trend my comment was too focused on responding to the grandparent and lacked enough context for all readers. Let some amend it to:

> Wikipedia, OpenStreetMaps, [WebSearch] would all be great examples of [potentially operating as] self-financing unstoppable web resources with no central authority distributed across a peer-peer mesh network.

> Unclear if the value prop is large enough to overcome the activation energy of such an endeavor [to convert these currently centralized services into an entity like what the grandparent describes].

on top of that decentralized part is already the web itself is pretty much it

No. If you read up on how the web works at its base, it’s highly centralized.

If you look how people interact with the web, it’s highly centralized to a handful of apps by a handful of companies.

People choose to do that because it’s convenient. There’s nothing in any of the nebulous ideas around “web3” that would change that.

You can use a federated social network RIGHT NOW. Or you can just make your own website TODAY. No permission needed, you get complete ownership. It’s the amazing decentralised dream that was (and is) the internet. Only thing it won’t do is potentially make you rich (at the expense of others) just for getting in (and out!) at the right time.

Very good points. I can't see Joe the Plumber using or caring about web3 if it requires any more effort then the current internet ( which is arguably already decentralized ... )

- You need permission from the central root certifying authorities (aka. getting a domain) for people to be able to find your site.

- You need to remain out of the shitlist of a handful of “spam and anti-evil” authorities (getting on a list means your site gets blocked by all the big browsers and can be permanent or take a long time to resolve)

- You need permission to host your content from the: hardware / cloud provider, the datacentre if you self-host, and / or intermediary ISPs for peering (if no-one will peer, your site may as well not exists)

There are some other parties you need permission or blessing from that don’t come immediately to mind.

Freenet and Tor have existed for a while and are solutions to these problems for those that need them. You’re not interested in that though are you? No coins so no option for speculation.

Web3 as it currently stands (as I said before it’s a slippery weasel word so no don’t you’ll change it to suite) also needs all that stuff. Most “web3” apps are served via Cloudflare ffs!

Why would you assume I am not interested in Freenet and Tor? Please review the Hacker News guidelines, as you are not replying in good faith.

A couple questions to dig into each point: What problem does it solve? Could web3 have the same problem? If so, how will web3 solve it?

Most of the points mentioned are security features to shield people from bad actors, something that crypto does not seem very good at thus far, which is why I’m curious how web3 solves similar things.

I'm most excited for digital asset marketplaces. I don't work in the space, and I only have a look at where things are every few months, so I'm probably the last person you should be asking.

Just like any paradigm change though, it's going to rely on the "killer implementation" to take off to kickstart the paradigm reaching mass appeal.

>You need permission from the central root certifying authorities[...]

>You need to remain out of the shitlist of a handful of “spam and anti-evil” authorities

And the exact same will happen in the world of 'web3'. Except you won't sign your terms and conditions in English but in from of a smart contract. The internet is a distributed computer, blockchains are distributed computers. Whatever people built on top of it will be as permissioned and have as many authorities as anything else.

You think you can't do encrypted, peer-to-peer communication without authorities on the good old internet? Of course you can, there's nothing technically in the way of it at all. It's just that nobody runs a business that way and they won't do it in the world of 'web3' either.

None of the points I listed apply to web3? So yes, I do imagine you won't need to the permission of any of those listed parties.

Web3 is not using TCP and DNS :)?

Some of the web3 concepts I've seen are indeed not using DNS in the practical sense you are implying. Why use CA's when you can run your own name service? There are plenty of other methods too.

Not exactly sure why you think TCP, the protocol, is relevant here? Creating or interacting with a web contract in a blockchain is a different ballgame to hosting a web site, and are treated as such by ISPs. One is indistuishable with normal web browsing, and the other is often treated as a business. The threat of having your ISP cut you off because they don't like what you are browsing remains a threat though, and hence a weakness by requiring their permission.

You say that; but after almost 20 years of attack at every one of those levels I can still connect to https://thepiratebay.org. And https://wikileaks.org. That wouldn't be possible if there was a true single entity in charge, both of those sites have enemies. In the case of wikileaks, enemies with literal firepower and secret agencies working to shut it down.

I never said there was a single entitiy in charge, nor that it was impossible to host politically damaging or ifringing content. I only said that you need permission from several parties. Both wikileaks and thepiratebay have obtained permission (or at a minimum did not attract ire) from all of the parties I listed. If they did not, then they would not be accessible.

Do you think either site managed to purchase and control a domain name without the approval of a domain registrar?

Do you think either site is accessible without the approval of the ISP providing a connection to their server?

Etc. down the list I provided.

If your point is that one human can't admin an entire internet then sure you are technically correct (best type). But that isn't a useful point - the web is still highly decentralised even though it takes more than one person to run it.

Both those domains at various times have had disagreements with their registrars, with their ISPs and with bodies on the internet more powerful than that. Hasn't made any difference to whether I can connect to them or not, because there are always alternative paths and vendors. Which is more or less what it means to be decentralised. In practice, being able to replace any party and keep on going is the capability that matters.

My point, as stated originally, is that "web3" and all the hype around it in its current form will require less (practically none) permission for users to interact with it than the existing web paradigm we are familiar with.

It's a cultural shift that is epitomized by trends like WSB, $GME, and Robinhood. To older people it doesn't make sense. So you can scream and shout that it is illogical (like many have re: gold, silver, etc) and adoption will continue to increase and the value of the underlying assets will go up.

It’s funny you should bring up other situations in which people in the know manipulate “less sophisticated” actors for their own benefit.

And that you think the alternative you’re arguing away from is investing in gold and silver is kind of hilarious. Precarious metal “investors” are just a different generation of poor fools.

People in the know are the "less Sophisticated" group

Part of the profit part of the web does not include decentralizing tech... This is the one thing that makes everything a scam. If you mint a new coin or NFT, there is always a bunch of actions a seller or buyer can take to either bolster or undermine the price of the asset.

Web 3 is also based on an economy of popularity and/or financial backing to either increase value or disparage an asset, which makes manipulation rampant, and it also makes the "Web 3 economy" inherently corrupt. Frankly, it's not a movement, it's really to me just a mutation of MLM and pyramid-scheme marketing online.

Sorry to be so harsh, but the way it's being spammed at all of us every day, and infecting real online commerce is abhorrent, and growing to the point where not much can be trusted when Web 3 is mentioned for me.

This! Also compared to a mobile ecosystem which is actually dependent on a few centralised players for distribution. WEB is still arguably free.

You can choose your social network - if you don't like it, create one.

You can choose where to store your data - if you don't like it, move it.

You can choose where to host your website - if you don't like it, you have options...

etc.

I don't really know much about web3 or what it will happen in the future, but these same debates happened ith other techs before which are now mainstream in a similar fashion as this here.

People like pointing out echo chambers all around while they are also in one.

Remember all the feathers ruffled with cloud computing? It just servers in a data center! Serverless? There are still servers! web2.0 s just ajax requests!

If people dump money into it, then something is likely to come out whether is better or not than what it was before. Maybe is worse, or maybe something will be built on top of it that will be better or some othere political event might make it relevant. Who knows

"but these same debates happened ith other techs before which are now mainstream in a similar fashion as this here"

They really didn't. In my 20+ year tech career I have never seen any new technology prove anywhere near as divisive as web3/crypto.

Before we mostly had to deal with people emotionally invested in a new thing, now they’re all financially invested as well. It makes for a different conversation.

Yes: the financial aspect definitely seems to have changed this — I share Simon's impression, and what this reminds me most of wasn't tech but the adjacent stock market circa late 1999/2000. If you knew a day trader at the time, they would be hyping up random stocks talking about how it was a sure thing to be the next Pets.com but if you asked them any questions at all it immediately became apparent that they had no idea about how that company worked, what the competitive environment was like, or how they could possibly become profitable. Some of them made fairly large amounts of money talking things up and selling before the inevitable drop but quite a few others were left holding the bag.

That level of confident ignorance is the prevailing tone of the cryptocurrency world: everyone talks about changing the world but it's extremely hard to find someone who actually understands the details of the business they're trying to get into or why it works the way it currently does, but they don't let that stop them because they've already bought in they stand to lose potentially quite large sums of money if they can't find buyers.

It’s called survivorship bias. Most things that people called bullshit we don’t remember because they were bullshit so why would we remember.

Now “crypto” is a little different because the the promise (not always followed though on, it’s still negative sum) of money to anyone who can bring themselves to believe. Like many bubbles and ponzi-like schemes before it’s primary functionally is to promote itself, and damn that’s one of the few things it’s really good at.

> feathers ruffled with cloud computing? It just servers in a data center! Serverless? There are still servers!

Unlike the crypto ecosystem, those offered a tradeoff of higher cost and less control for greater convenience and ease of management. Which was hugely successful.

They're also not ... hegemonizing? in the way that cryptocurrency seems to be advocated.

My main point being that such tradeoff wasn't obvious at the time, and also the cloud offering back then was very inferior to what it has evolved into and that we are familiar now

I'm not saying the same will neccessarily repeat with so called web3, but we might be at a similar stage - in this case the sensation(?) of ownership of one's content is a desired attribute at the expense of efficiency in computing/processing terms for some use cases

it's pretty much the wild west now and not fully understood, but if it attracts investment with time something might come out of it.

Maybe the onus is on the skeptics to conclusively prove that web3 is BS? Since none can effectively prove so, then maybe it is not BS? The skeptics are always inventing new reasons why it will fail, and yet it's still here and bigger than ever, day after day, making the skeptics seems crazy at this point, pointlessly arguing for lack of use for something that is clearly useful, judging by the sheer amount of capital and development resources used, if nothing else.

Is your argument here that web3 isn't bullshit as long as the number keeps going up?

What will your opinion be of web3 should the number start to continually go down?

As long as it is above 0 it has value and skeptics have to admit so. Anything else is ludicrous, to me.

There is obviously monetary value, but us skeptics see that it is driven by illicit trade, money laundering, tax evasion, pump & dump schemes, ponzi schemes, wash trading scams, etc. All things that are a net negative for society.

Yes it’s totally normal to take a word with no real definition (or at best a definition that shifts depending on what’s needed) and have to “prove” it’s BS.

If I tell you that web4 is all about complete freedom and an end to world hunger and it’s based on cow farts is it up to you to prove that it’s BS? (It’s early days for cow farts, you can’t judge them o what they can do right now)

Once your web4 has the same amount of capital and work behind it, then we can use cow farts, until then we got what we got, web3/crypto.

Ah so that’s your criteria, you should have said.

That was the whole point, it's here and now vs. what could be.

I think his point is that what you claim to be "here" and "now" is different than what is actually here and now. Just having funding and effort getting put into it does not mean it actually delivers on it's promises. That said I find no reason that cryptocurrencies couldn't deliver given enough time. I just find what they are delivering to be something I rather wish wouldn't exist.

Theranos also had massive capital, large corporation partners, years of work and many scientists working on it.

The dot-com bubble was similar.

The onus is on the cryptobros to prove its usefulness, not the other way around.

Is your theory that anything with lots of money shoved into it must be good? If so, can I interest you in some tulips? Or, more recently, a few thousand shipping containers of unsellable 3D TVs?

I think the PC analogy is solid. I think the observation that we need a way to permissionly interact with data is spot-on, and I agree that that could bring a second wave of value creation and innovation.

Think of having a Facebook-like social graph, not controlled by Facebook. Or a merchant aggregation system like Amazon's without Amazon. A system not driven by maximizing exposure monetization (via ads, paid placement, etc.) but by something like a Nash equilibrium that maximizes value creation for participants.

This is what I work on, and I think it can be done.

> I think the observation that we need a way to permissionly interact with data is spot-on

The entire argument rests upon this premise and the author doesn’t explain it one bit.

I think that the original idea behind crypto is still the most interesting. It's programmable money. Large swaths of the finance industry exist to make money programmable. Why not build it into the monetary system directly?

The general historical trend is to make money more abstract and to be able to perform more complicated functions with it. But fundamentally money is a social technology that consists of three things: An abstract unit of value in which money is denominated, a system of accounts, which keeps track of the individuals' or the institutions' credit or debt balances as they engage in trade with one another and the possibility that the original creditor in a relationship can transfer their debtor's obligation to a third party in settlement of some unrelated debt. [0]

Crypto seems to satisfy the essence of that in a pretty cool way. DeFi projects are experimenting with the question of, "can we build the financial instruments and capabilities that a complex economy require on top of, and directly integrated with, this type of monetary system.

Like any technology that requires a large network of users to be valuable it has a difficult bootstrapping problem. But it seems to be gradually working its way to larger and more important transactional contexts. First with illegal digital marketplaces and now in countries with weak monetary system like El Salvador (and with unbridled speculation along the way).

Maybe all of the current crypto projects will fail but it will be interesting to see the nature of monetary systems in 10, 20 and 50 years from now. What aspects of these current experiments have been adopted?

[0] Money: The Unauthorized Biography

> Put differently: it turned out that permissionless publishing alone was insufficient. We also need permissionless data.

Has the author ever heard of OpenStreetMap, Wikipedia, or a million other projects like them? I'm also not quite sure "permissionless data" is how I'd describe a database that stores tiny amounts of data at a massive cost. Pay-to-play is permissionless iif you have the money.

Sometimes the cure is worse than the disease.

Wikipedia database is managed by the wikimedia staff. You have the permission to edit it for now but can not guarantee it will be make available always. This is what the author meant.

Doesn't wikipedia keep a history of all the edits, and aren't these available to wikipedia users?

I believe they do; you can download archives at [0]. It mentions that the edit history can be downloaded by looking for dumps with page-meta-history in their name at [1]

The same is probably true for OpenStreetMap et al.

[0] https://dumps.wikimedia.org/ [1] https://dumps.wikimedia.org/enwiki/latest/

They're just rows in a MySQL database. Traditional RDBMS for OLTP are built around the assumption that all data is mutable. An unscrupulous Wikipedia DBA could unilaterally delete new history rows before anyone downloads a hard-copy and then no-one would be the wiser.

On the topic of OLTP RDBMS: things are changing though: ISO SQL (and at least MS SQL Server) have added support for "LEDGER" tables that extend the Temporal Table system (...that we know and love...er...hate) with immutability secured with cryptographic keys. Basically, you get to have your own centralized blockchain-like table.... so long as you trust your DBMS (and DBA) with the keys.

There's two types: append-only and updatable (which is still append-only under-the-hood, as destructive DML operations are still just appended to current history, just like with git).

https://docs.microsoft.com/en-us/azure/azure-sql/database/le...

It's pretty cool, I'll admit - I've been wanting support for true "read-only" tables for ages - the only thing I'm dreading is having to put-up with poor tooling support for a decade or two (e.g. Entity Framework Core still doesn't support temporal-tables, and SQL Server still only supports SYSTEM versioning and not the (far more useful) APPLICATION versioning system, argh).

That said, I don't think Wikipedia would really want crypto-signed page edit histories: it would obligate them to host truly objectionable content (otherwise the hash references would break), and there's far too many sociopathic griefers online for that to not happen...

Opensea is managed by opensea staff, Bitcoin and Etheream are in a very concrete way managed by the devs. You absolutely cannot guarantee anything about access in the future for sites based on web3 - if anything it is worse as there are two gatekeepers, the site owner and the cryptocurrency (so for example gas fees might go up making a tiny transaction very expensive, or a currency might fail).

Nobody wants a truly distributed org because it is impossible for anything to get done, just as nobody actually wants to use a distributed currency because the costs outweigh the benefits, and the web we have is distributed enough, though of course it has flaws and is in some ways too centralised now, but I don't see how web3 as currently sold helps to solve that.

The biggest problems currently are around identity (SSO), and microtransactions, but neither of those are solved well by existing cryptocurrency solutions or things like NFTs.

> Opensea is managed by opensea staff

Opensea is just a viewer and tool to interact with contracts. If your NFT is removed from opensea it could still be interacted with through another platform or a platform you make yourself (see notlarvalabs).

E.g the developer of a large NFT platform called hicetnunc had a temper tantrum and deleted their entire platform. But because it’s decentralized another platform (objkt) now provides all the same functionality with the same data.

Because of this you can see why there are such passionate people either side, a lot to gain but also a lot to lose if you’ve normally profited from owning data.

That’s the theory, in practice the largest market wins, nfts are often urls to a particular service and opensea does things like this:

https://blockzeit.com/opensea-nft-marketplace-stops-hacker-f...

This is very much controlled by the intermediary (as well as the chain it uses).

Microtransactions will be solved by Brave/BAT. They have the largest user base which is very important for negotiating with publishers and advertisers.

> can not guarantee it will be make available always

True! However I trust the wikimedia foundation, and the fact that because it is a valuable dataset there are many copies of it. If they really did restrict access, anyone could spin up their mirror.

Most of the decentralisation arguments seem to rely on some fetishistically absolute version of the world where you cannot trust any single person or entity, and crypto/web3 is the only reasonable solution if that is true. I, however, have more faith in other people, and am fine placing trust—to varying degrees—in others.

> some fetishistically absolute version of the world where you cannot trust any single person or entity

And even then, there’s still trust necessary to the extent that web3 things interact with the real world. You can have provable on-chain voting in a DAO, but if the DAO owns any non-crypto assets, you’re trusting a human to execute the consensus decision.

...and society to run the internet you depend on

> I trust the wikimedia foundation

The board members change so it can go wrong.

> ..where you cannot trust any single person..

You are missing the point. Obviously society runs based on mutual trust. One can not ignore the fact that a few people or group in power can create great damage. Crypto makes it possible to create "trust by design" systems so that a small group can not do great damage or censor things that undermine their power.

No it doesn't. It just creates the illusion of this and allows you to build systems with different tradeoffs.

That's a great example of decentralization, but expecting anything which gains value from being decentralized ala Wikipedia to be handled solely or even marginally by volunteers is unrealistic.

> I, however, have more faith in other people, and am fine placing trust—to varying degrees—in others.

That's one perspective, another is: privilege.

> not guarantee it will be make available always

Untrue. You can download the entire database now, and there are many clones.

Since the ICO craze in 2017 I've seen countless ideas and millions spent trying to use blockchain and crypto for everything you could possibly imagine, and yet I don't see anything meaningful has ever came out of it, apart from get rich quick schemes, ponzis and some virtual novelty items.

Bitcoin has been around for 12 years, but in real life I don't know anyone who has ever used something crypto related for anything else than risky investment, or basically gambling. I'm very skeptical.

Drugs too, don't forget drugs!

I've never met anyone who's ever used their stock certificates for anything other than speculation.

However, I have participated in a multisig that controls six figures of funds with a handful of strangers on the internet. I have used my governance tokens to vote on DAO proposals regarding new product lines and features. I have created and sold NFT artwork. I have registered a domain name and set an immutable record on a smart contract linking to a website and an Ethereum wallet. I have used it for logging in to software. I've built software that gates access based on ownership of a particular NFT. I've stored data on Filecoin and archived it on Arweave. I've borrowed money on-chain. I've commissioned artwork and paid in ETH. I've bought gold with Bitcoin. I've helped raise a million dollars for charity with a major celebrity. I've contributed to Gitcoin grants for public goods software funding. Your skepticism just closes your mind and blinds you to what's possible.

and none of these things were impossible before. what's the value add of doing it in this way opposed to the old way?

the big argument you'll likely hear is that everything the OP did was "decentralized", a virtue worthy in and into itself

Sure - and these are all great examples of what you can do with crypto. Where I see parent pushing back is that all of these things were already possible before. You could buy jpg's with credit cards, you could buy gold with the dollar.

Before the spreadsheet it was extremely difficult to do arithmetic at scale. After the spreadsheet it was much, much quicker.

What's the killer feature that cannot be replicated easily without crypto?

My understanding of these things is limited, but I think the most interesting thing about them is that open APIs seem to be the default way to interact with them, not something tacked on after the fact, and you don't have to beg for an API key for each one, contact a salesperson, or whatever. If these things proliferate, it seems like one could compose mashups of services to build online things relatively quickly.

Also, for bitcoin in particular, the lightning network makes it possible to pay a fraction of a cent for something, which is not possible with a credit card, and it potentially offers a uniform location/country-agnostic way to pay for things online. Stripe has made that much less of a problem than it used to be, but I'm not sure it's quite 100% global coverage yet, and afaik they have no solution for micropayments.

appreciate the response - your second point especially rings true for me and has set off some thoughts of my own:

I would say my 'theory of crypto' is that they're rediscovering the financial system. The financial system can do everything crypto can and more. The fact it does not is due almost entirely to regulation.

This implies crypto will be most useful in environments where you can skirt regulation the longest. I imagine cross-border payment systems(esp to emerging market countries) are the most promising examples of where this would be useful, and i know there are some groups working on this already.

This also implies that in the developed world, crypto has capped upside. The point at which it's big enough to matter is the point at which its regulated. It will rapidly converge to 'Trad Fi' without the institutional support the financial world already has.

Just some thoughts bouncing around my head that your comment spurred...

Yeah, they seem to be rediscovering lots of the reasons for regs :-) The whole DAO fiasco and the resulting fork was especially interesting to read about.

I think that it's much more of an internet-native payment system than anything we've seen before, so I have some hope that it won't just be useful for skirting regulation. It feels like a much better match. But we'll see.

My biggest issue is that Bitcoin (and all proof of work) is still a bit of an environmental disaster. Hopefully the carbon generation doesn't scale with transaction volume.

What crypto has unveiled is the total and utter moral and intellectual bankruptcy of financial regulations.

Take token sales. Before the SEC entered the scene in 2017, tens of thousands, and possibly millions of people were able to participate in early stage investment. The result is that those projects that conducted their initial round of venture capital fundraising before 2017, via permissionless token sales, have a much more distributed ownership structure than those that conducted their initial round in accordance with SEC rules:

https://i.ibb.co/qCjJWJb/FAK6ao-HVc-AAg-V-i.jpg

Amongst the projects listed in the graph, Ethereum, Cardano, Cosmos, PolkaDot, Tron, EOS and Tezos all had their initial token sale before the SEC's involvement in 2017, and consequently have majority public/community ownership of their tokens. Some of these projects, like Ethereum, gave ordinary people 1,000X+ returns on their investment.

A study on this brief experiment in permissionless, unregulated venture capital financing concurs, unveiling that token sales massively expanded financial inclusivity:

https://link.springer.com/article/10.1007/s11408-020-00366-0

"The average ICO has almost 4700 contributors. The median contributor invests a relatively small amount. The ICO market appears to have successfully given access to the financing of innovation to a new class of investors, which is a long-standing public policy issue"

The rest of the platforms in the graphic, like Flow, Solana and Avalanche, conducted their initial token sale after SEC involvement, and the majority of their tokens are consequently owned by insiders, constituted by a tiny cadre of VC firms, who got to monopolize the initial token sale and thus enjoy 1,000X+ gains.

This amounts to an obscene exacerbation of wealth inequality in the crypto space, due to SEC enforcement of securities regulations.

Now the old token sale could be shut down by the SEC. New methods of token distribution and project bootstapping cannot be, or at least cannot so easily, and they are resurrecting the financial renaissance that existed between early 2016 and late 2017.

Do you have an email I could write to ?

Links would be more compelling than grandstanding.

> [DAO, NFT, gold]

Pretty bold stuff! Thought people had generally accepted DAO's and NFT's as likely scams.

Do you want to actually share the URL's for these things? Shit, does web 3.0 even use proper URL's? Where is this magic land of highly democratized services? And why isn't a URL, perhaps the most fundamental tenet of the "web", _ever_ shared in these discussions?

Perhaps it would illuminate the fact that this stuff is all highly centralized already? With most services requiring personally identifying information in order to use them? Wonder what that's needed for...

It's a long article which says that Web3 is a database which nobody owns followed by a lot of hand-wavy stuff that you see everywhere else.

The worst part of this is that I feel like I could get dragged into this. That at some point I'll have no choice but to start digging into this and dedicate time to other stacks because the money behind Web3 succeeds in shoving it down everyone's throats.

This is someone talking about technology fixing problems, but ignoring the messy real world. For example, we have repeatedly seen how governments can control things which "nobody owns."

Another item which stood out was the idea of Web3 taking back control from the big tech companies. But if they are monopolies, then shouldn't it be the government which takes them down?

The government has been completely weak on antitrust law since the 90s.

Dumb questions: Why does "web3" need venture capital. Why are VC (like this author) pushing for web3.

Someone suggested it is because they have invested heavily in ETH mining.

Interest rates are zeroed out and they need another tulip frenzy.

Because VCs have heavily invested over the last few years in blockchain companies and cryptocurrencies in general, they need to keep pumping this bubble, so NFTs, web3 etc became necessary to invent.

Web3 is just the latest excuse to keep the game of musical chairs going and preserve the chimera of use-value for cryptocurrencies since very few people want to use them to actually transact.

ETH mining is going away forever with ETH 2.0’s The Merge that is set for June 2022.

https://cointelegraph.com/news/eth2-devs-put-out-call-to-com...

You mean the thing when the ETH people are going to hand the power over the people with the most money? I'm sure this idea is deeply chilling to... venture capitalists, they're probably shaking in their boots.

Whereas now power is with the people with the most... GPUs? Those don't grow on trees either.

Right. And both are bad.

How do you think proof of work operates now? Do you think big mining operations don’t take massive capital? They do, and also waste ungodly amounts of power at the same time.

The difference is PoW can still be distributed beyond what exists today if someone decides to get involved and take power away from the consensus.

With PoS the consensus chooses if they want to give up power and you can only gain decentralization if they choose to give it up.

POS only works with an active economy i.e. validation requires something to validate e.g. consumers using ETH to buy goods and services. This implies the general population has access to large amounts of liquidity of the currency.

A new institutional investor just needs to start hoarding that easily accessible liquidity and the biggest players in the space will need to give up their share or risk the price of the currency dropping to zero because it’s too hard to transact in it and therefore it’s no longer profitable to tie up 32 ETH and run validators.

You're conflating bitcoin mining with ethereum mining. Anyone with a GPU can mine eth and therefore the capital requirements are far lower. Now, of course if you want to make big money, then that requires big capital... but that could be said of nearly any business out there.

You gain more power by having more money in both PoW and PoS. In PoW it means you can buy more hashing power, in PoS it means you can buy more of the network's currency to stake. Even under PoS, the network's upgrades still rely on social consensus, as in node operators (!= validators) agreeing to forks, and the network's finality requires 2/3 of the network's almost 300'000 validators to come to consensus.

Yes.

"Actually both systems give power to those who are already wealthy" isn't the argument for democratization and decentralizations crypto believers apparently think it is.

Gatekeeping access to (edit: online, but I suppose this could also apply to offline) resources based on digitally verifiable ownership and the subsequent rent-seeking is a capitalist wet dream. I'm not the least bit surprised the VCs are slavering over web3.

Why does "web3" need venture capital.

There's no reason why a business trying to use "web3" wouldn't need to raise a round. Every business that wants to grow more quickly than the founders can manage alone needs some sort of capital to pay people to help. One way to do that is by giving up a bit of equity in return for money.

That sounds a lot like, you know, web 2.0. Let's scheme this out: Facebook (and its corporate policies) is often named a motivating factor for web3. If I wanted to make a web3 replacement (let's call it MastoCoin), how would the economics of that actually work? People would still want to upload lots of posts and pictures and stuff, and that would presumably continue to live on S3 (etc.). Somebody needs to pay the bills for that monthly. So even if I had to pay $3 bucks in gas to post my sarcastic tweet, someone else would incur an indefinite expenditure on it, no? I really cannot think of a non-pyramid model here.

Society should certainly protect people from being scammed by others, but I don't think that's what web3 is. It's not a "pyramid scheme" in the traditional sense because it's not a scheme. It's just a pyramid. It's a collective delusion. If people believe in it, great. If they think they can profit from it then they should try. If they win, cool. If they lose, also cool.

I definitely don't think web3 should be 'stopped' on moral grounds. Maybe it should on environment grounds, or on the grounds of how annoying web3 evangelists are, but stopping it to protect people from investing in something silly is not a good idea. Let people learn from their mistakes (or maybe I'll learn to be less cynical when NFTs turn out to be the next BTC, which I also regret not buying, or Amazon stock that I didn't buy, or Apple, or Pixar, or MSFT... this is a long list.)

Filecoin, Sia, and Arweave are three of the bigger chains involved in decentralized file storage. A combination of IPFS for data verification and one of these services for storage is typically enough. Many apps will store both on S3 and on Filecoin and link the IPFS hash for redundance. It's not a pyramid model, the native tokens are used to purchase storage and incentivize the bootstrapping of the storage network build out. Arweave has created an endowment like structure to guarantee data storage for 200 years.

What makes you think it needs it? If every person in the world shilled something they called Web3 that wouldn't change the conclusion of this blog post? What are you on about, exactly?

Because Proof of Work requires computational power, which is expensive and thus requires a lot of capital, and Proof of Stake requires controlling a significant amount of the currency, which also requires a lot of capital. Basically the consensus is built around ways to demonstrate you already have a lot of money, either through conspicuous consumption (PoW) or flaunting your balance (PoS).

As to why VCs would invest in it: it's currently dodging most regulations that apply to financial transactions (money laundering, pyramid schemes, pump & dump schemes, etc) much like loot boxes dodge most gambling regulations (and it turns out selling gambling to kids is extremely profitable). This makes the market uniquely profitable to invest in right now with promises of extreme ROI as long as it remains unregulated.

"Humanitarian" campaigns to normalize tracking public records and qualifications on the blockchain in technologically underdeveloped countries also produce a high amount of technological lock-in while increasing the capabilities of automated decision making on the blockchain without having to bother with externalities. For example, if one's ability to use an NFT on social media hinges on demonstrating ownership of that NFT, copyright law becomes a tangential consideration much like systems like ContentID make it harder to claim fair use rights because the ContentID claim is not based in copyright law but in the terms of service.

Additionally a lot of the more vocal tech VCs are libertarians bordering on anarcho-capitalism (i.e. free market maximalists who think humanity's survival and progress hinges on a few Great Men rather than the unsophisticated masses). The greater Web3 ecosystem is trying to solve cooperation with people you actively distrust and represents every interaction as a financial transaction. This is extremely appealing to them. Their problem with capitalism isn't that it inevitably leads to a massive wealth disparity (because after all, some people are "just better") but that the government gets in the way. This makes the promise of decentralization (even if it defers to consensus between the already wealthy) ideologically appealing to them.

Based on my conversations with web3 believers, they would generally agree with most of what I said but object to the language I'm using because it doesn't sound very flattering.

regarding "free market maximalists who think humanity's survival and progress hinges on a few Great Men rather than the unsophisticated masses" -

Libertarianism may have changed in character, or perhaps more in how it is characterized in media, but it used to be that libertarians believed in lots of little people acting freely and that states and the large corporations they are mutually supported by are the opposite of what they want.

Hopefully it is because the little people have largely left the relatively pointless large media spaces online and does not represent a genuine change in how the majority of libertarians, who used to not be terribly wealthy if they were wealthy at all, think.

I think this is a common misunderstanding because "libertarianism" nowadays can refer both to what is now called "libertarian socialism" (i.e. anarchism, individuals cooperating voluntarily for the common good) and right-wing libertarianism (i.e. laissez-faire capitalism or "anarcho-capitalism", natural selection via the free market).

The latter generally believe some people are inherently superior (though they will not always make a point of where this comes from) and that everyone therefore deserves their lot in life because those at the bottom either are inherently inferior (and thus undeserving) or failed to activate their potential (and thus undeserving).

The former generally believe we don't stand on the shoulders of giants so much as on the shoulders of billions and billions of people no worse or better than us. Some individuals may have genuine innate talent making them better at one thing or another without trying but while that may make their opinion on those matters more qualified it doesn't justify any claim to power as societal decisions (such as allocation of resources) should be reached by gaining consent from everyone affected.

Without regulation, markets naturally tend towards centralization and thus a significant power imbalance. Heck, if you were to fully abolish the public commons and the state, you would inevitably reinvent feudalism as the owners of the largest corporations would need to hire private militias to subdue their workers and defend their property claims against competitors, customers and colonies. This is why many right-wing libertarians still want a public police and military and why libertarian socialists generally don't want markets as a political instrument even if they may be favorable towards coops as an intermediate step or for the production of commodity goods.

Even deeper question. Why does "web3" need to make money? Wouldn't it be better to go hobbyist providing services? Or everyone running their own things at their own cost, marginal let's say 10 or 100 a year? Like true decentralization, that isn't burden to profit...

Because incentives. The beauty of crypto/web3 is to reward the service providers with incentives for their services. Nobody is going to provide things for free and even if they do it won't be sustainable in the long run.

This is more or less what I am asking. Apparently Web3 does not solve the problem of VC. Perhaps it does not even contemplate this as a problem.

> Someone suggested it is because they have invested heavily in ETH mining.

VCs own ETH from the presale not from investing in mining.

That is simply not true. VCs have invested in mining operations.

VC funding is needed to raise funds for software engineers and provide access to mentorship and community, like every other software company that uses VC funding. You can raise funds through other means (bootstrapping, ICOs, etc) but these have their own sets of downsides.

People sometimes claim that there's a generational divide in crypto adoption — younger people "get it" while older people (those who came of age with the early web) are stuck in their ways.

But there’s a large group of older people who cling to crypto because they think it'll make their ideas sound relevant again. While appearing "disruptive", the crypto space actually privileges those (generally older) folks who already have money to burn (like the Winklevoss twins, whose payout from FB provided more money than they could ever spend on themselves in one lifetime).

Counterexample: Me.

Relatively young, not at all into crypto, due to environmental reasons

If Ethereum completes its migration to proof of stake as expected this year, would you be interested?

Yes

There are many new systems that are superior to Ethereum (e.g Polkadot, Terra LUNA) that already satisfy your requirement.

That may well be, I am not that interested in crypto.

I found the idea of a non governmental controlled currency with an upper bounded amount interesting, as inflation can't be a thing.

But as a means to satisfy greed... Nope, I am happy with what I have.

So there are other spaces in science and computer science I am more invested and interested in.

> I found the idea of a non governmental controlled currency with an upper bounded amount interesting, as inflation can't be a thing.

As I'm sure you would realise if you give the textbooks a chance, deflation is much worse than inflation. Nor is bitcoin truly inflation-less; the prices swing like a yo-yo, it's simply deflationary on average thus far.

How about as a means to provide financial security to the world's 1.7 billion unbanked, a means for those who live under oppressive rule to preserve wealth in the face of rampant currency debasement, in a form that cannot be confiscated or stolen. Money-printing drives inflation which is is a regressive tax that disproportionally hurts the poor, who don't own real estate or stocks. It accelerates the wealth gap, which further strains our society. Bitcoin is a means to expand financial inclusion, and help level the playing field just a bit. It's not just about greed.

Regarding energy use, Bitcoin mining inherently seeks out the lowest cost electricity which turns out to be either stranded energy (not usable for anything else) or renewable (solar, wind, hydro). This is yet another reason to push governments to stop subsidizing fossil fuels. Also, since Bitcoin mining can be done at any time and in any place, it is able to act as the buyer of last resort for renewable projects whose energy production does not line up with grid demand. Having this extra buyer can greatly reduce the payback period for a proposed solar/wind project that otherwise would not have been able to attract the investment to build it.

> How about as a means to provide financial security to the world's 1.7 billion unbanked

Let them eat crypto

How is me investing in crypto changing the lot of 1.7 billion people?

I may be the chosen one, but am I that important?

To phrase it differently: all you said may (sic!) be true, doesn't change my personal interest though.

You could think of where you store your wealth as a vote for the system which best represents your values, and for the system you would like to see proliferated. Your inclusion adds value to the network, which strengthens its security and helps push it up the adoption s-curve. The more users there are, the more services appear, and the more accessible and useful it becomes.

I was never that interested in monetary policy or the history of money until I found out about Bitcoin and started doing my own research.

My house on the countryside and self sustaining lifestyle (obviously not totally hermitic, but way more than the average person) votes for the system very loudly I'd say.

I am very interested in the history of money, but it made me a Marxist, or rather a Trotskyist ;)

If Bitcoin can be spent, its owners can be coerced to spend it, so it can be stolen. Regarding excess energy, I'd rather have energy storage firms be that buyer.

Cryptocurrencies may have a part to play in the future of humanity, but Bitcoin will not be it. It's a proof of concept that's overstayed its welcome.

A person's Bitcoin holdings can be distributed across any number of wallets. How does the thief know (1) their mark owns Bitcoin, (2) how much Bitcoin they are stealing, and (3) whether they have coerced the owner to hand over the keys to all of their wallets?

Energy storage is inefficient and expensive, so a new renewable project based around this is less likely to be funded and built than one that can directly monetize the excess. Profit and greed is the incentive structure for much of human society.

Bitcoin has all of the properties we need in a store of value for the base layer of a digital monetary system of the future. The energy expenditure is required to provide the highest level of security and decentralization which is needed for a global reserve asset. Any other system is vulnerable to attack or centralization, which will inevitably succumb to human greed like every fiat system in history.

> A person's Bitcoin holdings can be distributed across any number of wallets. How does the thief know (1) their mark owns Bitcoin, (2) how much Bitcoin they are stealing, and (3) whether they have coerced the owner to hand over the keys to all of their wallets?

Are the unbanked really going to operate a number of different wallets, including decoy wallets, to prepare for this scenario?

> Bitcoin has all of the properties we need in a store of value for the base layer of a digital monetary system of the future.

Its parameters were picked on a whim by somebody nobody can ever find. "Completely unchangeable parameters handed down from the equivalent of God" is not a property that I look for in a monetary system.

The safest and most effective method for storing wealth that the unbanked currently have is to bury gold jewelry somewhere. Gold holds its value better than fiat, but is not easily divisible and there is a large cost to converting it to/from fiat. Bitcoin keys can also be buried, but if necessary they can also be memorized and transported across borders without risk of seizure. Also, having multiple wallets is not complicated; you may be underestimating the cleverness of the unbanked.

The parameters of the Bitcoin code are changeable (and have changed multiple times since inception) via hard-fork based on the 'voting' of the nodes which verify all new blocks and number in the tens of thousands distributed across the globe. The parameters of the protocol are set such that anyone can run a verification node on only a couple hundred dollars worth of hardware, thereby encouraging decentralization.

https://river.com/learn/can-bitcoins-hard-cap-of-21-million-...

> The parameters of the Bitcoin code are changeable

In principle, yes. But look at the clusterfuck that was the BCH fork. Something as basic as blocksize led to an outrageous amount of venom and two communities hating each other. Now imagine if the core devs wanted to change things that more directly affected the relative wealth of early adopters. Could you believe the anger if they proposed that we double the number of eventually mined bitcoins?

Inflation is not just caused by printing money. You can still experience inflation (rising prices of a basket of goods) without any change in the amount of available currency.

What are your thoughts on current PoS systems, such as Polygon?

No thoughts, never heard of it.

I'm not convinced younger people get it when they seem to spend all their time on TikTok.

I'm curious what the evidence is that it's not mostly old people with too much money and handful of young influncers.

What I'm trying to figure out about blockchain in general is how people think it will avoid the inevitable consolidation that efficient economies drive towards. A few examples:

- In the early days of the automobile there were hundreds of car companies. Now there are essentially what, 10 worldwide?

- In the early days of personal computing there were hundreds of competing platforms, PC brands, etc. Now there are essentially what, 10 worldwide?

- In the early days of the internet there were hundreds (thousands?) of dial-up and last mile internet providers (sometimes literally some person in your neighborhood with a T1 and modems in a garage). Now there are what, 10 in the US?

- In the early days of the internet there were hundreds of web hosting companies, e-mail providers, etc. Now almost all of the internet runs on what, three?

These examples go on and on (mobile devices, cell providers, pretty much anything and everything).

Point being it's extremely unlikely (to me) that as the immutable blockchain ledgers all of this is built on grow endlessly (storage, compute, bandwidth, etc) and attempt to scale to any meaningful application, transaction rate, etc beyond the toy level it's at now "decentralized" will almost certainly turn into a handful of power players that can bring the advantages offered by massive economies of scale.

I don't agree with some of your examples but setting that aside, all of what you mentioned are economic products and services. Crypto is neither. Without crypto you have cash, credit card, debit card, prepaid card, gift card, paypal, ecash, applepay, western union, money gram, epay and a myriad of other non-crypto payment methods that are based on central bank currency. They did not consolidate. Or look at currencies in general, every country has one by design.

Also decentralized does not mean that there are no hubs where decisins and power is concentrated, it simply means there is no one center. Much like how people say the US is democratic because you have two parties to choose from instead of just one like China. I do think perect decentalization is egalitarian in that all important decisions are 51% majority consensus with every vote having equal weight. However most practical decentralized systems are distributed with the capacity to be fully decentralized.

Crypto currencies that will last long term will reflect a demand for specific payment needs. To use your example, we have lesser number of PC makers because they all make similar varieties of PCs. With payment systems you have ACH,SWIFT,card payment (instant), cash (anonymous),etc... there will be cryptocurrencies that will reflect popular payment and speculative investment needs for the long term.

Heck, I would even speculate in a crypto lottery!

I'm aware I'm talking very broadly and generally about the "majority" and in many cases "overwhelming majority" of these cases. I know some of my examples are hyperbolic and a little "loose". I've been meaning to research and document actual numbers and examples to either validate or invalidate my take. Now that I'm really thinking about it because of your thoughtful reply I just might!

That said I think banking and payments are further examples. The vast, vast majority of banking and payment activity happens through a relatively tiny number of banks and payment processing networks. The US dollar is used officially and unofficially in many other countries. Europe went to the Euro. As I understand it much of worldwide settlement internationally happens in the US dollar which is also more-or-less the official worldwide reserve currency.

Bitcoin currently does about 500k transactions/day worldwide (as best as I can tell). That's probably roughly the number of daily transactions for a mid-sized US city. At a future point in time where a significant number of people are transacting in cryptocurrency multiple times per day an immutable blockchain ledger with no upper bound on growth will swell to astronomical size when a significant number of people are transacting with it multiple times per day.

Now your $3 Starbucks purchase is recorded for eternity and replicated across hundreds or thousands of nodes?

> The vast, vast majority of banking and payment activity happens through a relatively tiny number of banks and payment processing networks.

Not by choice of merchants or connsumers, does not reflect demand but incentives

> The US dollar is used officially and unofficially in many other countries.

Kind if like BTC?

> Now your $3 Starbucks purchase is recorded for eternity and replicated across hundreds or thousands of nodes?

Great point, hence the demand there created zcash and monero. I would say BTC is akin to ACH and SWIFT not credit cards or cash payment.

Whatever the limits of exiting currencies is, it only opens up room for demand. Heck, you can even have central bank crypto (as JPM and China are trying).

There is hardly anything new about crypto other than specifics of implementation. BTC does not define or reflect upon all crypto. Currency is not a new concept, using a distributed ledger is new-ish and using proof of work, bandwidth, storage,etc... while these backing value stores are new, having precious metals, livestock, land, etc... as a backing value store is not that different, crypto is just an adaptation of having something difficult to obtain or of value to others and using it as a value store.

My example of the $3 Starbucks purchase is not specific to BTC and applies to every distributed immutable ledger technology I've seen. I use Bitcoin because it's the most ubiquitous but generally these same statements and data apply to every cryptocurrency (just at different scale). From the Bitcoin node documentation:

"It’s common for full nodes on high-speed connections to use 200 gigabytes upload or more a month. Download usage is around 20 gigabytes a month, plus around an additional 340 gigabytes the first time you start your node."

There are roughly 1 billion credit card transactions per day. There are currently 500k Bitcoin transactions per day.That's 2000x for credit cards alone. Bitcoin transactions are at a more or less all time high and it's still a TINY number. Yet, the full ledger is at least 340GB with 20GB added each month. With simple math (and current tech) if credit cards were Bitcoin the ledger would be 6.8 petabytes. Back to my comment about it only being available to well funded large players eventually...

In terms of everything from energy consumption, supply chain, manufacturing resources, raw minerals etc there are roughly 13,000 bitcoin nodes online. That's 13,000 nodes using 340GB of storage each with total storage use at 4.42 petabytes. If there were still only 13,000 nodes at credit card scale the global storage resources alone would be 88.4 exabytes.

At 500k transactions/day some estimates put Bitcoin's global energy usage at seven times higher than all of Google. Bitcoin is a mid-size US cities worth of ledger activity while Google gets 3.5 billion searches per day alone. That's not even considering their countless other products - GCP, etc, etc.

Blockchain advocates always like to point out the energy consumed by the financial system and that's fair. However, if you think it's absolutely vital that the record of your $3 Starbucks purchase needs to be accessible to your great-great-great grandchildren 13,000 times over I think we're just going to have a fundamental disagreement about that.

I'm not a web3 evangelist but I feel the need to say, all of these examples are the result of incentives. Dig into "theory of the firm" it is a very poorly yet somewhat understood set of principles. If you can construct a system with incentives that make consolidation more costly you can by and large prevent it where you want to prevent it. Of course, there are still things that are more efficient after consolidation, there are things you wouldn't want to disincentivize consolidation in, and carefully designing incentives is a lot like preventing security exploits: you have to think of everything to prevent an unwanted outcome, but all you have to do is miss one thing and you get unwanted outcomes.

> When (now Sir) Tim Berners-Lee invented the HyperText Transfer Protocol (HTTP) he unleashed what we now think of as permissionless publishing.

1. Retconning

2. As always, web3 and crypto is the next WWW, and the next Internet, and the next car, and the next wheel. Even though literally all signs are pointing to it being the next Juicero or the next Enron.

> We also need permissionless data. Why do we need this? Because otherwise we are left with a few large corporations ... We of course know where this winds up and that’s why pretty much everyone hates their cable company and their electric utility.

That's quite a logic leap. We need permissionless data because that's why everyone hates their cable company.

> prior to the Bitcoin Paper we literally didn’t know how to have permissionless.

1. We did.

2. Retconning yet again. Bticoin paper is literally this:

--- start quote ---

A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution.

We propose a solution to the double-spending problem using a peer-to-peer network.

--- end quote ---

The etire paper mentions permissions or permissionless exactly zero times.

> It is difficult to overstate how big an innovation this is.

Yes, you have. Yoi have just significantly overstated how big it is.

> As such Web3 can, if properly developed and with the right kind of regulation, provide

Ah yes, regulations. Which, if I remember from just a few paragraphs above "then leads us to all sort of regulatory contortions aimed at rectifying the power imbalance but in practice mostly cementing it. "

> And if widely adopted Web3/crypto technology will also start to improve along other dimensions. It will become faster and more efficient.

And that will surely happen just because you say it will happen. Also because innovation I guess?

> And much like the PC was a platform for innovation that never happened on mainframes or mini computers, Web3 will be a platform for innovation that would never come from Facebook, Amazon, Google, etc.

Innovation never came from Juicero either. Somehow, your web3 is surely the next Internet, and not the myriad of failed "innovations".

To add to the list of complaints.

> No single entity or small group of entities controls it

In practice they will. The moment +50% of miners agrees on any transaction, regardless of it happening - it will happen. So having +50% of Bitcoin miners means you control the Bitcoin market. And we're back to square one.

Edit: Fine they only control current transactions, but forking as a solution to this implies the current network won't be able to just join and takeover a new bitcoin fork. Which is highly suspect.

There's also the case of many "scalable protocols to fix blockchains" relying on people with a lot of cash to run the nodes.

And things like DAOs replacing "single entities or small group of entities" with the rule of the mob, which is just as scary.

This is inaccurate, especially in the case of Bitcoin where the blockchain is relatively small (around 300-400gbs). Hash majority has zero influence on transaction validity. Invalid transactions are never accepted by the vanilla software, and those running nodes have no reason to accept them. Even if 99% of the network accepts an invalid transaction, the network will simply fork into an obviously invalid state and a valid state. Users will simply choose the one without foul play, and the majority of Bitcoin holders, even those who don't run nodes, will know which fork is valid and simply price the invalid fork at $0.

You are confusing a 51% attack, or a block re-org attack, with complete control over the network, which it does not grant.

So?

They would be able to double spend and control any future transacations.

At that point. Blockchain reinvented Bank with extra steps, that emits enough CO2 to replace Sweden.

So what if you are incorrect? Is that what you mean to say?

What about double spending allows miners to control all future transactions afterwards? Double spending is of course undesirable but its hard to imagine its profitable to organize such an attack when it immediately begins burning money once word gets out, and if it didn't it would devalue the miners' own infrastructure when people lose faith in the currency.

You can dream up many a scheme where it can happen, and renting hash is certainly a problem down the road for many coins, but you're exaggerated presentation of the 51% attack is clearly flawed and stemming from your simple understanding how the network reaches consensus.

If you own 51% or more of net you may double spend as much as you like. Essentially you get to print money for yourself, while screwing over someone.

Sure, you might fork it, but nothing prevents previous 51% mining rigs from taking over the fork.

Bitcoin like any p2p tech relies on concensus. Which is fine when it comes to torrents, less fine when it comes to online games, and downright catastrophic when it comes to money.

No, you do not get to print money. The value of Bitcoin, for example, is what people are willing to trade it for. You cannot stealthily sustain a 51% attack and will therefore be devaluing your equipment (you are the most invested person in the network likely by far).

There are cases where this isn't true. If you are able to rent the hashpower then you can 51% attack without worrying about equipment devaluation; if there is an equally valuable coin which uses the same hash function you could migrate to it after. These are somewhat unlikely; Why would one ever rent out 51% hash? Gaining 51% hashpower is extremely expensive and relies on the network community not reacting to it.

But lets say the unlikely happened. If I hold Bitcoin and I understand that someone holds 51% hashpower by credible reports of malicious re-orgs, I simply do not send. At this point I would wrap my tokens onto another blockchain if I needed to send them and wait for a solution. Its certainly not catastrophic, and the majority of people on the network will not lose their coins. The community reaction greatly hinders profitability of an attack. Its also very unlikely - not a significant concern, but also not an unsolvable problem should it become one.

Hope that clears things up for you.

99% of the foundation of crypto seems to be grift. Just waiting for the bubble to pop when they run out of suckers. Lets see how much their ugly JPEGs are worth then.

Which is important if you’re talking about whether lay people should buy random crypto. It’s totally irrelevant if you’re talking about the potential of the technology.

Any genuine potential is totally obscured by the grift and the hype that comes with it.

If that’s true for you then you’re probably better off staying away from it.

The author makes a great case for creating protocols such as http and xmpp and the like, which as protocols, are decentralized already.

Why add magic number guessing for financial gain to something like a photo sharing platform?

Maybe your answer is micro transactions, but then how do you protect consumers from fraud and abuse with reversibility and dispute resolution? This seems like a feature and not a bug of our current financial system.

Things like Patreon and Kickstarter exist already and seem to do a fairly good job of this. Why do we need all of the downsides of cryptocurrency to do something that already works well for billions of people?

How many people use MANGA services despite open protocols allowing to build open things?

I'd say, protocols being open isn't enough. Something seems to be missing, otherwise centralized services wouldn't have won.

> Maybe your answer is micro transactions

Micro transactions have never and will never work and the reason has nothing to do with technology. There is a mental cost to assessing a purchase value, and that cost is relatively fixed. People don’t want to go around having to think “oh should I pay 25 cents for this? how many other 25 cent transactions have I made this month and what is my budget?” They would rather make one decision to pay $10/mo and consume as much as they want.

Not arguing for or against but micro transactions absolutely work precisely because people can be more happy to spend $1 ten times in a month than $10 in one go because the $1 is a less scary transaction than $10 a month, which if you’re not wealthy, can be a significant choice to make [0]

Plenty of data around how successful this model can be (at least for the company) [1]

[0] https://www.tuw.edu/psychology/psychology-behind-microtransa...

[1] https://en.m.wikipedia.org/wiki/Microtransaction#Impact

Ok, so how is this remotely the same as PCs being cheaper? Well because to some people this matters a great deal. Why? Because much of the power held by large companies (and by governments) comes from the fact that they operate and control databases.

What a naive and short sighted world-view this is, it's almost grotesque. No company or government derives its power from holding a big database. By the same argument it would follow that Venezuela must be a really wealthy country because it's got lots of oil. And it's the same kind of argument as saying Stripe or Paypal or some other Fintech got big because they had the idea of "enabling payments on the internet".

Power is derived from getting others behind a cause and then executing on it. That's it.

"executing on it" is doing a lot of work here, i.e. it requires resources, political connections, etc. But ultimately you're right, and this is what "Web3" believers always miss. A technology alone is not going to bring about the change you want to see. Absent the associated "execution" (which often requires political action), a new tool/tech will be adopted if and only if it serves existing power

Web3 is 'the future' if you're invested in crypto.

If you're not (or have been and got out), then it's nothing but the delusion of a sect of believers who want to wish it into existence.

Being invested fundamentally changes the way people think and allows them to come up with any justification for their investment. It's not just crypto, but pretty much everything else where people expect easy returns at the expense of other people, nature, other countries, the future, etc.

There is nothing special or magical about this technology. Just because it uses an immutable data structure called 'block chain' and cryptographic hashes left and right, doesn't automatically make it useful or needed. In fact, the opposite is true due to the POW being a race to burn as much (mostly) coal for the benefit of very few.

The fact that the vast majority of crypto enthusiasts, who have absolutely no idea how it works and what it represents, decided to part with their fiat in the hope that money grows on Merkle trees and pushed the price to astronomical levels does not validate the technology itself, but rather is an example of human psychology and greed at work.

I hope the whole crypto delusion crumbles as quickly as possible before it takes down the whole world economy with it. Or maybe that is exactly what must happen so that the world wakes up to reality. Maybe that is the whole point of it.

For fairness then I think we should consider that everyone that is anti web3 and has no crypto might have too much Google and FB stock according to your logic?

Or simply sour grapes. He is right that your investments cloud your thinking, but maybe he doesn't have enough experience to understand that the desire to see the price go down against something you decided to never buy, or recently sold, is driven by the same bias.

For context, I've been an early bitcoin core contributor and paid 7.5 btc for this old laptop. In all fairness, I've only profited from btc and am still invested, but it doesn't change the conclusions I've had to accept.

I stick to the index funds. I have no idea how web3 shenanigans affect me. I still haven't seen a comprehensible use case for it.

All good reasons not to get involved. But I don't think that's as cogent an argument to convince others despite it being used as such on this board quite often.

why? it's not a binary choice

Google and Facebook will simply adopt web3 if it takes off (see Facebooks existing attempts). So maybe, but less so

Exactly. Recentralisation is under-appreciated by the decentralists; decentralisation is not a magic dust, and almost all decentralised services are made more convenient by intermediaries .. who will tend to consolidate. See e.g. OpenSea for NFTs.

If you've been following crypto currencies' history, you'll be aware that weakly decentralized (read: centralized) attempts always fall prey to decentralized protocols. The underlying principle is that a process controlled by nobody is more anti-fragile than one directly controlled by a few. Control is a liability.

Over the long term, protocols outcompete hosted services. E.g. Automated market makers will be much longer around than any centralized exchange like e.g. Coinbase.

> Over the long term, protocols outcompete hosted service

The exact opposite happened with email

Both Google and FB have a clear value prop. Web3 and crypto don't, which is exactly what the poster was criticizing.

They don't according to you and the author, but others think it does have value, which makes your point moot also.

People say that, but almost everything brought forward has non-crypto equivalents that are likely superior, and don't involve the opportunity cost of burning large amounts of fossil fuel, and redirecting huge amounts of valuable compute resources towards merely sustaining it.

Maybe someday some clever smart contract thing will really take off; and maybe someday some non-PoW coin will really matter, and maybe one day all the stabilizing regulatory infrastructure will be replicated for that hypothetical coin. It could happen. But it hasn't happened yet; so far it looks more like a ponzi scheme. And even if the tech really does evolve into something truly valuable, the route to that promised land could still have some surprising ups and downs, and if coins really continue growing, real-world economic pains along the way. Also - the tech behind it all isn't the same thing as the specific instantiation of todays coins. Even if the tech finds a niche, todays coins could still turn out to be a ponzi scheme.

Thanks for describing how web3 will succeed that's not based on "number go up"

It's because you're comparing a company to a category.

If I were to say that Coinbase and Uniswap have a clear value prop but AI doesn't, it also wouldn't make much sense as I'm not comparing apples to apples.

Parent made that comparison, not I.

I'm the author of the parent comment and I haven't compared FB to e.g. a category like web3. Re-read it. I pointed out the unfairness of assuming that "everyone arguing for web3 is an investor" while simultaneously ignoring that anyone opposed to those ideas may have investment-bias too.

E.g. HN is known for being anti-crypto but suspects anyone pro crypto to be a crypto-invested shill.

But then at the same time I think it must be considered that e.g. anyone being anti-crypto also has a stake or interest in non-crypto related endeavors. I doubt there are people on here without some form of stake simply arguing for "the universal truth".

For all your trivia recitations you failed on a crucial point.

> POW being a race to burn as much (mostly) coal for the benefit of very few.

POW is a consensus mechanism that secures the entire Bitcoin network. At times that has represented over one trillion USD worth of value. The benefit of Bitcoin's consensus is to all the money locked up in it, without it, or even if the profit to hack Bitcoin were only slightly marginal, the whole thing would fall apart, almost one trillion in value.

It is not for the very few that consensus mechanisms reward, it is for the whole network (in the ideal case). So in a way, when Bitcoin is driven to astronomical prices, and the incentive to break into it becomes irresistible to the most powerful people in the world yet they still cannot accomplish it, it does validate the technology.

The trillion dollars is a dream, it's not real.. Fugazzi.

Once the price starts falling, the scared 'investors' will get rid of it at any price to reduce loss. The network won't handle the load, so the price will drop even more. It happened before with BTC, where the 'billions' evaporated in hours, it will happen to the 'trillions'.

And the price will go up again after a great buying opportunity for the people who see the value of the technology. As has happened before.

What value do you think people see in Dogecoin, for example?

Funnily enough Dogecoin started as something completely antithetical to all the things about web3 'culture' HN hates the most. It was something to make fun of the venture capitalists wowing novices with buzzwords to part them from their money. I would say its now obviously overvalued considering the amount of money which flows there rather than to projects making real innovations. But then again, how do price a meme anyways?

Value resides where people believe it resides, and if 2021 has shown one thing, it is that the power of memes is practically infinite.

That being said, I don't own Dogecoin and my previous comment was mainly in reference to btc and eth.

That was not point. I feel it was fairly clear: Its not a dream when the hackers could turn it into 'real' money, which they easily could have (not all of it, but enough). But they couldn't crack into the pot despite the insane amount of honey right in front of them.

No sane attacker attacks the strong point. They go for the weak points. https://www.bankinfosecurity.com/crypto-platform-suffers-log...

(I wonder what happens if attacks are ever found against SHA-256 as they were for SHA-1?)

My most-paranoid self thinks that crypto is basically a giant cracking algo being tested out.

The article you linked refers to a centralized service being hacked to steal data - truly only related to crypto network security superficially.

SHA-1 exploits were found by researchers, if SHA-256 had the same forewarning protocols would initiate an emergency fork with a more secure hash function.

Do you think not being invested and watching the value grow 500x over the past few years leaves you embittered and too pessimistic to see the value? Or is it only the one side of the coin that clouds judgement?

I think it's both sides, but asymmetrically: I'm not being paid to not (re-)invest into crypto, and while I might make less than the true believers, there's an incentive to not be idologically skeptical (unlike some narratives, nothing stops banks, notaries, paypal etc. from simply absorbing crypto instead of being replaced by it, cryptocurency coding isn't fundamentally more difficult than other payment and distributed systems).

But if you are invested into crypto, you have a double incentive for delusion: you need to convince yourself and others that it will grow so it can grow and for the price not too collapse.All while having to deal with the temptation to cash out.

If real value is created, this problem doesn't exist as much. And of course, I might be biased and this might be a just so story, but I buy it.

> There is nothing special or magical about this technology...

I hope this is not the same thing as the 'use rsync' response when Dropbox was introduced. [0]

> I hope the whole crypto delusion crumbles as quickly as possible before it takes down the whole world economy with it. Or maybe that is exactly what must happen so that the world wakes up to reality. Maybe that is the whole point of it.

Right. Let us make a start rather than continuously talking about it since it is very difficult for everyone here to ignore it and we will see yet another HN post about cryptocurrencies, Web 3, etc.

How do we get rid of crypto entirely then? Stop everyone using it, shut it down and ban all of it?

EDIT: Good luck attempting to ban cryptocurrencies entirely. Either way, the undeniable trend in all of this is going towards regulations for cryptocurrencies.

It is not going away and we will still continue to keep talking about it and for many on this thread, it will be excruciatingly difficult to ignore it.

[0] https://news.ycombinator.com/item?id=8863

My big problem with crypto at the moment is that 99% of normal investors are just using exchanges. It’s like we’ve claimed to invent a new technology to replace rsync and it really does exist but it’s worse than rsync, and everyone who thinks they’ve bought in to the new technology are actually buying things from companies that claim to use the new technology and do genuinely have the ability to use the new technology but actually are using rsync 99.99% of the time. Or to put it another way - almost all the transactions are actually off-chain.

That doesn't necessarily change how exciting the tech is. The exchanges are working in an asset with known, predictable and locked-in inflation. 3rd parties (cough the US cough) cannot weaponize that asset against the traders. Inter-exchange transfers of wealth are relatively quick and trustworthy, even across borders without trusting any other exchange.

That is a pretty substantial change from any existing asset. It isn't all sunshine and roses, but there are a combination of properties here that never existed before.

there's no regulation, auditing or government backed guarantees / insurance on the exchanges.

so what happens when there is a run on an exchange, and it turns out that it does not hold the assets that it has on its books?

People losing all their money (in an entirely foreseeable way) is a tragedy. But it isn't new, that has been a show on repeat for millennia. This time, at least the losses will be in something new.

Much like how the first dot com bubble doesn't change the transformative nature of the internet, a massive crash in crypto isn't going to be the end of this story. We might outlive Bitcoin, but no-one alive today will outlive cryptocurrencies. The only real question is how much change they will cause.

It's better for society than our current banking system, because the government considers our current system "too big to fail," so banks know that the government will bail them out if things get too bad, and the banks engage in risky behavior accordingly.

That will always be true. Even with a 100% crypto world governments can use taxes/reserves/bonds/tariffs to prop up / bail out failing companies.

They just wouldn’t be able to use quantitative easing (easily - i.e. without global consensus) to do it.

Why not? Tether showed that quantative easing works just fine in cryptoland.

https://www.bloomberg.com/news/features/2021-10-07/crypto-my...

Tether is a counterfeiting operation.

Yes but banks are subject to a wide array of regulations, liquidity requirements and frequent third-party audits. And then, in crypto, you have Tether, whose reserves claims are dubious at best

Plenty of banks went bankrupt or were acquired, so it's not quite true that the government will just bail out failed actors.

https://en.wikipedia.org/wiki/List_of_banks_acquired_or_bank...

And of course the financial system as a whole is "too big to fail", but that would be true regardless of the implementation. Are you saying that if we switch to crypto then suddenly the financial system failing is OK?

Depends which exchange - some are US regulated eg. Coinbase, Kraken.

> there's no regulation, auditing or government backed guarantees / insurance on the exchanges.

I consider this a feature, not a bug.

> an asset with known, predictable and locked-in inflation

What's your definition of inflation, because by my definition Bitcoin experienced more than 100% inflation during this year, since which time it has experienced roughly 30% deflation.

There's going to be about 300k Bitcoin created in the next 12 months, and someone more motivated to care than I am could put some tight boundaries on that estimate if they wanted to.

If a bank is about to send me Euros, how many Euros will they get to create out of nothing in the next 12 months? I could probably make some educated guesses based on past rates; but there is a lot more certainty in Bitcoin.

Ironically given the price swings, the actual asset involved here is more stable and predictable than any asset that has ever existed in human history. That is going to matter somehow, although I'm not going to guess how. In a very similar way to how the internet making communication effectively free had (or; is having) far reaching consequences that were difficult to predict. This sort of never-before-seen certainty is going to have consequences.

land is a fixed resource, and new property is pretty predicable when you factor in planning law.

speculation in property and asset price inflation in this asset class has pretty much universally been a disaster for any change of a coherent, developing and fair society.

It's contributed massively to generational inequality, which has intern massively effected our politics. It's contributed to falling birth rates. It's facilitated organised crime both domestically and caused instability internationally . Plus every 20 years of so it completely crashes the whole economy.

indeed. the promised advantages include de-centralisation, on-chain, and no big financial institutions taking a cut or manipulating rates.

yet to practically trade in it you are back to centralisation, off-chain, and the exchanges taking a cut and manipulating rates.

and if it made any sense to use it as an actual currency, e.g. to buy coffee, then you are back to centralisation, off-chain, and wallet providers taking a cut.

Eyeballing the numbers on Coingecko DEXs seem to have a lot more than 1% of the volume (and this has been steadily growing). Further, most of web3 isn't about payments and where people invest and trade in them has little to do with whether those projects have potential.

Another interesting comparison is git and GitHub.

We invented a new technology to replace CVS/Subversion/SourceSafe/$CENTRALISED_VCS, and it really does exist, and it's better than all of those old systems partly because it really is decentralised, and it's also based on crypto(graphic) primitives, but 99% of the people who think they've bought into it are actually just using another centralised service all over again. Or to put it another way - when GitHub goes down a disturbingly high proportion of a) git users are unable to get any work done at all, and b) build systems just break.

(Ok, git didn't invent the DVCS. But it was better enough on a number of important axes than those that came before it - including "being used by a high-profile project" - that you can say that it made DVCSs happen.)

using git with github is still a DVCS. You can branch, commit, merge, whatever without access to the central repository. None of that was possible with the classic VCS - if the central server went down, you were stuck with your current working copy, or copying a colleague's state on removable media

> How do we get rid of crypto entirely then? Stop everyone using it, shut it down and ban all of it?

Govts around the world could start treating tokens and NFTs as just another kind of security. Bitcoin and Ethereum would also qualify. Free speech never allowed anybody to issue ownership in projects for future gains without satisfying the regulations.

https://www.seclaw.com/what-is-a-security/

I think 10-15% of the web3 bag is potentially a good idea to do what Dropbox did to many parts of society. Constant, transparent, ubiquitous tracking of shit. A task no one wants to do but causes a lot of friction.

> I hope this is not the same thing as the 'use rsync' response when Dropbox was introduced.

Because, invariably, everything crypto is "the next big thing". And not, you know, Theranos. Or Google Nexus Q. Or AT&T's ISIS mobile wallet. Or...

I think it's feasible to define "proof of waste" in a way that makes it possible to ban it, in the same way and the same rationale as you can't sell inefficient vehicle engines or lightbulbs.

Anonymous/pseudonymous money, unregulated securities, gambling, etc. are already on a collision course with regulators who are largely unable to keep up. On the other hand, I don't think the problem is big enough to trigger massive action yet, it would have to be on the scale of 1MDB.

"Just use rsync" have the same problem as "don't use Discord". The alternatives are way less convenient, not as polished, not as pleasant. Thankfully there is nothing convenient, polished or pleasant about using crypto other than going around regulation.

The difference was that "use rsync" was several steps specific to Linux that required some knowledge about how it all worked.

Vs.

Signing up for Dropbox.

Using any crypto is more akin to the "use rsync" side of things as there are several steps you have to perform before actually getting to the asset.

Vs.

Paying cash.

I think crypto in general has run into the same problem Uber/DoorDash/Airbnb and other similar "disruptor apps" have, but much sooner: Every seemingly stupid rule has a reason.

The cab industry operated as it did because it already ran into the problems Uber faced. DoorDash is finding out exactly why these restaurants did not offer delivery in the first place. Airbnb is learning a lot about why the hotel industry works as it does.

Crypto/DeFi enthusiasts are learning that maybe a little less De would make the Fi more plausible.

Dropbox did the same thing rsync did but made it so simple that my grandma who barely understands the difference between single and double click could use it. There's a clear value proposition there.

web3 so far mostly makes things more complicated. My grandma (still going strong) is not going to figure it out.

>> Web3 is 'the future' if you're invested in crypto.

While investors for sure talk and promote their bags, I do think this statement of yours is overly cynical and ignores the fact that professional educated investors also invested in the first place because they truly believe it is the future.

A16Z and USV, for example, could certainly be wrong about web3. But they are both some of the best early stage investors of all time, and have consistently had a thesis about the future, bet on it in face of ridicule, and been proven right in the end.

I frankly think both A16Z and USV genuinely believe in the future of this technology, and betting billions on it reflects that, and is not some cynical pump n dump scheme.

And given their history of being correct versus the average HN commentator, my money is on them being right.

But surely one of the hallmarks of VC is to bet on multiple possible futures, only a minority of which needs to have a large payout? You could coherently believe that the web3 future is only 15% likely to arrive, but still justify investing in it -- and then once you've put in the money of _course_ you want it that future to be realized, and so you may as well act in ways that support it.

I just find it a little concerning that there are people out there, who are blindly following this Web3 "trend" by spending their money on digital "art".

For the average person, there is no real use for Web3 because there is no actual definition for it.

My impression is that Web3 is being praised as decentralized, yet it is people with a lot of money who are the one's regulating the pace right now.

And that is a tad bit concerning to say the least, because if I invest millions into something (whether as an individual or a VC) - I'd like to feel a sense of "ownership", otherwise that money could have been spent helping real causes.

I'd go as far as saying that for most people, including those entrenched in spending their hard earned money, the word Web3 is immediately associated with NFTs, not the actual blockchain technology. And that says a lot.

I'm not at all convinced that "web3" is positive.

But when people say things like

> otherwise that money could have been spent helping real causes

It bleeds their personal opinion and hampers the debate. Apperently you think "digital art", or cryptocurrencies are not a "real cause". Which begs the question: who defines what "a real cause" is? The International World Causes Committee?

Isn't anything that people want to spend money (resources) on by definition a real and worthy cause to at least those people?

I'm talking about ownership, more specifically - market control. I don't care about "Web3" if a handful of people/companies are the one's controlling its growth.

It's so stupid it actually hurts my brain just to type it.

Who are these handful of companies that you believe control web3?

Andreessen Horowitz, Sequoia Capital, Coinbase Ventures, Paradigm (founded by former partners of both Sequoia and Coinbase), Solana Ventures, and surprisingly quite a few Facebook alums (Anthony Pompliamo, Chamath Palihapitiya)

I think that, as with any debate, “worthwhile causes” cannot be defined so absolutely.

I know people who “want” to spend money on addictive and destructive drugs, because they’re continuously compelled by a pathological chemical imbalance to do so.

Does that mean an addiction to heroin or Xanax is a “real and worthy cause”? How about an addiction to online gambling with generative art of monkeys/lions/pixel art?

There's far more innocuous examples, such as french fries and soda and sweets. Is it a real and worthy cause for someone to create a restaurant that serves junk food? Junk food that causes diabetes and heart disease?

Apparently it's okay to be Coca-Cola or McDonald's or Mars. Those are real and worthy corps blessed by boomers of yore.

If someone is addicted to gambling, there are plenty of casinos which are also worthwhile businesses apparently. Legal in many states, nations and territories.

Again, none of this can be defined so absolutely. That is my point. And all of the things you mention are already regulated (gambling, etc.), or under consideration for regulation (such as New York City banning soda [0]).

I'm not saying that I'm for or against these regulations, but obviously there are boundaries where society needs to intervene, in one way or another. Portugal handled their drug problem in a very innovative way [1], and that's my preferred modal for ending the "drug war" (decriminalization and support for addicts). But it's still some form of regulation.

[0]: https://globalyouth.wharton.upenn.edu/articles/big-gulp-new-...

[1]: https://www.apa.org/monitor/2018/10/portugal-opioid

> Isn't anything that people want to spend money (resources) on by definition a real and worthy cause to at least those people?

No, not if they’re being misled or scammed, or simply making financial decisions under wrong assumptions about outcomes. Just some examples.

Not OP but no. If someone buys in to a multi-level marketing scheme and starts peddling weight loss pills on Facebook, they certainly have spent real money on that and yet it is not a worthy cause because their only expectation is profit. NFTs have the possibility that the buyer is just genuinely a collector with no concern whatsoever for the value of the asset, but art collection is largely a financial venture. Not to mention that this simple art purchase contributed to higher gas fees for everyone else - why should we have to suffer just because you purchased something? - I don’t consider that a worthy “cause” at all.

In this space, you can donate to the EFF, sponsor open source projects, use services with subscription models over advertising models, donate to charities expanding internet and computing access globally, etc. which are all more “cause worthy” than buying digital art alone.

Publishing a website is not permissionless. You have to get a public IP address and register a domain name with an ICAAN provider, and various ISPs have the power to block your site. Actually promoting your site, scaling your site, integrating with common services, require more centralized servers, they're just just more implicit and you can choose from multiple providers (e.g. AWS or Azure). But you can choose to post to Facebook or Twitter.

The problem isn't centralization. It's centralization through a company which exerts too much of its own influence and censorship and monetizes your usage for its own benefit. Plenty of centralized databases allow free speech and don't seem to monetize your data: look at HN or if you're more radical, 4chan.

Idk if all centralized services are doomed to be corrupt so decentralized is the best we can do, like all monarchies are doomed to be corrupt so democracy is the best we can do. But unlike monarchies that hasn't really been shown. Maybe if someone invents a more efficient way to serve decentralized data the web will transition, but until then most decentralized services are most useful only as a backup to centralized services.

End of day you have to deal with physics. All those bits have to be stored somewhere. Have we really reached the point where the Facebook database can be stored in a distributed system across personal devices? Hell no! As a matter of fact, being centralized, FB can store that amount of data more efficiently than any Blockchain can even dream about.

A constant crypto-person refrain seems to be, essentially, “technology X was quite bad, yet hyped, at first (there is a tendency to overstate the badness), and then took over the world, therefore crypto-stuff, which is quite bad, yet hyped, will naturally also take over the world.”

Counterpoint: remember 3D TVs? Or those chatbot things that briefly received all the VC money a few years back?

It's a rule of mine to avoid any financial area that looks, acts, and talks like a mania after reading Charles Mackay's "Extraordinary Popular Delusions and the Madness of Crowds (1841)," which I discovered at random in a strip mall bookstore in Rhode Island. Reading it saved me over $300,000 dollars before the dotcom crash because I sold everything and got out (my timing was very lucky.)

Crypto, NFT's, blockchain & web3 are currently in a mania phase so my 2022 resolution is to aggressively ignore them so I don't get sucked in before the inevitable correction. I can't afford to be stuck with a pile of tulip bulbs.

> Reading it saved me over $300,000 dollars before the dotcom crash because I sold everything and got out (my timing was very lucky.)

Are there not other books that you could also read that would tell you to buy mutual funds tracking a broad market index, hold, never sell, no matter what? aka don't time the market

Buy and hold is a good strategy if you never need to touch the money. However, life happens and I got divorced, so I had to hold on to my profits or be left with nothing.

It's yet to be determined if a buy and hold strategy is a good one for crypto. I am aware of the price rise since 2012 but as the old adage goes "trees don't grow to the sky." Trees built on wild expectations and promises of glory, like were made before the dotcom crash (the internet has rewritten the rules of the economy!) seem to me to be more likely to topple over than keep growing taller.

So what you are saying is that the internet should be built on a model where people can upload children pornography or propaganda from state actors and nobody can do anything to stop it? Thanks I pass. I'm also curious about how to provide distributed storage that competes with google in terms of size, reliability and performance.

The fun thing about cryptography is that allows building internet services that can beat the blockchain. There is nothing preventing you from creating a service where people upload encrypted stuff that is only associated to a key id. In fact there are already services that kind of do this.

Why consider data redundancy the use case at all? If you really care about a file you could always back it up on multiple local drives and email it to those who want it - that's not what Web3 or crypto is about. Its about the storage of valuable data i.e. data whose integrity holds a lot of value: Public keys, account balances, etc.

I'm interested in culling the superfluous aspects of crypto, heaven knows they exist, so if you want to be involved in helping with that you should first become more competent on the subject.

If Web3 is built on blockchain, do people (miners per se) need to download the whole _internet_ in order to keep it decentralized?

That vision of Web3, "Just put everything on the blockchain" is doomed to fail and I don't know anyone who ever seriously proposed it.

Blockchains are best suited for data subject to manipulation, i.e. data in which there is profit to alter. If we were to naivly build "Web3" in theory with this in mind, then the majority of activity would be peer-to-peer, federated, or partially centralized, while the exchange of security credentials would take place on an efficient broadcast layer.

The trick is to do as much off chain as possible - and if trust becomes an issue, develop a minimally on chain scheme. Its still early days, if you ask me how exactly this looks in 20 years I couldn't tell you.

How do you develop a minimal chain scheme for increasing trust? As in, do you first get people to your website and then ask them to contribute in decentralization by downloading the chain?

Bitcoin cannot work without people noticing and liking Bitcoin. If it didn't get traction, it'd still be centralized haha - only one entity would have the whole chain.

Not sure why you’re downvoted because this is a legit question. Even if web3 is build on a large number of blockchains, you still need whole blockchains downloaded in order to be trustless. Currently probably only a tiny percentage of crypto users have downloaded whole blockchains, and instead defer to third parties.

Exactly, the chain would increase indefinitely begging 2 questions: - Who would even want to keep it? - Is using blockchains even worth it? Like, if you defer the download to third parties - isn't it again being centralized?

This is a common misconception. Web3 mostly exists off chain. Storing everything on the blockchain would not only take a lot of space (and thus be extremely expensive) but also be horribly slow. Web3 apps generally use the blockchain more as an audit log. There's a reason most of the web3 apps crypto believers give as examples for web3 apps that actually work are trading apps.

FWIW I think most people base this of a misunderstanding of how NFTs work based on the claims around it: NFTs prove ownership of a hash. That hash is associated with a URL. That URL points to a JSON document. That JSON document points to the NFT art piece (i.e. the "JPEG"). If the service hosting the JSON document (or the service hosting the art piece) goes away, the hash becomes a simulacrum, an identifier with no identifiee. It still indicates ownership but only to those who already know that this is what it does. There can be JPEGs on the blockchain (and allegedly there is already CSAM on at least one of them) but due to the size constraints this isn't how things usually work.

This isn't even getting into multi-layer approaches which came about because while web3 is built on ETH, actually doing anything with the ETH chain is extremely rate limited and has extremely high transaction costs, so other chains have been built on top of it that as I understand it just bulk commit hashes of snapshots or something to it.

FWIW the "first you download the Internet" solution already exists and is called IPFS. There is also a solution called Freenet that focuses on anonymity and avoiding censorship. Predictably the biggest problem with downloading the Internet is that you unknowingly (or knowingly) start collecting illegal content like CSAM, which may be a serious crime depending on where you live.

So, is blockchain therefore even needed? Why should you even "first you download the internet" (or even a subset of it)? I just want to watch some cat videos.

Confirming data integrity and origin is already solved - thanks digital signatures and checksums.

The only thing blockchains add is a strict ordering.

So someone can now sign a message A saying "I give this picture to X" and everyone will know that any future message B from that person saying "I give this picture to Y" is "invalid" because everyone agrees that message A happened before B. Anyone who downloads the whole blockchain can see this.

Well, as long as everyone agrees to believe that blockchain.

In case my bias wasn't clear enough: no, they're a solution looking for a problem and right now the biggest problems they're targeting seem to be a lack of grey market money laundering and pyramid schemes.

The way I’ve heard it laid out is:

Web3 will handle IP address and DNS storage, sale, and search using basically NFTs on the blockchain. Meanwhile, HTTP content hosting will still be kept separate (maybe IPFS, maybe something centralized depending on the need).

Current example: NFTs typically store metadata on the blockchain and the content in IPFS.

> some proponents who present web3 as bringing about a libertarian nirvana.

What bothers a lot of us isn't the libertarian nirvana ideal, it's the fact that most loud proponents have a financial interest and stand to gain by increasing adoption, even if only temporarily. Even if they truly believe the technology is pointless and has no future, they are incentivised to pretend that it is revolutionary in order to increase the value of their investments so they can offload their holdings. This makes it difficult to trust anybody writing positively about cryptocurrency-related topics. It's like knowing a manufacturer pays people to write positive reviews about their product and then suddenly seeing lots of blogs and comments raving about how great the products are with little justification.

If you can separate the distributed database technology from the financial speculation then I will be a lot more enthusiastic about it. However, without the get-rich-quick aspect I suspect such a technology won't get nearly as much excitement overall. Mastodon and Diaspora are already working examples of decentralised social networks and this article doesn't state what advantage web3-based products would have over them and people generally don't seem very excited about them.

The standard you want is not reconcilable and you will simply have to find other signals to pay attention to.

The general idea amongst crypto enthusiasts is: no conflict, no interest.

So its not about just listening to someone and trusting them, its about having the tools to find something that works for a goal you have, within that ecosystem.

You make a good point, and you deserve appreciation for your ability not to confuse all of Web3 with the vocal majority behind Web3 right now - who I agree are empty salesman.

> If you can separate the distributed database technology from the financial speculation then I will be a lot more enthusiastic about it.

Tough pill to swallow for you: the consensus mechanism fundamental to Bitcoin and blockchains in general (assuming they are fully decentralized) is economic. It relies on block producers spending or staking their money for no profit if they lie or cheat. The tokens or coins associated with the network are the digital collateralizations of that money, and are therefore subject to shift in valuations relative to anything else you might trade it for.

Crypto is inherently financial as long as its consensus mechanism is economic - that is not a bad thing, but it should inform how communities interact with the topic. Despite believing in crypto, this is why I believe some spaces should not consider it polite to talk about specific crypto-currencies versus others, as it quickly deteriorates into shilling of one's own holdings. This is the same reason novice's can't reliably make money in the market - since everyone advertises coins/tokens they hold as the next coming of Jesus, the only productive way to make decisions about which are good or bad is to not only have a deep understanding of them but also their context in the market as it is currently. Even then you might fall victim to the 'clown market' when hype trumps fundamentals.

Long story short crypto-currencies are inherently economic and therefore financial and subject to price fluctuations which attract speculators. This does not make "crypto" a scam, but it does mean that novices have little recourse for understanding the space sans becoming more independently competent or having a trusted advisor.

It misses that Tim Berners-Lee and early internet architects perhaps were thinking of decentralised and also peer-to-peer in the same way that web3/crypto guys do. What TBL had no interest in was the container (DB or server, whatever). Some 20 years later Tor people got interested in the decentralised and redundant storage for HTML and IPfS for files. So this is kind of… already invented. But not anywhere near to mass adoption.

While I agree that FB, twitter and alike are just big content holders and providers, I cannot agree that vast majority (of users) even understand the implications or care to go decentralised and redundant (in respect to content).

So it seems the appeal of the so called web3 is still very weak. And btw It’s not even a web, really. It seems to me rather an extremely bloated approach to ‘torrenting’ assets. And extremely energy-pricey.

Well, where are the killer apps?

Where are the mass usage use cases beyond "get rich quick" schemes?

We have had the technology for years and all we got are NFC schemes, speculation and hot air.

Absolutely agree - any technology is only useful if it solves a problem.

IMO, Blockchain/Crypto seem to come from a perspective of "how can we apply blockchain to X?" rather than asking "What problem are we trying to solve, and what requirements would any solution need to meet?" BEFORE deciding what technology options there are which could solve it.

Pitching 'Web 3' as a technical solution rather than solving a problem inevitably leads to 'when all you have is a hammer, everything looks like a nail' (which is my personal opinion of the whole crypto space).

And what of any hidden nails which there was previously no motivation to search for?

Well you don't look for ways to use nails, you try to work out what you want to build first and then use nails if they are the best tool for the job.

i.e. work out the problem you want to solve, then see what the right technology is afterwards.

The phrase is "when all you have is a hammer, everything looks like a nail." We can stretch the analogy but I'll reiterate my point literally:

Longstanding problems do not have bootstrap solutions, i.e. they are longstanding because simple hard work and known strategies could not solve them. To think that you can go around looking at longstanding problems and come up with solutions top down is out of touch with how innovation drives technology.

Innovations are small miracles - there is no formula for them, they don't come around often. When rare advancements are made it makes sense to test what good they can do for problems which do not give way to the old toolset.

To put it back in the analogy: When you invent a hammer to drive nails, check and see what else it might be good for.

You may not like the over extension of applied crypo currencies, but nobody is forcing you to invest in any of it. I for one would rather have experimentation with failure than none at all.

> To put it back in the analogy: When you invent a hammer to drive nails, check and see what else it might be good for.

This is exactly what I disagree with - It's generally a bad strategy to look for things to apply crypto/blockchain to in my opinion, we should be looking for problems and defining how we want things to work in the future, and then seeing if crypto is the right technical solution to achieve that. I.e. we shouldn't start with the technology and work back to what problems it could be used to solve - this will end up discounting technical solutions and solutionizing before requirements are understood.

We don't do this for other technologies - for instance it's just as valid that a NoSQL database could solve an issue, however we don't go around looking for problems NoSQL databases could solve.

There's a distinction that we're talking past each other with, as evidenced by your NoSQL example. NoSQL is not as much a discovery as distributed consensus is - its more of a forward step in database technology (down a certain branch).

Distributed consensus was not all that incremental nor precedented. Its not quite something that was imagined much before it was around in any fine detail. Considering how novel the innovation was, and how out of the blue it came, it makes sense to consider it more a 'new' thing that may have applications not easily thought of.

I'm sure in the smaller domain of databses NoSQL has been discovered to be useful for businesses or processes after its invention.

The point isn't that Blockchains are or aren't more novel than a NoSQL database - it's that both are technologies and not a solution to a clearly defined problem.

Basic solution design says start with a problem that needs to be solved and understand the key requirements, and then decide what technology best matches the requirements. That might be blockchain, or it might be something else.

Asking 'what can we build as a blockchain' is poor engineering, lazy thought process and symptomatic of a technology bubble IMO.

This is technical wishful thinking, or an abstract tech, if you wish.

In the old times we called this "a solution in search of a problem", but these solutions are imaginary.

This, probably, hints the the top of a couple of bubbles.

Web3 is nothing but an echo chamber. A very empty echo chamber, so it echoes pretty nice. I'm back to the world wide web.

There are actually two rooms. A big one full of people who barely know what a data structure is, yelling about whether or not Web3 is a Ponzi scheme. And a much smaller room where Engineers are actually building things.

As if that somehow confers value or usecase. Most engineers I know think web3 is beyond stupid.

> where Engineers are actually building things.

These things have names. Web3 is a name without being a thing.

> Web3 is a name without being a thing.

Then it’s just as meaningless to argue against it as it is to argue for it.

Exactly! You get the point.

"A blockchain is a worse database. It is slower, requires way more storage and compute, doesn’t have customer support, etc. And yet it has one dimension along which it is radically different. No single entity or small group of entities controls it ..."

No, blockchain in itself doesn't mean it's not controlled by a single entity. There are many permissioned and private blockchains:

https://www.foley.com/en/insights/publications/2021/08/types...

It misses the point of why PC's were adopted, which was spreadsheets. No-one put a PC on your desk because you needed a PC. They put a PC on your desk because you suddenly needed to be able to use a spreadsheet to do your job [0].

And the reason we all got internet connections in the mid-90's wasn't Web0. It was email. Web0 was a toy thing that only us geeks played around with, that came free with your email account. All the "serious" stuff that we use the web for now was in the walled gardens (CompuServe or AOL).

Web3 needs a "killer app" like email or spreadsheets. Still not seeing one.

[0] Source: I had this happen to me. Working a desk job as an admin clerk in a transport company, and suddenly our monthly budget/financials had to be sent to head office in Lotus 123 instead of paper. So I got a PC (286, 4Mb of memory woot!) and learned Lotus 123. Fun times :)

I agree: There is no killer-app from the perspective of a first-world citizen.

For low-wage workers in developing countries the killer app is play2earn gaming.

Admittedly I’m not very well read on the whole play2earn. However, I think the article posted on hn the other day about it makes a pretty compelling argument that it’s a Ponzi scheme.

Article: https://paulbutler.org/2021/play-to-earn-and-bullshit-jobs/

Strongly agree :)

Why does play2earn require (or is made much easier by) crypto? I'm missing a step in the logic

I'm not an expert on it, but I think this refers to the various "things" that can be bought/owned on various metaverse type environments. People from first world countries are able to buy these things since it's easier than "earning" them. People from developing countries can then do the earning part for them, and sell what they've got on various NFT marketplaces, for desperately needed money.

Why crypto is needed is because that is the tech that makes it possible for Player A to actually own Thing X, when Player A sends money to Player B who actually spent 8 hours playing or doing in order to earn Thing X.

There are a few of these examples starting to gain steam like Axie Infinity[1] for instance. Although I suspect FB & Roblox are going to really go all in on this soon, if they haven't already. And their user bases are enormous.

[1] https://axieinfinity.com/ (click on their marketplace link to see for yourself, the prices are crazy)

You can build a marketplace without crypto, though. The question is why crypto is an important enabling feature. E.g. would Axie Infinity be as successful if it simply let you buy/sell assets directly? (Putting aside any of the surrounding discussion of pyramid schemes; I'm not really interested in Axie in particular, more how the concept is supposed to work)

I am also unsure as to how crypto benefits ownership of assets (eg "Axies"). I looked into NFTs recently, and (to my very simplified understanding) there seems to be:

Asset <-> Token <-> Blockchain

where the <-> are links of some kind. I understand that the T-B link on the right is secure and uses all the fancy crypto stuff (smart contracts, whatever) . However, the A-T link is less clear to me.

Concretely, if you 'own' a Pokeman/Axie then that is the T-B link, but what links the Axie to the token? A URL/URI? So where is that stored - in a database somewhere?

It all seems very suspect, but maybe I'm missing something.

I think the bridge into the financial system is the value. In theory, any game could create a way for you to "own" a rare item, and maybe even trade it within the game. But then how do you transfer ownership with a guaranteed exchange that can be cashed for fiat? The exchange would require us to trust each other, and I would paypal you the money? I think the NFT serves not only as the proof of ownership, but the chain of ownership and the escrow as well.

Oh, Axie Infinity. They're a Ponzi scheme in the crash phase. Their players grind to earn Smooth Love Potion tokens. Here's the chart for SLP.[1] Down over 90% and still crashing. There's also an Axie Infinity token.[2] It's only down 34%. There's some kind of 65-month (!) vesting period with that token.

Don't hold Axie Infinity up as a success.

No, Roblox is not getting into NFTs. They're planning on having no-copy transferable items within their own ecosystem. Second Life has had those for years. They're a minor portion of the object market, especially since SL got rid of gachas ("loot boxes") for regulatory reasons.

The main use of NFTs that makes any kind of sense is monetizing popularity. It's a new form of celebrity merch. This is great if you're a celebrity, but not otherwise.

[1] https://coinmarketcap.com/currencies/smooth-love-potion/

[2] https://coinmarketcap.com/currencies/axie-infinity/

>Don't hold Axie Infinity up as a success.

It's pumped millions of dollars into poor areas in developing countries. I think they would consider that a success. Remember, they're not investing in these NFT's, they're utilizing them to extract wealth from collectors/investors in the west. So for them, yes it's been a resounding success.

>No, Roblox is not getting into NFTs.

Not only will they get into NFT's, when they do they will have the largest marketplace. I don't own RBLX, or any NFT's, but the writing is on the wall. The Metaverse(s) are just getting going.

It's pumped millions of dollars into poor areas in developing countries.

That money comes from the poor suckers who are grinding away, buying Axies and hoping to make money. This is zero-sum, remember.

>That money comes from the poor suckers who are grinding away, buying Axies and hoping to make money. This is zero-sum, remember.

If you're poor, you're not buying those shitty tokens. The poor are the ones selling the goods for the tokens, which are purchased by people with enough disposable income to spend on digital "things".

If you have $100 to spend on an outfit for your avatar in some game, I have no problem if some family in the Philippines gets o eat for a month as a result.

1) It enables users to own their assets regardless of the state of a centralized server. 2) Standardized format to trade on any third-party marketplace. A player could sell to an investor who has no intention of playing.

Thanks.

2 mostly makes sense to me--ownership can be managed independently of the game, and without a bespoke integration with that particular game. I do wonder a little how important being able to turn game assets into general-purpose instruments is (meaning, to the success of the game), but I can see how it expands the market and in particular how it makes it harder for the game company to manipulate that market, which makes the assets more reliable.

I'm not sure I understand 1 though. Don't the assets only have value in the context of the game's mechanics, which _are_ centralized? Like if the game decides your bag of holding no longer holds anything, or even to simply ignore its existence, does it matter that you have a token asserting your ownership of the bag? In theory, the token could have value as a token outside the context of the game, like a meme stock or, uh, the current price of Tesla, but that's true of anything tradable.

Regarding 1: Sure the game itself is centralized, for example Axie Infinity might even ban players who "cheat" according to their definition of cheating. So if you are a bad apple or get banned without justification, then block chain won't help you.

If however (some years down the line) the original game creator abandons the game, any group of people could jump in and revive the game (by re-creating or updating it or doing something completely novel) based on the state that is still available on the block chain.

That's a nice property, but it seems like only a marginal benefit to Axie? Something like, players are more likely to invest money and energy into the game if there's some chance their assets' value will outlive Axie, thus slightly reducing the risks to their investment. Seems like that would be a small effect, or am I missing something? I guess what I'm trying to understand here is how crypto is a big game changer.

Thanks for the discussion in any case.

The bargaining power is much higher on the user site. "I did not like the new feature. Take it back or we throw together some money to build a competitor. We already have all player data, it is on chain."

Play2earn gaming is just a disguised ponzi scheme 99% of the time.

It's a closed loop system so the only way for people to earn money is to get it from other gamers. And gamers aren't going to throw money at these games when they could play a better "centralized" alternative.

And the reason why non-pay2earn alternatives will always be better is because non-pay2earn games are much cheaper because they only need to pay the game devs while pay2earn games need to pay both the game devs and the freeloading "earners".

I always like to imagine how we will look back onto subjects 5 years from now, which helps to come up with more precise terminology and potential perspectives:

"Generation 1 of play2earn gaming popularized in 2021/2022 was based on an ongoing influx of capital and generated profits only in the form of its redistribution. This changed when ... "

> play2earn gaming

Where does the real economic benefit come from in this? "Paying people to play games" cannot possibly scale beyond the existing gold-farming niche. It's also something that historically games have tended to ban.

You asked for the econ perspective, so prepare for some darkness: When judging the economic productivity of the lowest class of wage workers the usual expectation is negative. Violent crime and substance abuse leads to a huge cost in terms of medical care and law enforcement.

If you have a way to keep them busy and earn esteem without hurting anybody, that's a huge economic benefit.

>> For low-wage workers in developing countries the killer app is play2earn gaming.

Farming resources in MMORPGs was happening before cryptocurrency became popular:

https://en.wikipedia.org/wiki/Gold_farming

The killer app is illegal markets, malware / ransomware payments, and money laundering.

The killer app sounds like a dystopian hell to me, wow work that is the epitome of pointlessness.

Maybe spreadsheets and email for business use but that's not why I and people I know got them - more to play around on.

The killer app for crypto / web whatever in reality is speculation. From recent US research "43% of men ages 18 to 29 say they have invested in, traded or used a cryptocurrency." Maybe it's not the sort of adoption you approve of but it's still adoption.

Speculation is training wheels for scalable direct democracy, and that'll be the killer app of crypto / web whatever.

No government would allow that.

Crypto will be illigal due to terrorism/CSAM/gambling/etc long before it starts threating ruling establishment.

That's true, but I don't think it being illegal will have any bearing on whether it later becomes a threat to the ruling establishment.

Disclaimer: I work in the web3 (crypto) space and have for a long time already.

I think the killer app for web3 is going to be a decentralized, open identity/auth solution. The idea that we use our email accounts, attached to huge corporations which siphon every detail about us for their advertising engines is absolutely absurd. I just want to be able to log in to applications and carry some of the simple data like my identity and what assets I have available with me, without having to pay for it by losing my privacy and autonomy.

Nothing in the web2 tech stack currently allows this.

Imagine being able to log in, securely, to HN, Twitter, your bank, et al., and with you comes basic data about how to contact you, how you pay, what assets you're holding, etc. You get to choose what you share, and you get to authenticate each transaction discretely. It's powerful and it puts that power in your hands, not in those of large corporate entities.

That's what I'm interested in, and that's what I work on. We should all want some form of that.

edit: glad the response to this was by people interested and curious. my usual feeling on HN is that people are hyper-negative about web3 tech. It's ok to be curious about new, cutting edge technology. That's what we're all here for, I think. Maybe the decentralized trend won't pan out. Maybe it is all a giant scam. Doesn't mean it isn't interesting and it doesn't mean that the people working in that space aren't legitimately trying to innovate.

>The idea that we use our email accounts, attached to huge corporations which siphon every detail about us for their advertising engines is absolutely absurd. I just want to be able to log in to applications and carry some of the simple data like my identity and what assets I have available with me, without having to pay for it by losing my privacy and autonomy.

Okay but instead of it being known to just say one company, anything on the block chain is known to everyone. I fail to see how that's any better or even remotely "powerful".

How does it feel knowing that you've signed up to 100 applications, which you use for everything from work to pleasure, and that that authenticating account can be taken from you at the whim of a company? Feels bad to me, man.

Couldn't someone just steal your token and you lose access to 100 applications?

No. It's not a token. It's an on-chain account verified by multiple permissions that are controlled by key pairs. It's based on EOSIO technology and is pretty robust.

How do you recover your account when you lose your keys?

You can’t.

Check out Vitaliks post on social recovery wallets https://vitalik.ca/general/2021/01/11/recovery.html

That doesn't address their concern, really. Threat models are personalized to everyone, and for a _lot_ of people, they choose Google/Apple/Microsoft and are fine with that company knowing their 3p logins - but wouldn't be fine with anyone being able to plug in their crypto address and see all the services they've connected with.

Although, i'm sure a blockchain identity service could be properly architected to keep connections secret - i'm eager to see if that ever comes to fruition.

On the other hand, a company providing the service can ban users for spreading harmful information. Imagine a situation where, say, the president of the US was spreading misinformation regarding a pandemic for example. To me it sounds good that there is some control to it.

There is no such thing as harmful information. Only actions can cause harm.

Do you think we should trust unaccountable corporate managers more than elected leaders to determine what is misinformation?

>only actions can cause harm

Disseminating information is an action. Also misinformation does not always contain information: Many times it's just a more polite way of calling something a lie, or simply wrong. Even when there is information, cherry picking which information to share can give the opposite impression of what more robust information would show.

The question of who to trust is a good one. The issue I have with the viewpoint that platforms shouldn't be allowed to make these decisions for their own platforms is that it takes away property rights by having the government mandate what can or cannot be done with privately owned property. Should people have the right to decide what people can do on their privately owned property? Businesses are allowed to make all kinds of rules about this, from dress codes to what they consider disruptive conduct. Limiting that ability seems problematic to me.

I don't have anything that I would consider a solution to finding the right answers or balance here, but I don't think we can ignore these issues.

> There is no such thing as harmful information. Only actions can cause harm.

Perhaps in some idealistic model of society this is true. However, in reality people cannot process and evaluate the factual basis of all information that is pushed on them. Otherwise we would not be seeing so wide-spread misinformation campaigning, fake news and conspiracy theories. Harmful information tends to transform into harmful actions (harmful here being subjective - there's often someone benefiting as well).

I don't have a clear-cut answer who should be determining what is misinformation. Also, I don't believe one bit that a free-for-all model is a good one, quite the opposite. Currently it seems that when someone clearly crosses the line, public opinion or perception forces the company to reconsider allowing the violator to remain on their platform. It might not be the most elegant model, but possibly the best we have.

I think this touches on the heart of such issues. Many people see a big difference between censorship and an obligation to follow certain rules. Others seem to view any rules as a defacto form of censorship. I don't think these positions can be fully reconciled with each other.

That is a valid concern. But in practice most of the sites which allow federated authentication support multiple providers, typically Google, Facebook, and Apple. I expect one of those will eventually ban me for wrongthink, but probably not all of them simultaneously.

To me, it seems the solution here is not to centralize into one identity for everything but the opposite: to distribute each account into its own identity. Software can then manage each disparate identity to ease the burden for the account owner.

> Okay but instead of it being known to just say one company, anything on the block chain is known to everyone.

Bitcoin != blockchain. Technology exists [1] to store data on the blockchain in a private manner without sacrificing its decentralized nature.

[1]: https://www.getmonero.org/resources/moneropedia/ringCT.html

But if you encrypt it so nobody else can read it then the big bad companies of evil will still need to collect your data individually - which brings us back to the initial point, but now with a blockchain for some reason

Companies are going to collect our data as long as they are able to use that data as an income stream.

I don’t have a Facebook account but I know they have data on me.

Yeah, and even if they can't sell collected data because we all agreed to just put them on a blockchain aggregates and whatnot will still be valuable assets. This isn't an issue that can be solved by technology. It will need regulation/laws and I don't see that happening.

But it’s different! Because blockchain!! /s

Unfortunately you acquire users by building what they actually want, not what they should want.

This is true and wise.

This is not incompatible with what the parent comment is talking about.

People want easy / seamless access to the services they use. If Web3 can find a way to provide that or improve upon the current hellscape of email based logins mixed with federated social logins mixed with the pain of maintaining 100 different accounts, it might just find a place.

But the people working on this need to focus on the user’s end goals and UX needs, and not just declare the problem solved once a solution is technically working.

> People want easy / seamless access to the services they use.

Free. People want it for free. Not free as in speech, but free as in beer.

History has shown that the vast majority of people will trade their entire personal data set if they can get fake internet points for free.

ABSOLUTELY.

Accounts and transactions are free on our network. We think eventually all networks will have to go this route. Paying per-transaction is mind-bogglingly anti-user.

Sure, people want things for free, but that is orthogonal to the simplicity angle. Something can be free, but won’t see use if it sucks badly.

People spend $$$ on Apple products because of the “just works” reputation. I’m not saying people want to pay for services, but I think it’s important to distinguish UX vs. cost when examining what motivates people.

> Imagine being able to log in, securely, to HN, Twitter, your bank, et al., and with you comes basic data about how to contact you, how you pay, what assets you're holding, etc. You get to choose what you share, and you get to authenticate each transaction discretely. It's powerful and it puts that power in your hands, not in those of large corporate entities.

That sounds interesting! How could I learn more about that?

> that's what I work on

What's your company?

Yeah... How do I get to choose what I share? How would it work for HN or Twitter? Do they have to support this? Where should they start to be able to support this? Again, how am I going to choose what I share? Who exactly has to implement it? I really need some details.

If we actually have to rely on Twitter implementing something like this, then I do not have high hopes, as they most likely would not want to implement something like this. :)

Basically, we have an oauth-like mechanism that sites can integrate. The user gets to control, from their side, what data they whitelist and share. Whatever they don't, they don't get to have access to.

You're right, though: this is a steep hill to climb.

Ultra.io is the company.

Web3 people need to talk about this more instead of all the FOMO scam bullshit they currently hype and which is tainting every reasonable human being against their ideas.

Because right now, given how long the community has had to work on the problem and we still haven't seen anything like what you're describing, I'm still inclined to believe that Web3 is all a bunch of bullshit.

I do. I run a podcast (https://anchor.fm/ultraio/episodes/EP8-Ultras-case-for-NFTs-...) and this is my primary concern: educating people about the real benefits of the technology. There's a lot of baseless hype and a lot of scammy bullshit. There is also a lot of real-world benefits that simply have not been leveraged to their fullest potential.

Love to hear some of the alluded to "real world benefits" - I have heard none so far, just claims of things an experienced engineer can invalidate with a few minutes of work.

"A few minutes of work" is entirely disingenuous and misrepresents the problem at hand.

"Blockchains" are not just distributed databases. They are also distributed, open APIs, and consensus mechanisms for updating and managing the functionality that controls those APIs and the data that they produce.

I think about it this way: if you have one company that creates a database that many people use to build businesses around, then that company now holds a lot of power over the people who chose to build there. I believe that those people should have a say in the direction of the APIs that input/retrieve data, and ultimately should have some say in how long that database persists. The idea that we allow single entities to permanently control datasets seems absurd to me.

Now, from an engineering management perspective, think about how you manage multiple teams who have different agendas, different priorities, and different needs for those APIs and the child data. How do you govern that? How do you ensure that all nodes that replicate this data set and the APIs are up to date and not doing funny business?

This is all stuff that the decentralized community (web3) is trying to figure out together. It's DEEPLY interesting and ABSOLUTELY not "a few minutes work".

Could you elaborate more on how a blockchain will allow clients to influence the direction of the API and also keep other clients up to date on new API changes? That seems a lot more complex than the way you're putting it.

It varies a lot from network to network. You're right: it is very, very complex.

Politics and governance are topics that are, I think, a bit broad for a post in a reply on HN.

Suffice it to say that groups of dedicated people, either as loose alliances or as tightly controlled development teams, come together and make proposals for change, implement those proposals, and then push them to a network. If the network as a whole thinks it is in their interests to use it, it gets voted on and enabled. Sometimes this works, sometimes it doesn't. Mostly it is entirely transparent to users. Rarely it causes a fork in a network (basically a civil war) where infrastructure providers decided to part ways and go on to support two child networks instead of one.

It's messy, as all democracies are. I think it is a beautiful process, and it has taught me a lot of valuable lessons about how groups really work, what politics really is, and how to convince people who do not want to be convinced because you believe in something fiercely.

Open networks take a lot of the best parts of FOSS and bring them to life in a way that I never thought I'd experience so intensely.

> Because right now, given how long the community has had to work on the problem and we still haven't seen anything like what you're describing, I'm still inclined to believe that Web3 is all a bunch of bullshit.

That's because based on everything that's been demonstrated by 'web3' is essentially useless. And this post you're responding to is a well.

They claim the benefit of web3 is you'll be able to have 'privacy' by controlling you identity and transaction history and choosing what to share by using blockchain.

Prevent a large company from having all your info. By putting it in a blockchain? So now instead of one, every large company has your info! You aren't gaining privacy by putting your private info in a public distributed db!

And just like almost everything I see posted about web3 a few mins of thought by any serious engineer shows this again is all hype that can't be backed up by the tech. And just like web3 in general, in this HN thread you see people caught up in the hype and missing the obvious core flaw with the very premise.

This is the problem with web3, the main product it successfully produces is hype.

I like this as well, but have zero faith in the wider public caring enough for that become the killer app. Most people do not care at all about Google/FB/Amazon owning their identity. It's sad, but true.

Sad, but true indeed. My hope is that there is a large enough minority that does care that will push for it's gradual integration and acceptance.

Wouldn't that be just as bad (if not worse) than the current situation? Those huge corporations could just read everything from the blockchain. At least in the current situation companies need to provide some sort of service to get to your data.

>> I think the killer app for web3 is going to be a decentralized, open identity/auth solution.

How would account recovery / password reset work in a web3-based system?

With Google, Apple, etc. there is a party that one can go to for account recovery.

How would it work for web3 if it is decentralized?

This is a really big problem that we spent a long time solving. The fact that if you lose your private key you lose your account and its associated identity and assets is a big deal.

We have a recovery mechanism that allows you to set and manage secondary authenticators which are used as witnesses in the case of loss of access to your primary account. Another working group that I'm involved in is trying to solve this problem in a tangentially similar way using multi-signatures. It's an interesting approach.

So what’s stopping my friends from stealing all of my money behind my back?

You're worried that a bunch of your most trusted friends, who you can even choose a subset of such that they don't know each other and have no connection other than you, will conspire to betray you in a provable way? Isn't that strictly less risk than giving a spare house key to a trusted friend or neighbor, which people do all the time?

Can’t à shared signed key algo be used ? Ala Shamir Shared secret algorithm?

If 2 out of the 5 keys ( or whatever value ) are present you can log in.

There are multisig social recovery wallets where one party or a group of parties is trusted to help you get regain access to the account with a new signing key. Gnosis lets you do this with arbitrary friends of your choosing. Or if you're like most crypto folks and have no friends, something like Argent can handle this for you with email/phone number authentication after a delay (a few days).

So what’s stopping my friends from stealing all of my money behind my back?

Social recovery with friends usually needs something like 3 of 5 or more to effectuate a recovery. So your friends would have to effectively collude with each other without any of them tipping you off about the plan.

> The idea that we use our email accounts, attached to huge corporations which siphon every detail about us for their advertising engines is absolutely absurd.

Is it, though? It’s just a trade off people make to get a free service. If I want my email to be free of advertising scanning by large corporate entities I can just pay for Protonmail or something.

This is what I feel like I see with web3 time and time again: it’s a complicated technological solution looking for a problem when (for the vast majority of people) that problem is already solvable without the complexity.

Honestly, I think the tech and infrastructure is simpler than what is currently deployed at google.

I strongly agree. Email is already a federated system that lets you own your own data. It turns out everyone would rather have convenience and that’s completely understandable.

> open identity/auth solution

An open solution built around public key cryptography? This has been technically possible to do for two decades, in the form of PKI client certificates, but never got anywhere because the key management is the problem.

Decentralisation trades "lose your account because you got banned" for "lose your account because any device with your key on it got compromised or lost", and for many people that works out worse. It's certainly less convenient.

Identity provision is also a two-sided market. You need adoption from users and the companies they want to log into at the same time. That's why there's only a few providers that most companies bother to integrate with.

The two-sided market is the big deal here. Imagine that you are a bank or online market place. What are you going to do when one of your top customers shows up and says that they lost their account keys? Are you going to explain that losing your account is actually a great feature that your company offers.

To be fair, this is the level of customer service that you get from Google in the first place. Banks are forced to do better.

Banks, at least in my country, can choose to accept incoming or outgoing financial transactions. Worse, governments have the rights to seize your assets, close your bank accounts, etc. Not sure any of that is better. I'd rather have Google shut my account down with no recourse.

It's all shitty and it's all infuriating.

>Google

I don't think that helps the Web3 argument. Google has made a choice, whereas crypto it is a technical limitation (or, to some, a feature). It also isn't a very good talking point to say "it's no worse than Google"

Crypto needs to develop a better balance between bad 2FA with loop holes on the traditional side and absolute loss on the crypto side before a lot of people would feel comfortable with it. Maybe that should be one of its target killer apps.

It’s not a technical limitation any more than it is for Google. You can easily create software where a chosen third party (or some 2/3 parties scheme) can recover your account.

That's good to know. It is a hindrance to Web3 adoption that such mechanisms aren't in place: It would certainly prevent me from relying on a service.

But what would a 3rd party or 2/3 party consensus use that would differ from current mechanisms?

There would also need to be some care taken to make sure that such 3rd parties don't become centralized choke points themselves: They would be somewhat essential, so any service(s) that did this could rise to dominance either as a monopoly or a cartel.

These mechanisms definitely aren't something built into the chain any more than they are built into HTTP or x86, but these chains are semi turing-complete so the software can be written (existing multi-sig ETH wallets are an example).

Let's say I control some funds and want you to have access to recover the funds if I lose my master key. I transfer these funds to a smart contract that allows my Ethereum key full control to move things around, and allows your Ethereum key access to give control to a new key if I lose mine (probably with a x-day delay, so I have time to revoke your access if you go rogue!).

For a 2/3 system, it's basically the same except 2 out of 3 of the other people need to "vote" on chain, and only then can my key be reset.

There wouldn't need to be a centralized party who resets the keys. Social solutions where you give trusted friend(s) limited reset access, probably with a time lock like I mentioned, are extremely promising IMO.

Thanks for the further explanation-- I fully understand that such things aren't baked into the current infrastructure-- which also creates problems (for example a cell service provider resetting a password over SMS through their own supposedly 2FA system). L

The smart contract you describe is sort of what I meant by service providers emerging for this sort of thing: The average user will not feel comfortable rolling their own such contract. It either needs to be dead easy, or there will emerge services that do this for you and oversee their execution. I could be wrong about that... Much of what Web3 will look like is speculation. But if those sorts of services emerge and become market dominators, they would have a lot of control-- contracts that allow termination (deplatforming). As contracts become more complex to avoid edge cases we see being exploited right now, it may become even harder to understand all implications, loopholes, exploits, etc.

The above may be a solvable problem: Develop tools to parse smart contracts. A specialized class of automated testing tools for smart contracts.

In the scheme I described there would be no central authority with special power over the "recoverable account" smart contract. Each user would deploy their own fully independent instance and choose who can help them recover the account. Contracts are immutable so the person writing / distributing the code wouldn't have any extra powers the way Google and Facebook do.

Obviously this hinges on the contract not being backdoored by its creator to begin with, but collections of free, open source, audited smart contracts for stuff like this already exists. A user would likely use some app / tool to deploy their instance, once deployed it's really simple to verify the deployed code matches the verified open source version.

In the case of my bank, I'd expect to walk into my local branch with my driver's license, passport, birth certificate, and any other official ID I have, and convince them that I am the same tzs who owns the account and have them set me up with new account keys.

What I wish is that there was some way to tie my other accounts, directly or indirectly, to my bank. My bank account is the most recoverable account I have, because they can handle me showing up in person with ID.

Other accounts just know me by my knowing the account password and/or being able to receive emails at the email address associated with the account. If either of those is compromised I can lose the account with no way to recover.

If there were some way I could have my bank verify my identity to my email provider, and tell my email provider that if account recovery is ever needed on my email account to re-verify with my bank that it is really me requesting the account recovery it would be much safer.

(If you are using an email address at a domain you own, then replace email provider with domain registrar).

Then no matter how badly I'm compromised (as long as it is not by someone with sufficient resources and interest to be able to get past an in-person identity check at my bank), I've always got a path to recovery.

Worst case, first recover the bank account in person. Then recover the email account using the bank account. Then recover compromised accounts that are using the email account for verification.

The bank still has a dependence on trusted authorities when it assumes your ID documents are legit. Rather than asking banks to confirm your identity for other accounts, I think we should ask governments to extend their practice of providing physical ID documents to providing online identification services. States have worked with Apple on "digital drivers licenses" that live on your phone, but the idea is still that you show them to someone in meatspace. Why shouldn't they provide an online service?

Of course, all this depends on the assumption that your ID should be who you are IRL, rather than the model where we can all make up several independent pseudonyms for different purposes.

Many European countries have government-provided online identification services.

Estonia's implementation is usually regarded as one of the best: https://github.com/open-eid

> The bank still has a dependence on trusted authorities when it assumes your ID documents are legit. Rather than asking banks to confirm your identity for other accounts, I think we should ask governments to extend their practice of providing physical ID documents to providing online identification services.

Sure, that would work too. Or even do both. The point is to have some place I can go in person to have my identity verified for a third party such as an email provider or domain registrar. Then set up the email or registrar accounts so that account recovery requires such a verification.

I wouldn't have to tie everything back to the in person verification. Just things that I want to be sure I can recover if I lose them via accident or hacking.

So what you are suggesting is that the bank has full root privileges to change credentials associated with an account. What is the point of having a decentralized database if the bank can change ownership of accounts as they see fit?

In-person account recovery is tough. A friend of mine runs a branch of a major bank. She regularly meets with customers who need to recover their account identity. A sizable fraction of the people who show up trying to do that are attempting something scammy.

If there were some way I could have my bank verify my identity to my email provider

Major banks can do their end of that. They will notarize documents and provide signature guarantees for established customers. Now, having obtained a notarized statement guaranteed by a major bank that you own your identity, how do you submit that to Gmail?

Banks don't really want to be in the authentication business anyway. It's an unprofitable sideline, and takes up a lot of staff time.

This is sort of what happens when you use OpenID with Google. The "break glass to recover account" flow at Google does literally involve photographs of government issued ids and other human process like that.

Right so this is where smart contracts come into play. There are crypto wallets that are based on smart contracts which encode logic that allow people to "recover" their wallets if they lose their key by having some N of a selected group of trusted friends sign off on switching it to a new key.

That is why this was impractical before: we didn't have a neutral/decentralized layer to remediate practical issues like this.

Smart contracts are something that can never work, because it is predicated on our ability to write correct code. Empirically, we know that is not going to happen, which means you need some sort of disaster recovery mechanism, which will end up being some centralised entity that has a sufficient level of permissions to override the contracts, thereby losing the primary selling point. Or you try to solve this with even more technological complexity, but that will only increase the fragility of the entire system and will paradoxically end up having the opposite effect of what is intended.

This is a bananas statement, there is literally billions of $ transacted safely and successfully on smart contracts every day.

Gnosis Safes (a multi-sig smart contract wallet) secure $96b in assets today and hasn't had a single security incident.

> Smart contracts are something that can never work, because it is predicated on our ability to write correct code.

Laws are of similarly bad quality (in my opinion of even much worse quality than software), we just have at least centuries more experience how to deal with crappy laws than with crappy software.

Does that really justify an entire blockchain infrastructure? This is possibly a hot take, but I can’t help but feel like key recovery as you describe could be implemented on its own, e.g. like horcrux[0]

0: https://github.com/corvus-ch/horcrux

Yes, because otherwise you are still trusting a centralized third party, which has incentives to lock you in to an ecosystem =/

Huh? What part of something like a horcrux relies on a centralized third party?

Oh well for this specific scheme, an MPC, it offers less flexibility. What if I want to remove one of my friends from my trusted guardians? What if I want to swap one out?

You can also design other schemes, like a time-lock one that says if none of the guardians are reachable (say they all lost their keys too, bad luck), you can recover it with some other secret key as long as none of the guardians reject it in 90 days, or something like that.

There are groups trying MPCs for this, but I think smart contract wallets will be far superior in user experience in the long run. You can even put in like bank-level protections, completely decentralized. For example, you could impose a daily spending limit, so even if you were compromised, you didn't lose everything and had time to lock the wallet. You could also restrict transactions to a set of whitelisted contracts, a list possibly maintained by a DAO. The possibilities are endless, it's turing complete code!

Sybil attack as a service: SaaS 3.0

OpenID let you have custom auth that you controlled. Basically no one supported it, and basically no one used it.

What would make the "web3" version different?

The honest answer here is because valuable assets are attached to that account. Money makes a big difference in what a company is incentivized to integrate and what they are not.

OpenId is awesome, and is awesome FOR USERS. It's just not awesome for companies. They have zero incentive to integrate it.

I'm not sure it was awesome for users. I remember finding it confusing.

That seems very hopeful to me. You can attach certificates of ownership that mean nothing inherently and no one has any incentive to respect. I see no evidence of anyone finding a good use for NFTs right now, and all the suggestions I've heard have been hand-wavey and/or obviously deeply flawed.

A bunch of speculators aren't going to drive actual adoption.

To be clear: I used OpenID and I loved what it offered me, but I don't buy that "web3" fixes the problems that caused its death, or offers anything more than it did.

Honest question: can that happen without users having to purchase ETH (or whatever the underlying token is)? My very limited understanding is that web3 is inherently tied to cryptocurrency and the miners have to be paid somehow.

The open network that we built has free accounts, free transactions, no resource staking requirements, etc. Gas on Ethereum is absolutely a problem and absolutely does not scale.

We do not have mining (proof of stake), and have been certified carbon neutral (https://medium.com/ultra-io/ultras-blockchain-is-carbonneutr...)

> With this in mind, we chose to assign seven designated Block Producers for Ultra’s blockchain.

This does not sound truly distributed. Like you might as well not use Blockchain if it's not distributed.

Git uses a kind of blockchain and is often centralized rather than distributed.

Pedantic but fine. I'll revise to "why use a trustless distributed ledger if you are going to only allow 7 validators. Might as well just use MySQL with an API.".

Decentralization is really a spectrum. We have a set of block producers that we've vetted and have worked closely with to set up the infrastructure for our network. They are external companies (Ubisoft is one of them). The code that runs on the network gets vetted by them and only goes into production after they sign a multisig and allow it.

It's not thousands of anonymous nodes, but it is also not a single entity that controls everything.

We intend to build out a more decentralized pattern with more complex governance as things mature. It's a software project and as you all well know, you can't launch your ideal at the start. You launch what you can and you improve as you go. Decentralization is that way, too.

Thats the fun part, you don't have to purchase any cryptocurrency. All you need is a crypto wallet and you have a public/private key pair.

Crypto only empowers this by encouraging people to maintain their keys with a serious financial incentive.

This is a cool insight.

That doesn't solve anything. People will still lose their keys. What is the key recovery strategy?

Check out Vitaliks post on the topic :

https://vitalik.ca/general/2021/01/11/recovery.html

In newer systems, users don't have to buy any tokens because VCs pay the transaction fees and they pay you to use the system.

But this can't last forever no?

Of course.

This has been proposed as decentralized identifiers before actually: https://www.w3.org/TR/did-core/

I'm curious because I'd bet you're right that such a thing would be adopted really quickly if it were user-friendly but my biggest question is whether everybody would be limited to a single identity or if you'd allow multiples. If you allow multiples, would 'identities' be free? If so, I'd be concerned that the same thing would happen to your company and product that happened to Web 1.0: In THEORY we'll all have control over our own data, but in actuality, running software takes time, expertise, and money, so aren't we all (meaning the general public/average person) going to have a choose an intermediary anyway? And you think it should be your company. (Which maybe it should, idk).

I'd also be a bit concerned about:

- Ability to spin up alts and anonymous pseuds is a key component to Internet use, for me. One great thing about email is how easy it is to get an email address; I don't need a credit card, address, ID, etc. I don't need to use a real name. And so on. This is one of the things that makes the Web so powerful a force for the marginalized. For instance, I had an email address when I was 6. That's illegal now, but 13 year olds can have them. Or say you're a lady in Afghanistan.

- This information persisting over time and being unalterable might result in some very uncomfortable social situations if people keep the same credentials for decades.

None of this is a reason not to do such a thing, and I think it's a good idea and one I'd actually use in a heartbeat, I'm just not under any illusions I'd be doing much other than switching my 'alliance' away from an email service provider.

> The idea that we use our email accounts, attached to huge corporations which siphon every detail about us for their advertising engines is absolutely absurd.

That's what the companies want, though. Facebook and Twitter don't trust me because I have an email address, they trust me because I have a _Google_ email address.

Having a Gmail account means that Google trusts you. Google only trusts you if you provide a reputable phone number.

If you host your own email, you can't do anything because nobody trusts you.

Changing the protocol from email to crypto won't fix that. I either have to be reputable ("Yes I'm wealthy, Google trusts me, I have a phone number which means I have a bank account, which means I'm a legal citizen with a government ID, and this is my legal name") or I can't get in. Standing up my own throw-away identity will be as useless tomorrow as a Mailinator address is today.

For you and me, email auth is a dark pattern. For the companies, it's a feature. It keeps out freeloaders, spammers, and criminals.

> If you host your own email, you can't do anything because nobody trusts you.

Where can you not signup with your own hosted email? I can't think of any service. Twitter, bank, saas apps, just care that you have an email.

Legitimate companies are unlikely to rely on decentralized identity unless required to by law. Apple/Google federated login? Absolutely, they have the power to dictate it (Sign In With Apple). Login.gov and ID.me? Absolutely, they’re trusted government and private sector identity proofing providers. But trusting the identity of your users to a distributed ledger or computation fabric? I just don’t see it happening, and it’ll likely go the way for Mozilla’s federated identity provider.

You are seeking a technical fix for a regulatory issue (data sovereignty and portability & digital privacy).

(I work in digital identity and interface with decision makers)

I'm a bit confused by why this is in the "crypto" space. I thought the whole point of the "crypto" space was to prevent double spend. If you don't need to do that then a distributed/federated database seems sufficient. Are you planning to allow users to give/sell their accounts to others? If not then why are you using a "crypto" platform?

Because you get into the issue of who gets the right to modify what part of the database, and encrypted blockchain is supposedly a solution ?

> I work in the web3 (crypto) space

> Maybe it is all a giant scam

Normally you'd expect people who work on something supposedly worth billions to be able to say with a degree of confidence that it's not a giant scam.

Leaving aside the discussions around PKI and necessary centralization in public/private key authentication I've seen this web3 debate a couple of times now.

It starts with "web3 is the second (third?) coming of the internet and will revolutionize everything".

If you ask for proof or use cases the very first comment is: "You can log into Twitter using a public/private key pair"

These are two very different statements. So even if you assume there is advantage in public/private key auth it is still nowhere close to an internet revolution.

Imagine the PostgreSQL team had praised the JSON data type as the revolution of the internet and disruption of all industries as we know it. It's a useful feature and it is used by a lot of companies but it has zero impact on everyday people. And Bloomberg and the Wall Street Journal are certainly not writing about it.

Reminded me of this Jaron Lanier quote from "Sway" podcast:

"I believe Facebook is undervalued for what it does. Because Facebook is essentially running identity for the internet, which is a very valuable function. So under a data dignity regime, I think Facebook would double or triple in value very quickly."

I do think that digital identity is going to be an existential(pun intended) question. Ideally it would be managed by a competent government agency. That's likely in many countries. I doubt that it'll be the case in the USA.

I love when web3 people say this, because it's revealing. There is really no application you can come up with that is less amenable to decentralized blockchain technology than identity. The hardest problem in identity isn't public key authentication (which we've had for 2 decades, and nobody wants) but account recovery. The absolute last thing any ordinary user wants is an identity that is cryptographically unrecoverable, or that functions like a bearer bond if compromised.

Account recovery isn't a basket of features like multi-sig wallets and threshold schemes. It's the assumption, so far baked in that most users don't even realize they're making it, that if something goes wrong with an account there is a human-mediated process for restoring access. A centralized authority is intrinsic to the concept! It has to be there from the beginning! You can't ask users to opt into it, because they're users and they don't know how any of this stuff works.

It's for this reason that Apple and Google control so much of Internet identity, and are going to continue doing so. Advocates of decentralized identity are poisoned by the experiences and preferences of a tiny but vocal sliver of users that (1) are deeply into this stuff and (2) do enough weird shit to occasionally get on Google or Apple's bad side and have bad/annoying experiences with account recovery. The problem is that these voices are not representative of the market, like, at all. Google does a better job of global Internet identity than any organization operating at any kind of scale. If you can't recognize why this might be true, and will be an enormous obstacle to adoption, you're not engaging seriously with identity.

The power that decentralized identity offers, normal people don't want. The things it takes away: necessities. It's a toy, not a killer app.

I completely agree with you, but I a small thought about public key authentication.

Today more and more people without a background in IT which got in the "Web3"/Crypto ecosystem get in touch with public key authentication mostly used with wallets like Metamask. It get's understandable and usable for the average user.

I don't see what that would get me that I wouldn't already have with Sign In With Apple, other than not being tied to Apple, which is one of the most important features of SIWA: if something goes wrong, there will be an ultra-annoying hard-landing customer service procedure that will, ultimately, restore access to my account.

A while ago I worked on the 2FA access feature of a large online service.

The fun crypto-related and login-path stuff took maybe two weeks.

The remaining months were all about account recovery. It's really hard to do well, and unless you hire support staff it just won't work.

I can turn this right back around on you.

> The power that decentralized identity offers, normal people don't want. The things it takes away: necessities. It's a toy, not a killer app.

Who are you to decide what “normal” people want, what a “necessity” is, what a “toy” is? And, moreover, are you sure account recovery is as important as you think it is? Maybe people would prefer to have accounts that have very little identity, that get thrown away without much care — you know, like how people use throwaways on here — than some One Absolute Source Of Recoverable Truth?

Humans have thrown things away forever. If anything, it is absolutely abnormal to want eternal persistence.

Also, the whole thing that public key identity has existed and “nobody wants” is utterly laughable when you look at the actual usage metrics on web3 wallets. If that entire industry does nothing else, the fact that it’s made 19 year old art students feel cool for knowing how to handle their public and private keys is enough innovation for one cycle.

Not sure why the crowd on HN is so irrationally religious about this issue. It’s not bike-shedding, but it’s definitely something similar.

> Who are you to decide what “normal” people want, what a “necessity” is, what a “toy” is? And, moreover, are you sure account recovery is as important as you think it is? Maybe people would prefer to have accounts that have very little identity, that get thrown away without much care — you know, like how people use throwaways on here — than some One Absolute Source Of Recoverable Truth?

The person being replied to literally suggested it as a single source of truth. For everything from HN to your bank account. So you’re tilting at the wrong windmill!

I think one thing the crypto fad has proven is that even experienced people can’t keep hold of their keys properly. You’re always one mistake from an irrecoverable situation.

Why would I want creds that once compromised not only were irrecoverable but also affected my entire life?

If you want easy, temporary identity then the current situation is pretty great.

> The person being replied to literally suggested it as a single source of truth. For everything from HN to your bank account. So you’re tilting at the wrong windmill!

The parent I replied to is competent enough to know that there is an easy way to have that “recoverable account” he is obsessed with: custodial wallets. You know, like the custodial accounts that are the defining feature of Web 2.0.

People who don’t understand the innovation of being able to choose between custodial and non-custodial, and how that’s a big deal that many appreciate beyond the opsec requirements, sort of expose their own weaknesses.

I can see that login via private key is cool for some people, and being able to login via a private key some other party maintains for you would work for "normal" users. But I could also implement that without bringing in a block chain, right? Wouldn't we expect that Google and the current authN providers just implement that if it ever became popular?

> But I could also implement that without bringing in a block chain, right?

Not only that, but they have! Signature-based authentication existed 20 years ago. Register with a public key. Sign a message with your private key to authenticate. Modulo some small details to prevent things like replay, you are done. The only thing that the blockchain brings is that now lots of people have asymmetric key pairs where their public keys are published somewhere widely accessible.

So the answer is web2!

I’m confused, you didn’t respond to the person’s argument. Way to go missing the forest for the trees. “Normal” is the >90% that hasn’t even heard of key signing and no amount of screaming at them will convince them to care.

No, you’re the one who is missing the point. An ever-growing number of highly engaged young people are using wallets and engaging in key signing without even thinking about it. And what those people do today, becomes the norm tomorrow.

I had meetings with newspaper executives in 2007 where I told them “everyone will get their news on Facebook soon.” They couldn’t understand what I meant, because they didn’t think “normal” people would ever use such things. A lot of comments on HN regarding web3 remind me of those conversations. This will all be so embarrassing in 10 years.

Facebook tells the opposite of the story you're trying to sell, of people flocking to a highly centralized space to get a single feed of news.

There are lots of things that highly-engaged young people have done that don't catch on in the long run. Given the problems that Web 3 has, I see it as a lot more likely that Web 3 will go the route of fidget spinners than the route of Google.

You mention Google as a positive example, but they don't really have "a human-mediated process for restoring access". If you can't restore access with their recovery form, it seems the only option is to seek a court order, unless you have contacts at Google.

And I don't think it's just a matter of Google being cheap. If they had thousands of CSRs with the technical ability to reset passwords, I imagine we'd have a lot more cases of stolen accounts, using social engineering or bribery (as we see with SIM swaps).

The hard-landing process Google has is both human-mediated (which does not mean "you're hand-held through the process by a human being") and also iterated over time. Nobody had to figure out precisely what the account recovery process for Google was going to be a priori, because Google is a trusted third party and can adapt its recovery procedures as it needs to.

The problem with identity is summarized in the "why your anti-spam idea won't work checklist"[1] We still don't have a solution to identity that prevents generating large numbers of fake identities, doesn't cost each user money, and doesn't require a central authority.

Blockchain systems are a demo of this. A blockchain just needs some number of players who are independent and not colluding. That ought to be simple, right? The best ideas the blockchain crowd has come up with to do this work by making playing very expensive. (That's what both proof of work and proof of stake do.) Even that didn't really work, as mining has become very centralized. A solution to identity has not emerged from that crowd.

[1] https://trog.qgl.org/20081217/the-why-your-anti-spam-idea-wo...

I think you could go even further and add that a lot of power users who you'd think would want decentralized identity don't want it either, for the same reasons you mention.

Also building on web3. I agree about authorization (permissions) but not about identity/authentication.

We do not need people to have to disclose their identities in order to use a service. We already have an authentication mechanism on every blockchain - the notion of an address/account. What we need is a decentralized way to associate permissions with those accounts.

This is something that must happen more by social consensus - projects adopting a standard. The technology already exists.

Combine it with a decentralized/uncensorable web3 version of Twitter/Facebook and it also has the potential to become a killer app.

I don't think I agree that this is a killer app.

Virtually no one wants the consequences of a fully unmoderated (aka uncensored) social network.

Either there is are strong filter/segmentation capabilities (like "the algorithm" on current plattforms and different plattforms for different audiences) or anybody but the most radical / loud users leave sooner rather than later.

Most users also have any of their content removed.

So I don't see many advantages over the present state.

Email is already decentralized. I pay for Fastmail with my own domain because I don't want Microsoft or Google to own my primary online identity.

Signature-based authentication has existed for decades. All that has changed now is that your public key is now a "wallet." If blockchain based authentication becomes the norm, it will be entirely because there is now an unrelated reason for people to create, publish, and store an asymmetric key pair.

> Nothing in the web2 tech stack currently allows this.

Seriously? It takes five seconds online to find projects like https://solidproject.org (backed by people like Tim Berners-Lee) that don’t need blockchain and present strong arguments to address the kind of issues you raise.

But it’s an open specification for the web. How lame and very NOT crypto $$$diamond_hands$$$.

The most impressive thing about blockchain is its capacity to create zealots for the One True Way, all others be damned.

> The idea that we use our email accounts, attached to huge corporations which siphon every detail about us for their advertising engines is absolutely absurd. I just want to be able to log in to applications and carry some of the simple data like my identity and what assets I have available with me, without having to pay for it by losing my privacy and autonomy. > > Nothing in the web2 tech stack currently allows this.

Anyone who wants to can get their own email address which doesn't require giving data to advertisers. You can run your own domain or use an email service which isn't run as a loss-leader for advertisers, and you can use services like the one Apple built into iOS if you want to prevent the sites you visit from having a common identifier. The cryptocurrency services will need a variation of that same solution since using one wallet for everything is bad for privacy but the average person has limited interest or ability to reliably juggle many wallets.

What's more interesting is to consider is why many people chose a single email provider when it started as a service which is at least as decentralized as any cryptocurrency. That includes the extremely important account recovery problems tptacek mentioned, spam, but also simply things like the different values most people have for security and operations. Cryptocurrencies are theoretically decentralized but in practice most of the people involved seem to use a handful of exchanges and ostensibly decentralized services often depend on one or two companies, and that tends to come down to the same answer: most people don't want to run servers or be one mistake away from losing everything, and would prefer that work be someone else's job.

The other problem we have is how much people are willing to pay. Fastmail, iCloud, etc. are not expensive but a LOT of people have reliably voted with their feet and there seems to be only a small number of people who mind ads enough to pay for alternatives. I don't see web3 as SSO going anywhere until there's a lot more value to be shown from buying in — that upfront non-trivial payment requirement for something which just allows you to access other services you presumably would also have to pay for seems like a tough sell as a mainstream movement.

> And the reason we all got internet connections in the mid-90's wasn't Web0. It was email. Web0 was a toy thing that only us geeks played around with, that came free with your email account.

Your comment about spreadsheets matches my experience but this does not unless “mid 90s” really means “1995 at the very latest”. I was seeing a ton of interest in web projects by then from normal companies who wanted to replace catalog ordering, put product and support information online, etc. – and normal people were starting to use it for all kinds of non-web things by then.

I strongly agree with your main point: I’ve never heard someone ask about cryptocurrency or NFTs except in that they heard someone on CNBC saying the prices were booming & were wondering whether it was a good bet.

It’s true that a killer app is probably necessary, but isn’t that what Web3 developers are currently trying to develop? It’s kinda weird to say “there’s no point in developing Web3 because there’s no killer app for Web3.”

I didn't say there was no point developing it. I said that the author missed the point of why PC's (and the internet) were adopted.

There's been hundreds of technologies developed because they were interesting to the developer, and then failed to find a market (or found a niche market and stayed there). Web3 currently looks to be one of those.

But who knows? If a killer app emerges, a reason for the average person to use it, then it'll succeed. Trying to predict this in advance is notoriously difficult.

Right, it's only been 10 years after all!

Disclaimer: I don’t own any crypto, even though I can tell it’s the future because I don’t know which ones will win.

Web3s “killer app” is government services.

Crypto in general is a pseudonym for open source rewrites of developed countries’ legacy government infrastructure for developing countries.

Eventually it’ll be so good it’ll replace the legacy variants that exist today.

> Web3s “killer app” is government services.

I don't understand. Can you give an example?

A government is already a central entity. If you have some service controlled by a central entity, why not build it in the standard database-on-a-server approach which is much easier?

Because whoever controls that database can change the data in it.

This was the crypto pitch for several years except it was for supply chain. "You can't hack the database!!" that didn't work out either because it doesn't stop someone from putting incorrect data into a database regardless of how easy it is to hack the database.

Same thing here. There is nothing to stop the government employee from putting incorrect data in the database.

This is why people see Crypto/Web3 as a solution looking for a problem. The complaint people have about the DMV isn't that their database gets hacked. The complaint is that the government workers do not care about doing a good or quick job.

Blockchain seems like a very costly way to add transparency and auditing. Especially if the chain will be controlled by one or only a few stakeholders.

So maybe rather than investing in the hope of some technologically-provided immutability, you just use the historical method(s) of (a) applying significant criminal charges to changing the data (b) structures and processes to audit data transformation.

For example, when buying a house you need to transfer the title into your name. The title is stored as a public ledger that can currently be requested by anyone. There is also other public metadata about houses that are public like the purchased price.

This is a very good example of a government service that will be disrupted by blockchain. The US, Canada, UK versions are relatively good today. However, maybe El Salvador[0] needs a better way to manage its titles and hiring a software consultanting firm to build that would be “too expensive” (not including the variability in the final product - i.e. it could cost a lot and still suck) for it to be worthwhile.

Even for the service in the US there are still middlemen needed and it’s relatively clear that security is not a strong suit of corporate America let alone the revolving door of government contractors. In the long run it’s just cheaper to use the open source blockchain code built with first class security in mind. The standardized and public interface of a blockchain also lets other companies extend the services without the extra red tape, e.g. it would be nice to get notifications of my neighborhood housing getting sold, etc. But this is really a bonus and up in the air, the killer app is really for developing countries.

[0] not to pick on El Salvador I don’t know the quality of their services. I’m only using them because of the BitCoin stuff.

I hope that you are right. Using open networks for transparent governance is the right way to go for democracies.

Why can't we just pass legislation requiring government software to be open source and government databases to be open access? This is already the case in several jurisdictions.

I currently work for a local government, and pretty much everything in our databases (apart from SSNs and certain HIPAA-protected data in the health department's database) can be freely accessed via an FOIA request. Some legislation requiring that these DBs (or a live copy) be directly accessible by the public would be relatively easy and inexpensive to implement.

What advantages would there be by doing this via crypto/blockchain/whatever?

As it’s been explained to me the biggest benefit is for countries that don’t yet have this infrastructure built.

For countries that do have this built, it’s been explained to me as a cost savings compared with hiring a government contractor to maintain or improve the service. Especially in the context of InfoSec. Not only do these legacy services need to keep being updated because of potential zero-days but also even the expensive contractors (even mega-cap corporations) fuck up InfoSec “relatively” regularly and the cheaper government contractors are only going to be worse on average.

Having the worlds best minds build and test the InfoSec of different crypto solutions seems like it will just be the cheapest option in the long run.

What I remember is different. People bought a PC to play games. And they connected to internet to download porn.

That might be the reason that you, a private individual, bought a PC. But there had to be enough PC's out there already to make it worthwhile making games for that market. That bulk market was created by spreadsheets.

And same for pron - there had to be enough people connecting to the internet to make it worthwhile making the pron available. That bulk market was created by email.

I'd agree that pron was a major early adopter for the web - the experience of piecing together pictures of naked ladies from hundreds of usenet posts was decidedly lacking.

The Web3 killer app is here and everyone pretends it is not here. That killer app is Gambling, Speculation, and Hope of No-Work Instant Wealth. Until this killer app is tamed, it will overwhelm the web3 movement until it dies the death of a failed gambler.

I've no doubt when they get VR sex with robots incredibly realistic, it will be a huge business.

After working on a decentralized side project the only projection I can promise you is that nothing you imagine is correct until you are heavily using decentralization.

Decentralization enables basic necessities that would you never before attempt, which means you are likely already engaging with killer ideas and dismissing them outright. That which is current boring and/or common can suddenly become sexy and powerful in ways that are unexpected or unplanned.

It also means that which you imagine as being the next hot thing most likely isn’t. The more time you spend working with decentralization the more true this becomes.

Think of decentralization as a steroid. It makes you (your technology) more of what you already are, an amplifier, not something new. New things will ride on the success of a successful application.

The challenge there is if an application is actually fully decentralized how will you determine success.

I'm generally a web3 skeptic, turned off by all the hype and ideology, but the interesting thing about "web3" is you a potentially critical mass of zealots working together and building on ideas. I'm sure something interesting will emerge out of that. Will it require crypto? Maybe, but probably not. In fact, I think what will likely happen is interesting ideas will come out of web3 but then they'll just end up implemented without crypto/decentralization.

I have a dumb question that keeps nagging me, and wonder if someone here has a good answer. What does Web3 necessarily have to do with the web? Couldn't an iOS app which uses blockchain technology as a decentralized database be just as good an example of what Web3 is trying to achieve? Or a technically oriented command line app for finance using a blockchain which does not involve a web browser?

Are Web3 people just using "web" as a stand-in for the internet?

Cryptocurrency has no value beyond what someone is currently willing to pay you for it and blockchain networks are expensive always-on distributed systems which require payment in other currencies. That requires a constant stream of new buyers, and the combination of limited usefulness and mounting bad reputation was starting to cut into it.

“web3” is the rebranding campaign which the large holders came up with to try to drive demand.

> Couldn't an iOS app which uses blockchain technology as a decentralized database be just as good an example of what Web3 is trying to achieve?

Until Tim decides to wave his hand and shut it down. Same thing with a hosted website. But developers could distribute the web app as html and then users run it locally. It connects to the blockchain and submits transactions.

> Or a technically oriented command line app for finance using a blockchain which does not involve a web browser?

Interacting with smart contracts does not require a web browser.

Web3 is just an excuse to still shilling crypto while using it as a payment system has not taken off. They need to hype the next empty buzzwords to keep parade going.

I still don't understand how Web3 doesn't become centralized like Web2 did. While services like email are technically decentralized we see that they are highly centralized on Web2 because almost everyone uses GMail. We see similar centralization with other types of services. I understand Web3 is also trying to decentralize not only the services, but the hosting. I still don't see why the big main players like AWS wouldn't just continue to host the majority of the servers. I feel like a lot of Web3 evangelists are asserting decentralization but not explaining a good mechanism for it to be so. Web2 has clearly shown us (as most of history) that momentum is powerful and that there is a positive feedback loop in systems like these. That power begets more power. So what's the mechanism for maintaining decentralization?

As for the crypto parts, I'm all for making everything possible cryptographically secure by default and E2EE.

> A blockchain is a worse database. It is slower, requires way more storage and compute, doesn’t have customer support, etc. And yet it has one dimension along which it is radically different. No single entity or small group of entities controls it – something people try to convey, albeit poorly, by saying it is “decentralized.”

Is it true that major blockchains out there are really not controlled/controllable by a small number of people?

I read that top 10,000 account holders hold over a third of all bitcoin [1]

Assuming same thing happens with other blockchains, isn't that the same problem as top 10,000 Facebook shareholders owning a third of its shares? Basically the system is decentralized on paper, but in reality massive centralization happens driven by economic incentives, same as in non-blockchain world.

[1] https://time.com/6110392/bitcoin-ownership/

As someone who has just heard the name Web3 over and over again, is there anything tangible that I can try? I have tried IPFS, but I don't know if it's "web3".

Just heavily invest into badly drawn monkey NFTs and you'll soon become a devout web3 enthusiast.

there are a few clones of social media sites like https://orbis.club/, there are others that are like reddit or similar but I don't remember their urls.

As other commenter mentioned below, "web3" is mostly storing transactional info into a blockchain and then linking stuff to ipfs + some layer on top to display this. For example that orbis site, indexes/caches the data in the bc to be able to display it as per their use case. So the only real difference is that the "tweets" are not owned by them but by each user. For anything else it's still a normal web app.

I don't know how this works legally, but there was a link from Vitalik's blog a few days ago explaining this. Say if a user uploads CP or some other illegal/offensive content the site can hide it but can't delete it. I'm not sure where liability would fall on here.

Similar, the case with Twitter blocking Trump a few years ago, maybe another site could still allow him to continue if they wish to do so by displaying the same content

I guess there are more use cases that distill from here, not sure how beneficial they are or might be, and just as many things in technology it is not 100% neccessary that the solution is better than something that already exists, it just needs to get traction and attract people/investment. Whether that happens with web3 is just to be seen I suppose.

Also descentralised exchanges are things coming up, but this gets even muddier with all the compliance requirements so not sure where those will end up

DeFi is pretty cool. Check out some of the strategies on yearn.finance or the simpler ability to be a market maker on uniswap.org.

I stayed away from crypto coins despite having a lot of friends get into this very early and I even refused gifted bitcoins. I still have zero interest or regrets.

That being said I have no ideea where this tech is going. Maybe it will tranform enough times it becomes useful to me. A better analogy for me is the gold rushes. A lot of bad things happened during those but it also encouraged migration and settlement of some unexplored regions.

If I don't get involved it doesn't cost me very much that other people try. Let them do the work and take the risks. If they produce anything useful I will profit. If not...

(I know about the environment cost)

I totally get why people stay away from this stuff, but I've found the best way to understand what is going on in this space and what it potentially has to offer is to actually use it and experiment with it which is something any naturally inquisitive person would do. The quality of journalism (which as far as I can tell many are relying on to form opinions) surrounding anything crypto or "web 3" related has been astonishingly lazy and just flat out bad for a long time.

This author fundamentally misunderstands PCs and HTTP, and then goes on to make bogus claims about what can be done on a blockchain. “Permissionless” is wildly misleading description of the blockchain. You can’t change anything in the ledger besides things you already own. There’s also the implicit lie that blockchain means everyone is on equal footing. If that were true, VCs would not be racing to pour billions into Coinbase, et al. If anything, blockchain makes you more reliant on the intermediaries, and everything that web3 promoters resent about web2 will return, only worse.

Here's a good analogy for crypto that I think helps close the loop on people who don't seem to want to understand it.

If I have a tungsten cube sitting on my table, it is theoretically possible that I could track that tungsten cube backwards through time. It's sitting on my desk now, but before that it was in a box on a UPS truck, before that in a foundry somewhere, before that it was in the earth, before that the elements were in a supernova which themselves could be traced back all of the way to the origin of the universe.

So the fact of the cube sitting on my desk is really just an expression of all of the events leading to it sitting on my desk, and this isn't something that can be fabricated no matter how much authority you have (you could like, but the universe would know it as a lie).

Blockchain is that. I have some value in my wallet, but that value can be traced all of the way back through various transactions to when it was mined/minted/whatever, and actually the entirety of the various crypto ecosystem could be traced back to, literally, the genesis block.

That is a Very Big Deal. It means that the block chains are internally consistent universes of their own, with no central authority. That's a big deal for gaming, for ownership proxies (like NFTs), for currency, and for really anything else that exists within our own universe.

To say it in a somewhat flowery way: our own universe is a physical blockchain.

You write this as if this is profound, or otherwise not understood by the HN audience.

What you’re describing is not a blockchain. You’ve described time. Every path dependent process is not a blockchain.

This article does a decent job at casting the decentralized database argument as disruptive innovation without resorting to hype. But I wonder about the other fundamental drawbacks of blockchain for developing new applications:

- Immutability: building any software requires iteration, and therefore mutability. How do you build a startup if you can't ALTER TABLE on your database (or it requires a new database)?

- Irreversibility: if there are any bugs, or mistakes in the code, you can't fix it later (and in fact, someone may be able to steal a lot of your tokens)

- Dependency on real-world data sources: even if smart contracts are ironclad, they can dependent on potentially erroneous or manipulable data sources

- Off-chain centralization: many of these blockchain apps such as the play-to-earn games have a lot of centralized control that is not on the blockchain and under the discretion of the developer. Probably because of the reasons above

At a meta level, the hardest problems are people problems and not solvable by technology. Trying to solve people problems with ironclad code seems like a fool's errand. If there was a killer app that wasn't handicapped by the issues above, that would make me a believer.

> Ok, so how is this remotely the same as PCs being cheaper? Well because to some people this matters a great deal. Why? Because much of the power held by large companies (and by governments) comes from the fact that they operate and control databases.

The key point here is "Some People". But to make meaningful change a majority of people have to switch to a new system. The sad truth is: 90% of people do not care.

The best example for this is podcasts. They started out as a decentralized utopia. Self hosted files, self hosted feeds, multiple apps to listen to them, improvements of existing formats (mp3 chapters were not really a thing before podcasts), there were even talks about enabling BitTorrent distribution.

Fast forward a few years, now Spotify seems to accumulate most of the podcast universe and a lot of the existing podcast use them as a distribution platform. And their exclusive content is drawing in more and more users.

So my question here is: if we have a decentralized system that works but people willingly use a centralized alternative of that, how can you claim that decentralization is remotely popular?

You need to address this social issue before coming up with any kind of technology to solve it.

I think people don't care enough about "I am the true origin" internet. Web3 is, IMHO, a waste of time.

At the end of the day, an internet server will (and should) be managed by a single entity (person or corporation). Why? Well, why not? Why should _I_ host _your_ website (IPFS)? Just so that some granny with a laptop can cryptographically prove it's yours as originally intended?

For example, I personally don't care what FB (now Meta) does with my data - my likes aid in teaching an algorithm to understand humanity better than humans themselves? That's fucking awesome!

How would Web3 change this even?

There'll always be a need in understanding people in ways no one can imagine yet, and to do so, someone has to leverage your data in ways you might not like (mostly because you don't understand the need, or you're just a sheep in a herd screaming "that's mine!"). This is inevitable.

P.S. I am still struggling to understand Web3, please bear with me and my rant.

I am astonished at the adolescent boy level of gee whiz rationalization, here. The damning aspects of Web3 are barely being mentioned because of the emotive appeal to scary corporations controlling you.

Web3 does not solve the problem of being bullied or controlled. It makes it worse. You can dislike Facebook, but it is a legal entity that the state can hold accountable. Who is held accountable in Web3? What recourse does anyone have if things are published about them that harm them in Web3? Russia created a well-funded agency to troll the web and manipulate public opinion. It seems to me they will love Web3.

Entities that will vie to control Web3 will be rich, powerful, and better protected from legal moves against them.

We already have a decentralized web. It called the Web. Anyone can connect a server to it.

> A blockchain is a worse database. It is slower, requires way more storage and compute, doesn’t have customer support, etc.

Please Mr Albert Wenger. You are a VC and not a technical expert on what is a database or a blockchain.

It makes absolutely no sense to compare a database to a blockchain. These things are completely different and have entirely nothing in common except that they persist data. You wouldn't compare a file to a database to make a point, would you? Also, you don't have the authority anyways to make that comparison as I doubt you know the technical details that differentiate a database from a blockchain.

Databases aren't blockchains and blockchains aren't databases. Stop comparing them for your ignorance's sake.

Yes, he's talking about them at the level of abstraction that is 'things that persist data'

You wouldn't compare a file to a database to make a point, would you?

If the comparison fitted the abstraction level the conversation was at, absolutely.

For most purposes that have ever been implemented on a blockchain, a database of some kind would just be a far superior persistance backend.

The mistake is thinking that interesting underlying technology gives something de facto justification for existing in 'user' space when it does not.

For me it's just cringe. Imagine a VC would start selling hash trees to programmers. That's the feeling that his blog post invokes.

File system is a database. Spreadsheet is a database. And surely blockchain is also a database.

I think you should adhere to the HN guidelines and not make such unsubstantiated claims.

> The canonical example here is the personal computer (PC). The first PCs were worse computers than every existing machine. They had less memory, less storage, slower CPUs, less software, couldn’t multitask, etc. But they were better at one dimension: they were cheap. And for those people who didn’t have a computer at all that mattered a great deal. It is exactly this odd combination that made existing computer manufacturers (making mainframes down to mini computers) ignore the PC.

Wow. There are so many factual errors in these sentences that I’m not even sure where to start.

I’ll start by giving the author the benefit of doubt and assume that by „personal computer” they meant the IBM PC (1981) and its family. (Otherwise we’d have to assume that they completely ignore the existence of pre-PC home computers, many of which were both less powerful and significantly cheaper.) It’s also not true that the PC was unable to multitask (remember Concurrent CP/M-86?)

First, note that IBM, at the time of introducing the PC, was – and continued to be, well into the 21st century – _the_ major purveyor of mainframes. So saying that they „ignored the PC” implies that they ignored themselves, which doesn’t make sense.

Second, the initial PCs were just not powerful enough to compete with mainframes or minicomputers. The sets of usecases of „big” computers vs. PCs were almost completely disjoint until perhaps the 1990s. There were reasons why the PC exploded in popularity in the 1980s (open architecture being the #1 reason), but the author is silent about that.

I know this is tangential, but I see a lot of handwaving in this post and, frankly, not much else. Why should I listen to someone who can’t get their facts straight? Why bother, indeed?

The only concrete point in your rant seems to be this:

> So saying that they „ignored the PC” implies that they ignored themselves, which doesn’t make sense.

This makes perfect sense to anyone who has seen a large lumbering schizophrenic beast like IBM. It's commonplace for one division to despise, ignore and undermine another.

You need to separate web3 and cryptocurrencies.

Cryptocurrencies are necessary. A parallel monetary system secured by cryptography and codified by algorithms, is highly necessary for nations with corrupt regimes. Being able to move fiat money into stablecoins and get a loan against it within seconds is necessary and has real utility.

Web3 does not really have utility. It's all driven by token price speculation right now. The big thing is if you think about the general population, nobody really cares about decentralization. They just want a good user experience. A centralized but good user experience is good enough for 99% of the population.

The concepts and ideas about web3 are interesting, but the comparisons with how web1 and web2 came to be are ludicrous. Both were fueled by real needs of real people and companies, and came to prominence slowly as people figured them out. It took a long time before it was profitable and money came into the picture.

Lee’s web1 started in universities and it took years until people believed in it. Web2 came slowly as companies wanted to let their users interact more with their websites. I guess *AMP software was a major turning point in this, open source and available to everyone. You can be a part of web2 and never even know the name of a single VC.

What is happening right now is the absolute opposite. Money is at the very center of the discussion to begin with. Don’t get me wrong, I’m not a socialist, but I understand that a revolution such as web1 or 2 cannot be steered by money. If it happens (or when it happens I guess) it is probably going to be in a completely different way as what is being discussed on Twitter today.

So, yeah, most crypto people don’t have the faintest clue how it works. And it’s kind of weird to embrace this very hyped/vc’d tech, while remaining mum on all the already decentralized tech that’s the bedrock of the internet. And exchanges + crypto is basically legacy decentralized web tech + Google/Meta.

But one thing that I do have to say is interesting about the tech is embedding smart contracts. This is legitimately interesting and novel, and probably the best justification for web3 tech.

I really don't get it. What is the appeal? Is it an anonymous web like existing darknets? They exist and work already. Obviously, so long as there is a more convenient/cheaper/more accessible non-dark-web, the only people who will be on the dark web are criminals.

What is the connection between "web3" and "NFTs" and "Cryptocurrency"? I mean apart from all being loosely related to the same underlying blockchain tech - are there other points of contact?

Am a fence sitter. I think new technology and innovation is interesting. I think exploring new ideas is interesting. Theres enough capital to go around.

Will be interesting to see how this develops

Not commenting on TFA's content but... It's using:

   text-align: justify;
   hypens: auto;

That is, IMO, underrated. I'm reading this on a M1 MacBook Air: maybe at "retina" pixel density we can, at last, use text-align: justify and have pages looking (nearly) as nice as book pages.

I'm not going to force justification for people on small devices (it looks bad on these) but it sure is pleasant to me on a high-density, kinda large, screen.

> Facebook is a database of people’s profiles, their friend graphs and their status updates. Paypal is a database of people’s account balances. Amazon is a database of SKUs, payment credentials and purchase histories. Google is a database of web pages and query histories.

This is painfully wrong. Almost true for Facebook, but in general these companies most valued assets are their systems and operations, not the data itself.

Also I’m pretty sure the first PCs weren’t cheaper at all.

Paypal's might be the closest. If FB, Amazon, or Google woke up and saw that all their data was gone, it'd be extremely annoying but recoverable by just having users recreate accounts (or re-scraping). If they woke up and saw that all their ops & systems were gone, it'd be the end of the company. If PayPal lost either it'd be the end of the company.

I think web3 means, most generally, decentralized Internet without big tech. How can this be achieved? By people sharing their computer/internet resources instead of relying on big tech servers. Why would they do that? Because they will receive incentives in the form of digital currency. Who will pay those incentives? People investing dollars into digital coins with speculative purposes and people providing services for digital coins.

Decentralization and taking power out of the hands of large corporations is no guarantee of success - otherwise Napster would have to dominate the music streaming market today and not Spotify.

> prior to the Bitcoin Paper we literally didn't know how to have permissionless

Simply not true. Torrents allow you to store and retrieve objects from a decentralized object "database" without an individual having control over it.

The author implies the assumption that over time, distributed data will get quicker and cheaper, like the CPU and memory on a PC.

It won't.

It can't.

The problem is that validating transactions on a blockchain must be expensive. If they were cheap, then I could spend a few bucks, take over a blockchain, and say that my transactions are the valid ones.

There's no way around this issue.

That HN universally eschews Web3 should be an indication that there is something of value to be found in it.

I'm slowly coming around to web3 as an idea after giving it a lot of thought. For me, MMOs are a great boostrap for thinking about this. People pay real money for in-game items and currency...usually from the developer, but web3 enables players to buy/sell directly (and allowing this can be a product draw, much like APIs were for Twitter). Web3 technologies can enable an ecosystem for this without a bunch of bespoke work that likely isn't core to what a business is trying to achieve.

However, I don't see it as a "web3 all the things" like web2 was, but as a set of protocols for certain kinds of behavior we're beginning to see online more and more. We'd probably add it in without thought (like we did Facebook's share buttons 10 years ago) if the tech weren't so complicated and the energy concerns so pernicious.

A lot of the success will come down to how successful everyone is at standardizing on schemas. In a decentralized world, I'm skeptical of that working out better than it did for web2, but I wish everyone luck.

> but web3 enables players to buy/sell directly (and allowing this can be a product draw, much like APIs were for Twitter). Web3 technologies can enable an ecosystem for this without a bunch of bespoke work that likely isn't core to what a business is trying to achieve.

I'm old enough to remember that in the ancient history of just 10 years ago Diablo III was released with an auction house that let people buy and sell items from other players for real money.

I'm also old anough to remember that in the ancient history of just 7 years ago it was removed from the game and I also am old enough to remember the reasons.

Having players trade in-game items is not as good a proposition for "what a business is trying to achieve" as you think it is.

9 years ago Valve launched Steam Community Market. Still running still making them stupid amounts of money and providing some value to consumers.

I see no reason why this blockchainless centralized solution couldn't be replicated by anyone else in industry... No need for NFTs. Just do it...

It's likely because you can make more money by holding more control over the supply. Even users of the Steam Market would scoff a bit at it - they would rather have it be without taxes and exchangeable for real money. I wonder if there is a web3 solution already in place which could achieve that...

Is there feeless web3? If there were no taxes, how would the people running it make money?

That's my mistake - indeed nothing is free, but when the protocol is open source and interchangeable the market will settle on a sustainable marketplace which users prefer the most; price will of course play a role in that. Point being I'm not sure Steam is simply compensating their database operations with their marketplace tax, and that they have no competition for market making their own items.

> that they have no competition for market making their own items.

They will not have the competition. Because it's their items, and they chose to only support items sold through their marketplace.

Yes, you can reiterate.

> It's likely because you can make more money by holding more control over the supply.

Because, surprise-surprise, businesses are not charities. They do need to earn money.

> they would rather have it be without taxes and exchangeable for real money.

Of course users want all the perks with none of the responsibilities: let the business support all these items in perpetuity while users trade them outside of the business' purview.

> Because, surprise-surprise, businesses are not charities. They do need to earn money.

And?

> Of course users want all the perks with none of the responsibilities: let the business support all these items in perpetuity while users trade them outside of the business' purview.

Everyone would like all the benefits with no cost in all cases; that's not what's being suggested as its obviously impossible. The more decentralized service simply has the potential to be a better deal for users at the cost of centralized business - it does not mean costs disappear. You say yourself the business need to earn money (which is only true for sub profit margins), so you seem to understand that the money goes somewhere, why not let it go more to users willing to shoulder some cost while also giving them more freedom?

With all due respect, the point of all these crypto buzzwords is to forgo what's 'good' for [centralized] businesses in favor of what users want. I can imagine the vast majority of Diablo players (assuming the market was ran legitimately) would prefer to still have the market, while Blizzard discovered they could make more money closing it. A high ideal (to me) for web3 is that users can uphold the system they want and be compensated for doing so at the same time.

While the web3 example still features a creator and early investors who may make the most money, users will prefer the market which promises to stay up via its contract code. We may be a long way from enough users understanding this to influence developers, and it may never reach that perfectly, but that's the direction web3 can hopefully push things.

> the point of all these crypto buzzwords is to forgo what's 'good' for [centralized] businesses in favor of what users want.

The point I was replying to was literally this: "Web3 technologies can enable an ecosystem for this without a bunch of bespoke work that likely isn't core to what a business is trying to achieve."

The core business can actually be hurt by unchecked trading of items.

> I can imagine the vast majority of Diablo players (assuming the market was ran legitimately) would prefer to still have the market

Why don't you go and ask the vast majority of Diablo players before making these assumptions?

> We may be a long way from enough users understanding this to influence developers,

How do you "influence developers" by trading some items outside the core of what the developers are building?

BTW, building tradable items can and usually is still outside the core of what business is building.

> but that's the direction web3 can hopefully push things.

Ah yes, the hope that web3 may push towards unchecked trading of meaningless items (meaningless outside the game/business in question) that actually ruins the core game experience.

> The core business can actually be hurt by unchecked trading of items.

Again, that's the point. Its obvious centralized market makers only make money when they control the market and limit market freedom, which is why its easy to imagine the players in general would prefer to avoid such a tax/manipulation/centralizing forces.

> How do you "influence developers" by trading some items outside the core of what the developers are building?

By placing personal value in systems that give users more freedom and assurance of the protocols they initially bought into. When people can understand that that is what they are being offered with a 'web3' approach, they can influence developers to build what's most demanded, i.e. basic economics.

> Ah yes, the hope that web3 may push towards unchecked trading of meaningless items (meaningless outside the game/business in question) that actually ruins the core game experience.

Ahh so Diablo items are meaningless now? Maybe to you, but certainly not to many other players as you've demonstrated. What about decentralized exchange protocols is unchecked? Its as safe as the blockchain itself - perhaps you are thinking of government regulations.

> Again, that's the point.

Core gameplay: is being hurt by players only chasing it in hoping to make money

Cryptopeddlers: yes, that's the point.

Thank you.

> they can influence developers to build what's most demanded, i.e. basic economics.

Core gameplay: is being hurt by players only chasing it in hoping to make money

Cryptopeddlers: yes, that's the point. That's what devs should build: ways to monetize assets in the game. That's what influence and basic economics is!

> Ahh so Diablo items are meaningless now? Maybe to you, but certainly not to many other players as you've demonstrated.

What part of "meaningless outside Diablo" did you not understand?

Don't bother. Judging by your answers there's very little of what you understood from my message.

> Core gameplay: is being hurt by players only chasing it in hoping to make money

That's just your opinion, man. I've heard from more Diablo players than just you that they dearly miss it. But I guess if all the value of your game is extracted to the team running the servers and zero of it to players is what you find compelling, feel free to fritter away on centralized grinding for truly and practically worthless pixels.

Clearly those items weren't meaningless outside Diablo when they sold for real money. How thick can you be? You think its that impossible to decentralize a market? You think it hasn't already been done?

> That's just your opinion, man. I've heard from more Diablo players than just you that they dearly miss it.

It's amazing how you totally dismiss the opinion of all the players who didn't like and didn't want the marketplace as irrelevant

> But I guess if all the value of your game is extracted to the team running the servers and zero of it to players

Ah yes, making a better game whose goal is no longer a rush to monetize assets is "giving no value to the players".

> Clearly those items weren't meaningless outside Diablo when they sold for real money. How thick can you be

Because they literally have no meaning or value outside the game for which they were designed and that only work within that game.

> You think its that impossible to decentralize a market?

Ah yes. The good old "let's pretend my opponent said and thought this thing and bravely fight this argument I invented for my opponent"

> It's amazing how you totally dismiss the opinion of all the players who didn't like and didn't want the marketplace as irrelevant

It's amazing how you dismiss the opposing. Or is it? I had to stop reading after that, its clear this is isn't hitting for you as I'm forced to keep backtracking for your sake.

> I had to stop reading after that

No. You stopped reading way, way before that.

> I'm forced to keep backtracking for your sake.

You'd not have the feeling of backtracking if you actually read what I wrote, and stop reacting to arguments you think I'm presenting.

You'd also not have this feeling if you stopped pretending that the only way for the world to operate is by monetising assets of everything.

It seems like the VC's are coming to harvest crypto. They will try to regulate it and squeeze out all the tech and profit for themselves, but at least they will counter the much worse regulation that would submit crypto under the control of central banks.

So basically web3 is the solution to money-hungry super companies centralizing power? Then why is it that we only seem to be discussing it after big names on Twitter decided to talk about it?

A novel platform that can’t block its users from deploying on it, or commerce, and people have trouble seeing some value in that?

Even the somewhat centralized platforms have so much high speed commerce on them that they don’t disrupt anyone. Even people that quickly exit to the bridges are not stopped and couldn't be, on the centralized-ish ones.

That’s a lot of alpha and value extraction to miss. Especially if you invest in the bridge :)

Don’t worry you’ll read about it late, in 2030, ngmi

> Even the somewhat centralized platforms have so much high speed commerce on them that they don’t disrupt anyone. Even people that quickly exit to the bridges are not stopped and couldn't be, on the centralized-ish ones.

What do you mean by "high speed commerce" and "people that exit to the bridges"? Why do you talk in riddles?

There is lots of trading, borrowing, arbitraging, building and releasing new products, marketplaces. Thats the commerce, a lot of it is high speed.

Bridges are the technologies that move assets between blockchains, so because there are trillions of dollars of assets in this ecosystem already, they dont rely on the exchanges to move fiat in and out anymore, they rely on the bridges to move other assets to other blockchains. There usually is a service fee to the bridge operator. It is lucrative.

> riddles?

I’m not here to explain, I’m just using the terms as they are. If people are stuck in 2017 or earlier with their older skeptics arguments, then they wont try to learn and just be more and more confused as the space keeps evolving, not my problem.

> There is lots of trading, borrowing, arbitraging, building and releasing new products, marketplaces.

I’ve seen you post about crypto many times before, and you obviously have a large bag.

But all of the trading you’re talking about is of crypto, the very thing we’re trying to establish what the usecase is. There are no products outside of crypto, and building a bridge/exchange/marketplace for assets does not automatically confer value to either the assets or the venue.

> But all of the trading you’re talking about is of crypto, the very thing we’re trying to establish what the usecase is

Or just look at the market needs, build the bridge, and collect a toll from everyone using it. Your standard is "I can't tell why people are using the bridge and they might stop, so therefore its a fools errand to build the bridge for income", "also income built from other people's speculation is not a use case, and my participating for income at all is also speculative so therefore I can't take it seriously"

With that kind of standard, you'll never reach a reconcilable conclusion, while continuing to miss all opportunities. Its an impossibly high standard when the same questions apply to every SaaS product or physical world commerce too. The whole world is built on consumption and speculation, and when the variables change everyone stops commuting over any particular bridge.

if you want dollars, get passive income from a product you built for that market niche, and convert your income to dollars. if you make anything that's used, then you've made a minor improvement for people in the space, which is good enough.

I’m a trader by profession, so fulfilling a market need because it exists for whatever reason isn’t something I struggle with. These threads aren’t about whether or not there is demand for the things you mention. Nobody disputes that.

The discussion is more nuanced about scale and longevity and that demand.

Its an emerging market that its participants are optimistic about. Nobody knows the answer they just try to get a piece of a growing pie. The time to market is hours, instead of months/years, for the same or greater monetization, and thats all there is to it.

If you’re waiting for the consensus on which quantitative analysis to use to justify your participation, then you’ll miss it.

Given the superior paths to monetization and liquidity, and the shorter lifecycle from inception to market, than everything else digital or software related, its easy for many people to just conclude that its not worth debating about and just act.

You're telling people not to think, not to analyse, and to impulsively throw money into something, just because it's there. This is terrible advice. You're not helping anyone with that kind of advice.

More so time, than money, if you read the thread again I’m talking about deploying software in this style of platform

> There is lots of trading, borrowing, arbitraging, building and releasing new products, marketplaces. Thats the commerce, a lot of it is high speed.

No, that's not commerce. Trading, borrowing, arbitraging, building and releasing new products, marketplaces is not commerce. Commerce is the exchange of goods and services.

okay then the SaaS and gaming and merchandise used in the games

I don't care which phrase you use, a lot of it is happening

and even centralized-ish chains don't block any of it, and would be too slow to even if they were compelled to

that was the point, not the semantics

I don't agree with this perspective. Crypto is designed to be a poor technology, the slowness, waste and scarcity are part of what lead to increasing prices, which is the only reason people have interest in it. If PCs were traded like beanie babies, with less regulation and bigger asset bubbles, then maybe this analogy would make sense. But PCs are designed to be useful, not only traded like commodities to increase fiat.

If this take, "crypto is bad technology but we're at the very start of it, it will get faster and more efficient," shouldn't Bitcoin Cash have won a long time ago? Few seem to care about actually using cyrpto for anything other than increasing fiat. It's 90% wash trading.

I think we're doing a lot of speculating while most data on blockchain technology would suggest growth...

I think this community could actually have a heavy weight on the future of the world, and to do well we need to go beyond black and white arguments/absolutiste (which never actually happens in real life btw). When has anything ever truly replaced anything?

Telegrams have had their most successful year ever, 17 million of them sent last year.

Things tend to coexist, in the same way that you have some that say "bitcoin will replace the dollar!", and those that say "bitcoin is stupid, and will never be used as currency". The future lay in the middle

> most data on blockchain technology would suggest growth...

What data would those be? Besides price increasing?

We're more than 10 years into the "blockchain revolution" and I still don't see a single meaningful problem solved by this technology (it makes ransomware and selling drugs online easier, I guess).

Compare other recent technologies: the web, mobile phones, electric cars... where were they after 12 years of development?

The same properties that make it useful for ransomware make it useful for other things as well.

Irreversible transactions lower transaction costs, it reduces the risk you’ll need to go to court basically.

Irreversible transactions lower transaction costs

Blockchain transactions are not irreversible. You just need 51% of POW miners/POS stakers to agree and they can do anything they want to the blockchain.

It’s the literal reason why ETC exists. Ethereum got attacked, some people thought those transactions should be reversed. So they reversed them. Others felt the hack should stay so Ethereum Classic was born.

There will be more of this. Wait until the first court order and a bunch of regulation happens.

A court order won't work to reverse a transaction on the blockchain layer, only to force someone in-jurisdiction to send the funds back. That obviously can't be helped, but having the irreversible transaction on the base layer still eliminates a whole class of issues that cost time and money to solve.

The big chains really aren't susceptible to 51% attacks at this point. If one is really worried about it, you can just wait more blocks before considering the transaction finalized.

The DAO fork is a different class of issue unrelated to 51% attacks. It's true that a group of people (minority or majority) can fork a chain with whatever rules they'd like, but this isn't going to happen because some company regrets some purchase they made, only systemic issues.

I'm not speculating, 90% of crypto trading is wash trading https://www.sciencedirect.com/science/article/abs/pii/S15446...

> I think this community could actually have a heavy weight on the future of the world, and to do well we need to go beyond black and white

I’m a huge skeptic of web3 as it tends to be defined, but I really appreciate this viewpoint. Web3 has tons of flaws but many of the motivations and ideas are interesting, powerful, and could be molded into something really amazing for the world. And The HN community has a chance to be a part of that process.

It helps that web3 is poorly defined, too.

Yeah! Tell me more

Let’s start with Scuttlebutt. It is decentralized and append-only but doesn’t use a blockchain nor any proof systems. Could something like that be useful for other scenarios than chat to meet the goals of web3?