Let’s Argue About Web3! 

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Popcorn in  hand, I’ve been watching the recent religious war between tech leaders, and I find it all quite…wonderful. It’s been a while since we’ve had this level of disagreement about the future of what we used to call “our industry,” and as long as the debate remains relatively civil, I’m here for it. Then again, we’ve already seen trolling (Elon Musk), blocking (Marc Andreessen), and shitposting (Jack Dorsey) from some of the biggest names in tech. But hey, at least the arguments are getting aired out.

So what are we arguing about? In short, the future. Nothing is more sacred in the world of tech – the industry has defined and owned the future’s brand for as long as I can remember. Arguing about how that future might play out used to be a full time gig for many of us. It was at the center of our editorial mission at Wired – to paraphrase founding editor Louis Rossetto, our job was “to make a magazine that felt like it was mailed back from the future.” But around a decade ago, arguments about the future subsided – what was the point, given that future had consolidated into a handful of technology titans like Facebook, Tesla, Apple, Google, Netflix and Amazon? Whatever gifts or perils the future might bring, one thing was certain: The tech giants owned it. Where’s the fun in that?

This turn of events was profoundly dispiriting for some, particularly those of us who had taken the red pill at the dawn of the commercial internet. Sure, I moderated a conference on Web2, and I wrote a book on search and Google, so watching Web2 businesses grow into the most successful firms in the history of business was … cool, for a while. But by 2012 or so, I had lost the optimism and excitement I once had for the industry. It felt like our dreams for a better world had been hijacked by centralized models of capital, and the future had become predictable again. Boring.

But over the past few years, a renewed vision for the future has been on the rise. Yes, I’m going to call that renewed vision by the name absolutely no one can agree about: Web3*. The word itself has morphed over the years – for a brief minute, we thought Web3 might mean “the semantic web,” but by 2012, when I decided to stop producing the Web2 conference, it became something of a private joke between myself and my partner Tim O’Reilly. Whatever came after Web2, we agreed, it certainly wouldn’t take the nomenclature of a software upgrade!

When we started Web2 in 2003, it was clear the tech world was in the midst of a huge transformation – the first iteration of the Web had bubbled up, gotten traction, been hopelessly over hyped, and then went bust.  A few years later, something new was rising – a second phase of the web that we believed would take all the goodness of what came before, and add a ton more value. The transition took about a decade – the Netscape IPO was in 1994, and the first Web2 conference was in 2004. It’s been 17 years since then. Might such a transformation finally be underway again?

Well, that’s the rub of the argument. Just a few weeks ago, Tim kicked the debate into high gear with an essay arguing “it’s too early to get excited about Web3.” His core point quotes the technology cycles theory of economist Carlota Perez, whose work notes that technological progress is always accompanied by financial bubbles which over-invest in important new infrastructure. These bubbles always burst – and the true value of the revolution is consolidated afterward. So where are we on this cycle now?  Tim posits a key question: “Is abundant financial capital building out useful infrastructure in the way that we saw for the previous cycles?”

And therein lies the fodder for the past few weeks of Web3 backlash.  Established VCs poured $30 billion into the crypto space this past year – more than in all prior years combined. The lead dog in the space? Andreessen Horowitz, one of the most profitable VC firms of the Web2 era. This has led many Web3 detractors (and purists) to proclaim that the same forces which begat Facebook (Marc Andreessen is a board member) will lead Web3 into yet another centralized corporate power grab. Here’s how Jack Dorsey summed it up:

This tweet set off a firestorm – I’ll leave it to you to read the fractal threads and comments (it’s great fun) – a who’s who of crypto leaders, investors, founders, and pundits weighed in. The argument turned on one key idea: Decentralization. Proponents of Web3 wrote defenses of the core thesis – my favorite is Albert Wenger’s Web3/Crypto: Why Bother, which focuses on why “inferior” approaches to technology (in this case, decentralized blockchains/databases) might actually prove far more valuable in the long run. Opponents argued that Web3 is just more of the same bullshit, just with better marketing and, as Jack pointed out, the same VCs behind it all.

Over the years I’ve become less of a starry eyed techno-optimist, and more of a “show me the results” kind of pragmatist when it comes to what technology can do. I can nod my head along to both lines of reasoning – but I see no value in maximalism at either extreme. If Web3 is really going to be a thing, it must incorporate the lessons of the many, many things we got wrong with Web2’s business models and governance. But that doesn’t mean we shouldn’t celebrate the billions of dollars of risk capital being injected into our industry, most of it with the express goal of building something utterly new. Oh, and by the way – most of the value in today’s crypto world was built with absolutely no venture investment (the same was true for the original internet, for what it’s worth).

No matter what, it’s refreshing as hell to see our industry actually debate important ideas like trust, governance, and decentralization, and to fret – openly and loudly – about how the future might turn out.  Onward!

*If you’re looking for a quick primer on why many are excited about Web3, read Chris Dixon’s “Why Web3 Matters” and “America Onchain” by Jarrod Dicker. Yes, I’m aware they’re both VCs, and I’m OK with that…