Meanwhile, Blockchain technology watcher David Gerard told us: "web3 is a marketing buzzword with no technical meaning. It's a melange of cryptocurrencies, smart contracts with nigh-magical abilities, and NFTs just because they think they can sell some monkeys to morons."
So why all the hype? Because the idea of a decentralised online "ecosystem" based on the blockchain is being boosted by Silicon Valley VC Andreesen Horowitz among others – the company that helped get Coinbase off the ground. Co-founder Marc Andreessen sits on the
- International Monetary Fund warns crypto-related risks could soon become systemic
- Google launches lawsuit against a blockchain-enabled botnet
- The dark equation of harm versus good means blockchain’s had its day
- BadgerDAO DeFi defunded as hackers apparently nab millions in crypto tokens
The core argument around cryptocurrencies is that, despite their extreme volatility, on average, their valuation continues to grow, and so people think that they can get rich. Pyramid schemes do work, for a while, as long as people keep buying into the scheme – pouring new money in, inflating the fund, and so tempting new investors. It looks like a good investment, which is very tempting. Some people invest a lot. For instance, a certain Andreessen Horowitz has put in $2.2bn.
Sometimes, snark contains some truth. Bitcoin is "a system designed to teach libertarians that financial regulation is actually a good thing," Robert Synott opined in 2014. And some libertarians, as John Spaulding observed recently, are like house cats: convinced of their fierce independence, while utterly dependent on a system they don't appreciate or understand. That's why some of us call Bitcoin Dunning-Krugerrands.
And if cryptocurrencies are no good as money, at least you can buy and sell NFTs with them. Which means you need places where you can trade in these fancy signed bookmarks, using imaginary internet species. Voilà: web3.
If you will forgive us for paraphrasing the great Douglas Adams, Web3 is "a myth, a fairy story. It's what parents tell their kids about at night if they want them to grow up to become economists." ®