Does Web3 Really Have a Future?

Image source @Visual China

Text｜Old Lining

World Wide Web inventor Tim. Berners. Lee put forward the concept of Web3 in 1998.

However, at that time, Web3 meant the semantic web, and the semantic web was completely different from the popular Web3 today. As for what the semantic web is, those who are interested may wish to Baidu.

The currently popular Web3 generally refers to a decentralized network based on blockchain.

At the beginning of the year, I wrote two articles about the Metaverse. To put it bluntly, the Metaverse is an Internet based on vision. It will not affect development whether it is decentralised or not. From the perspective of business logic, the future of the Metaverse is very reasonable. Of course, the final winner is AR. It’s still VR, let’s continue at this point.

Web3 is different from the Metaverse. A purely decentralized ecology has never been realized in human history. Moreover, from the perspective of known capabilities, blockchain has a high probability of not changing history.

The more absurd remarks, the easier it is to deceive people. If there is a consensus among fans, there will be an economy. This is the feature of making money in this fertile technology field.

The network effect paradox

As we all know, the success of Web2 comes from a magical network effect.

The information of one or two people on the Internet is not addictive, and the information of a group of people can find more fun. Conversely, for Internet products, as long as the number of users reaches a certain critical value, everyone will automatically move closer, and from then on you can’t leave you after a thousand times of abuse. The so-called pricing power is obtained, so most Internet products are basically a one-stop shop. Eat the whole market.

WeChat, Douyin, Baidu, Taobao…everything that can be called a name has used this magical rule. Moreover, once the product giants who understand the rules and capital are bound, they will kill the red eye when they enter any market, and they will only strive for the first place, euphemistically called: subversive transformation. From then on, countless red envelopes for taxis, gold coins for extreme speed editions, bicycle cemeteries…

Metaverse is taking the same route as Web2.

Decentralized Web3 is different. In addition to creating the financial magic known as “digital gold” like Bitcoin, the blockchain is not very good in other aspects. More importantly, the blockchain is in addition to that financial magic ” Consensus”, it is difficult to play the magical network effect value.

This conclusion may be to offend many Web3 evangelists.

The decentralized structure of the blockchain is the famous proof-of-work, which is commonly known as the miner. Simply put, many people keep the same ledger, and everyone has their own independent password for the ledger. Whose ledger is different from others? Then someone must be wrong.

This encrypted accounting method maximizes security. It is actually the most clumsy accounting method for multiple people to record the same account book. The result is easy to draw. The more accounting nodes, the redundant computing power required. bigger.

And the biggest disaster is that if the ledger reaches a certain critical value, the increase of accounting nodes will overwhelm the peak capacity of the entire network protocol. After that, every additional accounting activity will affect everyone’s accounting network. This has been proven. The mainstream encrypted tokens such as Bitcoin and Ethereum are often purchased after a long time before they arrive in the account or the purchase fails.

Proof of work is brought into Web2 products, this feature can be called negative network effect, which means that the more users, the worse the product experience. For products like WeChat and Douyin with hundreds of millions of daily DAUs, moving to Web3 would be a disaster for everyone. The speed of the network will instantly return to before liberation, and you can’t say that it is down.

The technical claim paradox

After all, the blockchain is an encrypted network. Everyone is just a Token without any identity information. Even in Dao, which is known as a distributed autonomous organization, it is only a cold voting right, without any humane social activities. .

This is the most ironic thing that happens, all the propaganda of Web3 decentralization, whether in the future and now, will still be in the Web2 network, if so, why is Web3 called Web3? The same is true now. The largest crypto exchange Binance, NFT exchange OpenSea, etc. are still the centralized network of Web2.

Once again, I feel that the Metaverse is much more reliable.

Without identity information, Web3 will basically not produce identity-centric social products like WeChat and Bilibili. There is no social stickiness between identities, and it is unknown whether the other party is a man, a woman or a dog. Even if the number of users is increased, how much network value can be increased.

Pure profit-driven will not make people stay for long, such as Qutoutiao. Most of what we talk about on Web2 is applications. Although they have different Android and Apple models, they seldom care about the difference in the application market, and the application market itself serves applications. Suppose the AppStore has removed WeChat or Station B. I think many fruit fans should not hesitate to throw away Apple for Android.

Since the advent of Bitcoin in 2009, the main focus of the blockchain is still on the protocol layer. Most of the application layer is in the stage of gimmicks.

Furthermore, Web2 developers develop applications in different markets because there are different hardware such as Windows, Android, and Apple systems. Web3 currently does not have any dedicated hardware except for miners, and it does not see what it can have in the future.

In this case, developers can create Dapps in the Ethereum chain ecosystem, and users can easily jump to the Solana chain or other chains, and no matter which blockchain has no guarantees for applications in its own ecosystem, it also limits application development. Unlike Web2 developers, behind Apple, Android, and Windows, hardware provides the basic ecological guarantee for developers.

For the third time, I feel that the metaverse is reliable, and AR/VR at least have glasses hardware.

Applying the claim paradox

NFT represents the blockchain application layer. There are actually a lot of fun things in it, and it always gives people the illusion that they can get rich overnight. If you go deeper, you can enjoy the “big drama” of Taiwan’s power and conspiracy, and various psychological warfare between dealers and retail investors. Of course, both bookmakers and retail investors are now speculators.

There is a well-known and common fun mode in the foreign currency circle called “Vampire Attack”.

Although the vampire attack is a story of the application layer of the blockchain, the story will not only happen in the blockchain, but the reason behind it is actually those Web3 fans who want to subvert those Web2 models that revolve around Web3, such as centralized exchanges.

Everyone on earth knows that Changpeng Zhao is the richest man of Chinese descent, because he just created a Web2-mode centralized trading application “Binance” to earn transaction fees. Since there is a centralized trading application, fans of the magic like Web3 can definitely go there. Centralization, so DeFi was born. The largest application in the decentralized DeFi protocol is Uniswap based on the ether chain. It was born in 2018, and the most famous vampire attack was related to him.

DeFi simply means issuing new coins to exchange other coins, so as to reduce transaction fees for “Binance” led by Changpeng Zhao. Since the ledger framework of the blockchain is open, that is to say, although you don’t know who the Token is, you actually know what the Token does. “Vampire attack” is also born because of this feature.

The reason for this feature is that the user behavior in the Uniswap application is public. At this time, a competing product called SushiSwap came out. Using this account book opening mechanism, it directly pulls Uniswap users and sends their coins through airdrops (equivalent to sending red envelopes). For those Uniswap users, and the fee is lower, it successfully took away a lot of Uniswap shares.

Another well-known vampire attack is more direct, the recent application battle between Web3 and Web2 in the NFT field.

The largest centralized trading application of NFT is called OpenSea. The competing product LookRare hopes to defeat OpenSea through the decentralized application model. Therefore, the LookRare team also uses the open framework of blockchain to identify users who have traded more than 3 ETH in OpenSea within half a year. Then directly airdrop their own LOOKS tokens to these users.

Users who want to get free LOOKS tokens must list NFTs on the LookRare exchange. In this way, LOOKS tokens have gained a market value of $1 billion within 10 days.

Of course, no matter SushiSwap or LookRare, vampires are still vampires after all, and they always don’t follow the path of ordinary people. Compared with other conservative speculators, they are more speculative. They cut retail leeks through a large number of wash trades, but in the end they did not develop for a long time and basically returned. prototype.

Whether Defi or vampire attack, it is actually a model of Web3 applications challenging the Web2 model. This routine will definitely be applied in all aspects in the future, but until now, even near the base of the blockchain, the centralized application of Web2 is still more successful.

NFT Value Paradox 

NFT seems to be very successful, sky-high emoji packs, instant-to-play games, sky-high virtual real estate… lively and noisy.

It’s just that no one has ever explained why NFTs are worth sky-high prices.

Are NFT astronomical avatars really more irreplaceable than traditional custom avatars? Is NFT game real estate really more useful than real real estate? Are NFT game props really more awesome than traditional online game props? Are NFT art collections really safer than offline art collections?

At least in my opinion, the above answers are all No.

1. Not to mention, the avatar of Lao Lin, drawn by a designer friend with reference to a certain photo, is irreplaceable for individuals, because it is the person at first glance.

The most expensive NFT ever traded is worth $91.8 million, called “Merge”, and 28,983 users bought 312,686 copies of NFT. Other well-known NFT avatars such as Boring Ape and Cypherpunk can be auctioned for hundreds of thousands to tens of millions of dollars.

But in reality, these avatars can be freely converted into JPG or PNG and other image formats and use T, because except for Token, these avatars themselves are not protected by any intellectual property law. If you give most people a multiple-choice question, whether to buy NFT avatars or realistic art paintings for millions of dollars, I think the answer is beyond doubt.

It’s not to refute the consumption willingness of a few rich people, but since it is called Web3, it should be aimed at the ecology of most people, otherwise it should not be called Web3.

2. Speaking of games, if the number of players in NFT games is large, the reasons mentioned in the first section will immediately lead to network congestion. The most direct consequence is that speculators create similar games and poach some users, which will alleviate this embarrassment, but Lost items in Web2 online games can be retrieved by customer service. If NFTs are lost in Web3 games, it is really lost.

NFT games are currently attracting users through token incentives. In fact, most of these users are not real gamers, but speculators attracted by interests. Speculators, speculating to make money is only natural, and if you don’t make money, you don’t hesitate to leave immediately, so In fact, there are not many loyal players in NFT games, and the value of NFT props and real estate in it is even a Ponzi scheme.

It can be seen from the open data of the blockchain that most of the tokens are basically gathered in the hands of the top 10% of the dealers. Bitcoin is even worse. 2% of accounts own 95% of the coins. The so-called value consensus is basically the consensus of a few people.

3. When it comes to collection, irreplaceable security is the biggest slogan of NFT, but as we all know, 51% attack is the safety point of blockchain, that is to say, if the number of bookkeepers reaches 51%, the ledger can be tampered with, of course the volume It is very difficult for a 51% attack to be as big as Bitcoin and Ethereum, but those small applications that are just born are very easy and very often subject to such attacks.

Jay Chou was just stolen a while ago. Similar news has emerged in recent years. Traditional collections have property rights certificates, and there is a chance to retrieve them if they are stolen. NFT collections are stolen forever. Where is it safer than traditional collections?

Decentralized Value Paradox 

For a long time, various big names have advertised the most decentralized democratic values ​​to the Web3 platform. In fact, at least the technology of blockchain cannot achieve decentralization.

Are Proof-of-Work Consensus Miners a Democracy? It’s just a matter of giving more weight to organizations with a lot of computing hardware; are the token buyers and sellers of proof-of-stake consensus democratic? It also allows the rich to have more privileges than the poor, and with more rights, they can control the voice of the Dao organization.

How is this better than a centralized organization? More redundant work can provide more people with career opportunities?

The only mechanism for blockchain to ensure security is a large amount of redundant workload, not to mention huge power consumption and 51% attacks from time to time. 2% of the accounts own 95% of the bitcoin supply, 0.1% of the miners have mined half of the bitcoins, and 9% of the accounts own 80% of the NFTs on the ether chain. The role of retail investors has always been a leek.

When Ethereum was launched in the early days, the project party only controlled 15% of the shareholding ratio. In the development of the current Web3 project, the project party will control at least about 40% of the shareholding ratio, and project parties/users with a ratio of 80/20 are everywhere. Yes, where is the decentralization embodied?

Fundamentally, human history has never seen a completely decentralized ecology in any field.

This is the basic common sense of the theory of evolution. The complex and advanced system ecology does not succeed overnight, but evolves from countless mistakes. Decentralized bookkeeping (development) has no fault tolerance, and other forms of bookkeeping (development) models are not allowed. It needs to be perfect from the beginning. No ecological system can evolve through an environment with extremely poor fault tolerance. Blockchain Neither.

So the decentralized Web3 itself is a false proposition.