The internet is not just a place for online commerce, but more and more it has become our daily life. It’s what we use to communicate with friends, find love or take care of the global refugee crisis. But that could all change in 2019 if one unlikely group of revolutionaries get their way and reboot the internet as we know it. They are Jack Dorsey and his allies who believe they can save an industry now overrun by trolls. And only time will tell if this revolutionism can succeed on such large scale..
Jack Dorsey is the co-founder and CEO of Twitter. He has been credited with being one of the people who helped to create a new era in social media. However, he is also known for being at the heart of some of its biggest controversies.
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The internet hasn’t worked out the way we expected.
It was designed to be dispersed, user-controlled, and democratic in its early version, before some Wall Street Journal readers were born and the rest had fewer automatically renewing digital subscriptions.
Then came Big Tech, with its associated centralization, windfall riches, cultural wars, disinformation campaigns, Congressional hearings, EU judgements, antitrust lawsuits, and techno-nationalism that defined the previous decade.
What if there was an alternative?
What if, for example, social network members collectively controlled them, or at the very least had a say in how they were governed and what type of speech they permitted? What if identical questions could be asked of every IT firm whose core offering is software and services, whether financial, cloud computing, or entertainment-related?
These are the topics that investors, engineers, and a slew of starry-eyed digital dreamers are pondering, including former Twitter CEO Jack Dorsey, whose interest in these issues explains his abrupt departure from the company.
The answers are in the form of services and apps that are the first outlines of what their creators hope will one day completely consume the internet: a distributed, democratically ruled “Web 3.0” or “Web3” that will rise from the ashes of the corporation-controlled Web 2.0 that we all currently inhabit like a phoenix of 1990s-era Web 1.0-idealism.
Here’s the gist of it: New technologies like blockchain have the potential to loosen firms’ and governments’ concentrated control over everything from internet platforms to intellectual property to money production and distribution. These systems work by distributing responsibility or ownership among a community of users who, for example, utilize their computer power to fabricate—or “mine”—cryptocurrency or keep track of digital art exchanges.
These innovations indicate a step forward in cryptocurrency development beyond bitcoin, which some in the crypto community now dismiss as “digital gold.” The “tokens” that make up these systems are individually encoded with information that has some additional function, such as membership in a club, the ability to vote on how a firm conducts itself, or even simply data.
The blockchains that underpin it all are simply ledgers of data that are saved on several computers at the same time. This makes any particular blockchain resistant to government or corporate control, as well as allowing users to safely and openly trade tokens on that network.
Silver-tongued hype-people of all stripes, from venture capitalists to armchair oracles on social media, are trumpeting this future, a second opportunity to utilize technology to upend established power systems.
Others consider the whole endeavor to be nothing more than a waste of time. They see bitcoin as a money with a large (and, some say, unneeded) energy and carbon footprint. They also see crypto as a classic, doomed-to-fail techno-solutionism (the belief that technology can solve any problem) Ponzi scheme pushed by modern-day medicine-show hucksters eager to get out of unregulated securities before the market crashes or the Securities and Exchange Commission regulates them.
Mr. Dorsey, far from being a quack, is unmistakably a believer—and one of its most famous members. He told investors in July that bitcoin will be a key part of Twitter’s future, and he posted in August that it would bring the world together.
Web3’s attractiveness for many in the tech elite is reflected in his departure from Twitter. Mr. Dorsey is now working full-time at Block, the new name he gave to Square, his digital payments firm, where he is a fervent supporter of bitcoin.
Cash App, which enables users to purchase and transfer bitcoin, is owned by Block, whose name was inspired in part by the blockchain. It has formed a patent partnership to exchange intellectual property and funding connected to cryptocurrency. Spiral, an open-source bitcoin technology development team whose most recent promotional video has a muppet version of Mr. Dorsey addressing the question “When did you realize something was wrong with our banking system?”
Web3 has also piqued the interest of several well-known technologists. Andreessen Horowitz, the venture capital company co-founded by Marc Andreessen, announced the launch of its third fund, worth $2.2 billion, to invest in blockchain and crypto-related firms in June 2021. According to CB Insights, global investment in blockchain companies in 2021 has surpassed all prior records, reaching $15 billion so far this year, a 384 percent increase over total investment in 2020.
Almost every firm that uses the terms “Web3” or “blockchain” in its pitch deck portrays its objective as a user-centered mission to empower—and, in some cases, enrich—its users, turning them into owners and investors as well as consumers.
In many aspects, DeSo—which is a not-for-profit foundation, a blockchain, and a cryptocurrency token all at the same time, but is expressly not a standard for-profit corporation—is typical of the form. DeSo’s concept is that everyone should be allowed to start their own social media site, but that they should also be able to be linked in ways that Facebook and Twitter, for example, could never be—including shared accounts and other shared data.
“The DeSo foundation’s theory is that by combining money and social, you can develop new avenues for artists to monetize,” says Nader Al-Naji, the foundation’s founder and CEO. “Instead of profiting via adverts, producers may monetize using DeSo coins.”
One of Ethereum’s creators, Vitalik Buterin, suggested the Ethereum protocol in part to establish a world where no one business could control digital assets.
Bloomberg News/Bloomberg News/David Paul Morris
DeSo has established a new cryptocurrency (called DeSo) that may be used to “tip” other users for their postings, replacing likes with real money—or at least DeSo tokens that can be swapped for dollars on standard cryptocurrency exchanges. These tokens, like other next-generation cryptocurrencies inspired by Ethereum, can store the data that makes up a social network, such as post text (one of Ethereum’s creators, Vitalik Buterin, was involved with bitcoin early on and proposed the Ethereum protocol in 2013 in part because he wanted to create a world where no single company could control digital assets). Web3’s inspired quirkiness is shown by this dual function: If money can be converted into code, it can be much more than just a medium of trade; it can also do any function that other software can.
True believers in Web3 believe it can have such a tremendous influence because of this key concept, which is a type of E = mc2 equivalency between money and software. Suddenly, any human behavior, from buying and selling a property to like a social media post, may be become a part of a token-based financial system of size and complexity that dwarfs today’s.
Paul Meed, CEO of Moonbounce, one of the firms working with DeSo on an app, believes that leveraging crypto to establish new types of transaction between artists and their followers on social media will eventually succeed, but that the concept and technology are still in their early stages. Most people find the concept of turning every contact between friends on a social network into a monetary transaction weird, and he gets a lot of opposition from young people and fans of artists anytime it comes up.
“I have a guy who has a few million followers on YouTube, and he created one test video where he spoke about NFTs, and it was his most downvoted video of all time,” he says.
Rather of developing a firm and asking affluent venture capitalists to part with money in return for a piece of the company, DeSo sold some of its crypto tokens to early investors, including Andreessen Horowitz. The DeSo currency must be used by every social media service or app established on the DeSo blockchain—there are over 200 of them so far, all of them small. The more individuals and organizations who join the DeSo token, the more valuable it will become. Rather than collecting license fees or selling advertising, this is the company’s revenue plan.
Analogies fail in unique organizational structures like these, which is one of the reasons why most investors are unaware of blockchain firms. Critics believe that the obfuscation is intentional, and that it is as much about concealing suspicious financial and technological engineering as it is a result of any purported business model innovation.
“The current blockchains are like woefully underpowered computers that can only do a very, very small amount of transactions, and the things they can do are shockingly limited,” says Stephen Diehl, a programmer in London who has become one of Web3’s most visible and cogent critics thanks to his frequent essays about the pitfalls of blockchain technology and Web3.
Even many of the more established initiatives to refashion the internet into Web3 are still too nascent to predict if they will ever succeed. Mr. Dorsey revealed in 2019 that Twitter had started a project named Bluesky to “create an open and decentralized standard for social media” before his crypto preoccupation achieved its present apotheosis.
The idea was to turn Twitter or some other new site into a flexible and easy-to-use repository for so-called tweets, which users could sort and see in a range of different applications developed by third parties. Bluesky, which is to be independent of Twitter but has no other partners at the moment, would be more of a service for developers, similar to Amazon Web Services. In this manner, it would vary from a consumer-facing corporation that bears implicit responsibility for everything that occurs on its platform and has the power to ban current presidents, as Twitter did on Jan. 8 with then-President Donald Trump.
Bluesky was driven by Parag Agrawal, Twitter’s current CEO, however it seems to have made little progress since its announcement. According to a Twitter spokesperson, the company is recruiting for BlueSky and is dedicated to the project in the long run. She believes that blockchain will play a key role in bringing the concept to life.
Twitter’s slow efforts to reinvent itself, as well as its co-leaving founder’s of it in pursuit of new methods to reinvent the internet using blockchain at Block, demonstrate the potential and perils that fuel much of the interest in blockchain. “Everyone recognizes the difficulties with social media’s harmful effect these days,” Mr. Diehl adds, “and Web3 has become the messiah technology that’s going to heal all of these things.”
Despite grand promises, it’s still unclear if Web3 and its underlying technologies will be forgotten vaporware or the future global web.
In the future, anybody might manufacture a new crypto “currency” whenever they choose, whether it’s to generate finance for a company, monetize the popularity of social media producers, or raise funds for their school’s PTA. It’s also conceivable that authorities, who summoned crypto startup CEOs to testify before Congress earlier this month, may conclude that the risks of firms issuing what seem to be securities exceed the potential for new financial and technological breakthroughs.
Whatever happens in the coming years, the infusion of cash and interest into Web3 companies and projects, as well as Block and its competitors’ mainstreaming of blockchain technologies, demonstrates how dissatisfied even many of those who built the current internet have become with it—not to mention how much money they believe they can make by solving the problems they created.
Christopher Mims can be reached at [email protected]
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