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Keep the web free, say yes to Web3

A response to the yesterweb article

Note: I’ll probably refer to Bitcoin specifically in this article, but I’m referring to crypto at large.

I’ve got nothing against Yesterweb people, really. I think that I agree with them on a lot (though I think that having a Discord is hypocritical). However, I’ve had Web3 stuff on the brain for a while, and, seeing this button around a lot lately, I decided to give my two cents on the matter.

Their article has a pretty good definition of what Web3 is (never heard the term “DeFi” before though), so I recommend you read that before you read this.

>implying anyone's reading this

It’s being driven by predatory marketing tactics

This first argument is interesting, as it sets themes common to the other points that come up later. The annoying thing about this article is that it takes critiques of capitalism—legitimate critiques of capitalism—and directs them specifically at Web3.

The argument here against Web3 about advertisement can be applied to advertising as a whole. It is almost always predatory. Their argument here seems to be that normal people can also benefit from other people adopting it, which is somehow bad.

There are also aspects here that critique social media more than Web3. Hype has gotten many people to buy into things that weren’t everything they thought they were: see No Man’s Sky. The key is that hype is a people problem, not a product problem.

[E]very coinholder has a financial incentive to be their own marketer in order to increase the value of their own assets and can resort to any means necessary.

Apparently it is now impossible to be genuinely excited about a new technology, although I suppose that these are essentially internet reactionaries who wrote this. There’s another theme of the article here too. The writer falls for the same trap that many anti (and even pro) crypto people fall for: thinking that crypto is an investment, or a way to make money. Cryptocurrency is not an investment—it is a currency.

Understanding this, it is much easier to spin a narrative where the owners of a currency want more people to get in on it because they think it’s a good idea, and they want to be able to buy more things with their cryptocurrency—something that will only be possible if it sees widespread adoption.

In addition, it is worth noting that if you have to refer to something as a “community,” it’s not. Coinholders are not a monolith, and they all have their own motivations and goals in crypto.

There is an interesting little nugget in the article’s definition of a Ponzi scheme:

These types of schemes are run by a central operator who uses the money from new people to pay off the original people with their promised returns. This makes the operation seem profitable and legitimate, even though no profit is being made. The person running the scheme usually either pockets the money or uses it to expand the operation.

Let’s hear that again.

These types of schemes are run by a central operator

I would like to speak with the CEO of Bitcoin, please. I wonder how they managed to centralize the “decentralized finance” community.

Also, all of the “original people” would have bought a few Bitcoins back when doing so was something people would call you stupid for, if they knew about it at all. They weren’t “paid off” for their joining in, they honestly thought Bitcoin was a good idea and decided to put some money into it. The fact that Bitcoin ended up becoming valuble was something that none of them were promised or even expected.

This is also the first point in the article where we see the writer linking to a major news network. The state of journalism is outside the scope of this article, but it’s interesting that the Yesterweb writer sees these infamous establishment defenders as acting in good faith, but everyone who gets excited about exploring new technology is out to take all your money.

It’s impossible to fully understand without complex technological and financial knowledge

Yes, because the American financial system is so minimal and easy to understand.

Interestingly enough, there are actually very few Americans who fully understand the American financial system, and that’s been around for a whole lot longer than blockchain technology. And all they hear about them is media disinformation painting them as scams with a central leader, or as investments, or as a fad.

Americans interact with their financial system every day despite the complexities, and that requires trusting way more people than bitcoin. Even to send $15 to someone, you need to trust credit card companies, banks, maybe PayPal, maybe Patreon, and more. And they trust it because the media tells them they can. To send 15 bitcoins to someone (pretend that’s realistic), the only person you need to trust is that someone. That’s why Web3 technologies are important: they eliminate excess trust. Don’t you think that bankers and credit card companies and such would have a vested interest in keeping bitcoin from becoming big? Don’t they have power? Certainly, and they have much more power than most coinholders.

It is actively harming the environment

I’ve never been the biggest believer in man-made climate change. However, I think that protecting the environment is critical nevertheless, so this argument does resonate with me. However, I think that we should focus this eco-friendly urge towards developing more eco-friendly ways of mining crypto, instead of throwing the baby out with the bathwater.

After all, electricity production has long been harmful to society, but instead of scrapping electronics, we’re trying to develop eco-friendly electricity production. Whether these attempts are actually succeeding is a subject for another article, but regardless, why should crypto be any different?

It caters to early adopters and whales

Again, this isn’t a critique of crypto as a currency, this is a critique of crypto as an investment. You can tell because this is how all investments work. It’s not even a critique of crypto. There is nothing inherent to crypto as a technology which gives it this property.

Stephen Diehl described crypto in a recent interview as “a giant regressive tax that transfers money from the poor and illiterate, to the early adopters and the investors and the technologists.”

Surprise surprise, the software engineer doesn’t know what a tax is. This is one of those arguments that’s so stupid, it’s hard to refute. How did those poor and illiterate people buy crypto in the first place? Why did they sell it? Why did they choose to buy when the price was high and sell when it was low? Not that you should treat crypto as an investment (because it’s not), but if you’re going to anyway, you should at least consult someone with good investment sense first.

He goes on to say, “The only real kind of end game is to recreate the system that already exists but with new players controlling it.”

What an insightful comment. Apparently, the people making a new currency are making that currency work like a currency. Here’s my question: is it better or worse for people than the old system? I think that having full control over their money instead of leaving it in the hands of banksters empowers people.

It’s like people don’t understand that currencies can fluctuate in value. What do you think happened during the Great Depression?

The real problem here is that crypto hasn’t seen enough adoption, so it causes people to treat it as a product, rather than the thing you might use to buy a product. Ironically, they way to protect people from the massive highs and lows of the crypto market is to get more people bought into it, since people would want to keep their crypto to buy things with, rather than treating it as an investment.

It profits off of artificial scarcity

This might be the most brain-dead argument in the entire piece. You know what else profits from artificial scarcity? Literally every single fiat currency on the planet. NFTs take more work (i.e. electrical power) to mint than a dollar of any fiat currency currently in use, I guarantee.

Currency is one of those fields where we have overcome scarcity, but because of the scarcity of the things that you buy with it, currency has to remain scarce to keep any value.

Physical art also profits off of artificial scarcity. Do you know how many times I have recieved a printout with the Mona Lisa on it? You could say that a printout is different because it doesn’t have the physical paint and texture of the brushstrokes—true, but there are people who can recreate paintings such that your average person wouldn’t be able to tell it was a fake. You could say that it still wouldn’t be exactly the same as the original because the brushstrokes and paint are still different in the fake, they’re only very close—true, but does the same argument not apply to cryptographic hashes? Two things that are practically indistinguishable, yet with the correct knowlege and tools can be told apart?

The pump and dump thing is once again treating crypto as an investment (and is also possible with other investments).

Investors are banking on Web3 and they really don’t want to be wrong

News flash, the US dollar has people banking on it too. It is unfortunate that crypto is becoming more and more corporate (and thus more and more centralized, with things like Lightning), but that’s the beauty of it: it’s all fully free, open source software. It can be forked.

Obviously, the more mature cryptocurrencies are your safest bet, since they have the lowest chance of being scams (yes, there are crypto scams, just like how there are non-crypto scams), but one of the big advantages of crypto is that if a project becomes co-opted by hostile forces, it can be forked and changed. You can’t fork the US dollar, despite how bad things have become surrounding it.

A note on Ethereum

In this section of the article, the writer talks about how there are bugs in a piece of software.

In all seriousness though, bank systems are hacked all the time. There’s no difference between that and smart contracts being hacked.

Conclusion

It seems that the writer of this article has made a few fatal flaws:

  1. He thinks that crypto is an investment
  2. Despite this, he applies critiques that apply to all investments solely to crypto
  3. His technological conservatism has blinded him to the nature of the modern web

This last point is the most important, because it feeds into the other two. The writer clearly does not recognize that the nature of the internet has changed since the time he’s trying to harken back to. He is reasoning backwards because he doesn’t see a reason for crypto to exist, or feels that his ideal web threatened by it.

We live in a time when most purchases happen on the internet. We live in a time when the financial system has grown so bloated that you need to go through several layers of trust to send some money to your friend. Unfortunately, most of these genies cannot be put back in their bottles (barring anything short of those climate disasters the writer was talking about), and so we need to adapt our financial system to conform to or, really, protect people from these new conditions. The world is almost certainly moving in an increasingly digital direction. We ought put in some safeguards before it’s too late.

Remember: those pushing against Web3 and anything else crypto-related are those who stand to lose control from its adoption.