Alarm bells ringing over possibility of getting caught in Web 3.0

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Every time I hear someone talk about “crypto” – that cryptic set of technologies that includes things like blockchain, bitcoin, and NFTs – every alarm bell in my head goes off.

More than once I have said to myself: this all sounds like a scam.

But even questionable technologies can have real effects. Just this week, a group of crypto enthusiasts got together to try and buy one of the remaining 11 copies of the U.S. Constitution.

The future is going to be, at the very least, very, very strange.

But crypto is one of a growing set of ideas grouped together under the moniker Web 3.0. It’s a collection of technologies and ideas loosely organized around blockchain that, at least according to proponents, promises to revolutionize commerce, the way we organize ourselves, and perhaps even democracy itself.

Others, however, claim that Web 3.0 is nothing more than a Ponzi scheme.

As happens with these things, the truth is probably somewhere in between, with the caveat that, like with Web 2.0, there’s a lot of hot air, money, and bad faith in the mix.

Perhaps more importantly, as has also happened with Web 2.0, however few fundamental and promising ideas there may be, the influence of money, business models and greed can quickly put an end to all utopian ideals.

Understanding Web 3.0 first requires some understanding of blockchain.

Basically, the blockchain represents an immutable ledger to record any data exchange. A financial transaction is the most common example, but it can also be a certificate of ownership, or even just belonging to a group.

Unlike most computer data, which is by nature changing, blockchain is a permanent record, and part of its permanence and security comes from the fact that it does not exist on a server somewhere, but is decentralized. , distributed over the mass of users. whose individual pieces collected constitute the blockchain itself.

The most common application of this permanence is to record financial transactions in the form of cryptocurrency, which gets its name from the complex cryptography used to secure the blockchain.

Bitcoin and Ethereum are the two most common digital currencies, although given their wild and volatile prices, their potential for use as traditional currency is still uncertain.

But Web 3.0 is also a set of principles that are also based on the notion of decentralization. Unlike Web 2.0, where big companies like Facebook, Google, and others essentially control and run the services we use on a daily basis, Web 3.0 is an attempt to distribute things like ownership or commerce over networks so that nobody owns it.

In the case of the US Constitution, the group that tries to buy it uses a DAO, or a decentralized autonomous organization, to pool its resources. As the name suggests, no one is responsible.

In theory, then, Web 3.0 looks like the realized ideal of democracy, and that is indeed how crypto enthusiasts often talk about things. With decentralized organization and commerce the line goes, the individual is finally free. No more banks or governments meddling in financial transactions, no more top-down organizations, and now there are even ways to monetize digital goods.

This, however, is only in theory.

The problem with Web 3.0 rhetoric is that it clashes with both the realities of the physical world and the legal and social structures within which they exist.

Take our budding constitution buyers: as the Wall Street Journal points out, even if their bid is successful, who will get it?

It can be easy to forget, but in democratic capitalist systems things like property are tied to things like the individual or society, as well as private property laws.

The problem with decentralized systems is that the basic concept of owning something changes, and our laws or the practical realities of physical things don’t easily match the airy ideals of cryptography.

Far from some sort of proto-Communist or utopian rejection of commerce, however, one of the main issues with Web 3.0 is that it promises to commercialize everything.

Take NFTs, or non-fungible tokens, the most recent hot topic in Web 3.0. They are basically a way of indicating ownership of a digital item – a digital trading card or a work of art.

Note, however, that you don’t own the thing itself, as digital things can disappear, or just be copied; you just have a certificate saying that you own the original thing.

Sounds like a scam, doesn’t it?

Always. When the car was invented, no one understood that it would lead to things like Costco or the suburbs. The effects and applications of technology can be unpredictable, and maybe there is some truth to all of the hype.

But like Web 2.0 before it, charlatans and capitalists are working hard to popularize something with many drawbacks – and the alarm bells, to say the least, are more than appropriate.

Navneet Alang is a Toronto-based freelance tech columnist for The Star. Follow him on Twitter: @navalang

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