Ask HN: If Web3 just a P2P database is it incapable of fulfilling its promise?
HN had an article about how web3 is just an expensive p2p [1]. If that is the case then its core promise - of an internet where content is owned by its creators, can't be held hostage by tech oligarchs and can be moved anywhere its creator wants, is impossible to fulfill from the start. The data will have to be created by apps that are going to be coded by tech companies. What is from stoping them from adding data to the blockchain in a proprietary format? Won't that defeat the core promise? But then I can't reconcile it with the ebullient shower of praise by the likes of A16Z[2]. What am I missing in trying to understand web3?
[1] https://netfuture.ch/2022/05/web3-is-just-expensive-p2p/
[2] https://a16z.com/wp-content/uploads/2022/05/state-of-crypto-2022_a16z-crypto.pdf?utm_source=tldrnewsletter All blockchain is a ponzi scheme. Reasons to give your money to the blockchain: currency of the future (Bitcoin) -> trustless computing (Ethereum Classic) -> trustless computing with that one bug fix (Ethereum) -> store of value (Bitcoin, Tether, etc...) -> digital assets that you really own and we ignore copyright and existing laws that might cover this subject (NFT's) -> vague web3 promises. Next year it will be something else, or maybe they will circle back to the beginning (Future of currency! Fundamentals!), but the only reason anyone really buys in is because they believe they will make money. A16Z has no problem running a ponzi scheme. If blockchain were actually useful, why wouldn't they just pour all that money into Bitcoin? there is no need to "invest" in ethereum in order to use it. if you wish to send 1000 USDC to a friend in another country, you can buy that amount, send it to them, and then exit the ecosystem entirely. if you want to buy an artist's work to support them, you can purchase some ETH, purchase the NFT, or just send them the ETH if you'd rather, and then hold no more ETH than you need to pay gas fees. the idea that crypto requires constant investment is something that is pushed by laser eye btc bros but is not how these networks will be used in future. Isn't this exactly why some people are buying into it now? Entering and exiting the ecosystem to fulfill a trade takes time, and during that time you hold crypto of a certain value An increase of concurrent trades means the value of the currency goes up if the amount of currency being used for trades remains the same. A commitment to HODL means a removal of currency from the trading pool. So by shrinking the trading pool and increasing the trading volume of people entering and exiting the pool in short time frames, the value of the currency increases. Trying to cash out a large wallet would increase the trading pool and decrease the price. You may not ever be able to actualize the full potential of what your wallet says.. but you can easily get more out of than you put in without it being a ponzi scheme. You are providing capital backing for other people to enter and exit the ecosystem, which has value. When trade volume increases, you can sell some of your wallet to cover the trade volume and keep price stable. If you don't, then the person who entered and exited the market during the increase will get more value out then they put in (less gas and fees) No one needs to be left holding the bag unless trade volume decreases to 0. And there is no need for trade volume to decrease to 0 if people are aware of the currency and have access to exchanges to be able to quickly enter and exit the ecosystem have you ever looked at USDC and ETH order books on CEX or DEX? they are handling billions of dollars per day. unless your wallet is holding hundreds of millions of dollars in crypto you can make orders on these platforms without making a dent. your 1000 USDC transfer may have some minute effect like a single drop of water in the ocean. in reality you but some ETH to cover the transaction, then spend/burn it in order to fill the trade. maybe later your friend will have to pay more or less or the same than you did in absolute USD terms to cover gas costs to exchange the USDC for another asset depending on the future market conditions. and these are risks both parties should aware of , the ledger is not free but the take-rate and fees are notably different than VISA and PayPal I think we agree? If they are handling billions in trades per day that means trade volume is up high. A small personal wallet may not matter, but the combined value of all wallets not involved in those trades does matter. Effectively, by holding I am saying "the ratio of trade volume to available currency is going to improve the value of the currency over time" I am not saying "I will be able to find some idiot to buy my crypto for more than I paid for it as part of a ponzi scheme" ah yes then we agree. especially because each transaction burns ETH thus reducing supply and making token more scarce. tho I do not think it will always translate to higher market price and valuation in future since the price is determined by a range of factors that are impossible to predict like bugs, stagnation, quantum crypto cracking or just global market fluctuations. this is where I say it need not be seen as a pure investment. market price of ETH might be the same in 1 or 10 years as it is today and network will still have created utility and value all that time for those that did not view the base token as a pure investment. This seems like a quite disingenuous set of statements. By using the ecosystem, whether through purchasing ETH, NFTs, so on, you're investing into the ecosystem. You're inflating the amount of transactions that occur, you're appearing as a user of the ecosystem. It's not so much constant investment so as much as by using it, you're participating in the scam, you're the guy holding the bag at the end or effectively keeping prices inflated for worthless tokens by purchasing them at the amount they're "said" to be worth. take USDC: you purchase it on CEX or DEX, and transfer to your friend in another country who does not have a US dollar bank account but may have a custodial or non custodial ETH address to receive crypto. they can choose to hold or sell or exchange it for any other asset in the network. your “investment” in the USD or ETH required for fees is like the fees paid to PayPal or Wise during a transaction. paying these fees doesn’t mean you are now a PayPal investor or have any stake in whether their corporation does well. if this is all a scam to you then there is not much I can do to change your mind. saying crypto as a whole is a scam is equally as silly as saying the stock market as a whole is a scam. they are both financial instruments at this point with different risks. edit: the point of my post is to say that you ETH is not about buying the token with expectation that it will go to moon. you can just buy it like you would tokens in an arcade - you use the tokens for fees in transactions in order to accomplish whatever utility the chain provides, maybe with the vast majority of your holdings and interactions in USD pegged assets with no expectation they will moon. Web3 is a loosely defined trend and every person has different expectations for the changes that web3 should bring. Here's what I personally think web3 can do to change the internet for the better: - Increase proportion of consumer spending that goes to creators (Apple, YouTube, Spotify, etc have egregious take rates from 20-50%) - Create new business models where incentives are aligned. Take a look on HN at the weekly threads about poor Google search results. Subscriptions and micropayments are a no-go for services like Google search. It's time for a new business model for these services and web3 provides the framework to experiment with radically different business models. - Permissionless (and decentralized) finance: if you live in the US/Canada/UK/France/Germany/etc then this might not be much use to you. There are dozens of countries that can benefit from permissionless access to banking. The promise of all the overblown claims made for it? I don't think anything could fulfil that! I'm sure there are some useful applications for blockchain tech, but it's not a fundamental base for a new generation of the internet. However the desire to get out of the highly centralised corporate controlled version of the internet is a good one. Personally I do hope the next generation is based on decentralised/federated tech. Like the "fediverse" systems such as mastodon. I think these genuinely do fulfil some of the promised claims of the web3 bandwagon, but actually have nothing to do with blockchain. However I also doubt if the fediverse will be the future of the internet either, but it's certainly the side of the internet that I'm enjoying right now and shows what a social internet away from the shackles of the big tech companies could be! web3 is completely overhyped and a16z is part of that hype and pouring funds into it. the promise of web3 boosters , "everything will be on-chain" is impossible to realize. maybe best to see decentralization as a spectrum or something that lies on multiple axes. something like an NFT on Eth with IPFS is platform-agnostic and transferable only by whomever has the private key. that owner can also self host the file if they want. but there still will be centralized platforms, pinata hosting, AWS, etc build on top of this ecosystem to make it easier and to attempt to capture value where possible (openSea charges 2.5% on each trade). > "everything will be on-chain" This can be either true or false depending on what is your understanding of how blockchains work and what benefits it brings. Some people will understand it as "some data will be on-chain and all or most businesses will do it", other might understand it as "every bit of info will be on a public blockchain" Blockchains are very inefficient "databases" in the general sense of a database (and also expensive). They are only used because of the security characteristics. Only data that needs to benefit from those characteristics should go there. In my view, the goal of the current version of Web3 (previously, it was Semantic Web) is that applications can be decentralized. Is it possible that software services can be provided that are not controlled by any central authority? Bitcoin, Ethereum, and ICOs show the possibility of decentralized applications. From what I can tell (and how most people think), we are very far away from that promise with the existing offerings. The current Web3 offerings are primarily a speculative play instead of an innovation play. It started as an innovation play and Ethereum was exciting because it suggested a proper focus. I personally believe that it is possible to get there but we need to greatly change the current decentralized offerings. P2P technology needs to focus on innovation, value add, and service offerings to be worthy of being more than a P2P database used for speculative investment and money transfers. > of an internet where content is owned by its creators, can't be held hostage by tech oligarchs and can be moved anywhere its creator wants IPFS > The data will have to be created by apps that are going to be coded by tech companies. Nobody is stopping you from building apps > What is from stoping them from adding data to the blockchain in a proprietary format? Nothing. Plenty of companies use proprietary formats. You can choose to use the company's product or not. On the web3 ecosystem there is code available, at least for bigger and legit projects Also what are the "core promises". Can you be more specific on that? A16Z wants to make money by funding tech companies, so if your perspective is correct they have an interest in hyping it. I have nothing but dislike for anything web3 but you've constructed this question just to milk a negative answer out of people. ``` If (vaguely defined subjective thing) Then web 3[whatever that even is and whatever it's promises even are] are incapable of being fulfilled. ``` I don't think this particularly has any meaning. Might as well just say "I dislike web3" Me too. I'm on your team. What are some examples of web3 products/solutions that are better served on web3 than traditional methods?