This is not the next web you were looking for..

Here is, straight from Usenix, the shortest possible summary of why everybody should be very cautious with everything “web3” until there is more experience, and satisfying answers to certain questions.

“Web3” and “dapps”, that is “distributed apps” are promoted as some great revolution. [But] the actual utility of these “decentralized” systems is already available in modern distributed systems in ways that are several orders of magnitude more efficient and more capable.

But first some terminology. A distributed system is composed of multiple, identified, and nameable entities. The current World Wide Web and the Domain Name System (DNS) used to give names to website are distributed systems.

Exactly because they are built of, and around, “identified entities”, distributed systems are very efficient (think how easy online payments are these days), but also allow eccessive, possibly harmful centralization (think how Facebook monopolizes certain online activities).

A decentralized system, on the other hand, dispenses with the notion of identified entities. Instead everyone can participate and the participants are assumed to be mutually antagonistic, or at least maximizing their profit. This should solve the problems of the distributed systems mentioned above.

Decentralized systems purport to eliminate the presence of gatekeepers like Facebook, Paypal and credit card companies.

But there is a problem as without such gatekeepers there is no efficient solution to the “sibyl problem” (that is, oversimplifying, fake identities)).

The Web3 Vision

What N. Weaver did at Usenix.org starting from the definitions above is to calculate how much it would cost him to participate in Web3, and what he would concretely get in return.

Weaver’s conclusions are that:

• (in December 2021) the cost would be “roughly 20 USD a month”,
• however, on the Internet that actually exists today, his whole Web3 website would still have to sit on “all our existing (normal web) infrastructure”, without removing any of its traditional gatekeepers: hence, “the [Web3] claims of gatekeeper-free decentralization are false”

For the record, just yesterday I reported a completely different way in which those claims are false.

Follow the (crypto-) money

Compared with traditional websites, says Weaver, Web3 only adds an additional layer of complexity in the name of justifying the underlying cryptocurrencies, that is to make sure that “when a user wants to use my service they will pay some amount of cryptocurrency to perform the cryptocurrency-side computation, with any remaining transferred to me as a fee for my service”

Problem is (for all the technical details, see Weaver’s post) the decentralized infrastructure that would make all these cryptocurrency transactions work " has roughly 1/5,000 of the compute power of a Raspberry Pi 4 microcomputer, but is also terrifyingly expensive".

In December 2021, “At the current price of roughly $4000 per Ether this means a second of Ethereum’s compute costs $250. So a mere second of Ethereum’s virtual machine costs 25 times more than a month of my far more capable EC2 instance. Or could buy me several Raspberry Pis."

Besides, not only the system can “only store 3 kB of data a second, storing that 3kB costs $250!"

Even using cryptocurrencies much more efficient of the Ethereum one used in the calculations, the overall cost of the equivalent “web3 vision” would still be “orders of magnitude worse than the conventional distributed solution”.

Our conclusions

Weaver’s conclusion is that the whole web3/cryptocurrency space is, “at heart, simply a giant Ponzi scheme where the only way early participants make money is if there are further suckers entering the space."

My conclusion? Technology changes fast (often too fast, for no reason). I cannot exclude that some technological advance will, maybe just one month or two from now, make Weaver’s calculations completely obsolete. I also welcome any guest post to defend Web3, if you want to write it! But for the foreseable future, don’t put any money into web3 (or cryptocurrencies in general) until you see really, really, really solid evidence that Weaver got something completely wrong. I don’t think he did.