It felt like everyone I knew was sending me the same link. It now has 2.6 million views. The history of the 2008 financial crisis, the creation of Bitcoin and the rise of NFTs and DAOs are covered in over 136 minutes.
I saw a lot of people dismiss Olson's criticisms out of hand this week. Few people working in the space will be surprised to learn that the current digital wallet is difficult to use and fraught with danger, that the current blockchains are energy inefficient and expensive, and that it is awash in grifts. Many Web3 builders will bristle at his tone, which is condescending and hectoring in the house style of the video essayist, but rather everyone he thinks ought to be afraid of those people.
The force of the arguments is substantial. His essay explains the rise of cryptocurrencies through the lens of rising inequality, pandemic-era isolation and loneliness, self-dealing venture capitalists, and a desperate sense among young strivers that the future is only ever getting smaller. This week's crash in the price ofCryptocurrencies feels particularly timely.
I find the explanation for crypto incomplete. He leaves out a lot of people who have improved their financial situation through investing incryptocurrencies. Even so, many viewers will find it a necessary corrective to the multi-year hype cycle with each new corporate NFT release, celebrity Bored Ape purchase reveal, and surprise token airdrop.
You should watch it. If you are already familiar with the story of Bitcoins, you can skip to the end of the video. If you are one of the people who believes in the future of the internet, you also need to think about it.
It's obvious that today Web3 is a mess, and not just in a C, and we haven't finished building it. Web3 is a mess of a kind that could take five or more years to fix.
I am not sure if people are working on these things. I read through the funding announcements, talk to the product people, and follow the Twitter timeline. The other day I read a long post where investors talked about what to watch in the future, and it sounds like we should be watching music NFTs in 2021. The infrastructure phase is where DAOs are trying things.
It is clear that progress has been slow in too many areas. Let's talk about three things that should be worked on by people in 2022.
Make transactions safe and easy to understand.
There is a story about the blockchain. Some people figured out that some high-priced NFTs listed on the trading platform OpenSea had been listed multiple times, some for a small fraction of what they are worth today. The people took advantage of the fact that the NFTs were cheap and immediately re-sell them for hundreds of thousands of dollars.
You can only list a product for sale once on a good marketplace, and you can't sell it for more than you paid for it. Multiple listings were possible at OpenSea. Transactions are irreversible. The platform reimbursed the loser after they fell on the mercy of the platform. I was struck by what OpenSea said about the issue.
An OpenSea spokesperson told CoinDesk via email that “this is not an exploit or a bug” but rather “an issue that arises because of the nature of the blockchain.”
Imagine if you could imagine how much you had lost because you accidentally listed the same product twice. Imagine if you called the marketplace to complain and the person on the other end of the phone said, "Good news, this is not an exploit or a bug." This is an issue that arises because of the nature of the ledger.
I don't think you would do business with that company again. I can't imagine regular people doing business with this kind of company. I used to think that people who refused to give their credit card information to e-commerce sites were paranoid. Paranoia is a requirement to do any sort of business.
In his video, he says that every smart contract is a bug bounty. The OpenSea story is an example of how to do it. It's remarkable how little progress has been made in the last decade, even though sCAMs and crypto have been inextricably linked. There is an alert about hackers sending people free token that will trick them into emptying out their entire wallet.
Businesses depend on Web3 making services that are broadly safe, accessible, and popular. If Web3 can create comprehensive solutions here, it's time to prove it. OpenSea updated its listings manager this week in an effort to prevent similar issues from occurring again.
Make a computer that is moderately efficient.
The backers of Web3 love to talk about how computers can be programmed to do anything they want, even if it's not your idea. The first of these computers to get traction was etht, but it was quickly overwhelmed by traffic. Fees to use the computer and complete a single transaction on the Ethereum network can run over $100. Imagine spending $75 to create a free Facebook account and another $75 every time you want to post something, and you have a sense of what it would be like to participate in a social network on the block chain today.
The goal of the transformation is to make it more efficient and less expensive. In the meantime, technologists often announce that they have built a more efficient blockchain. Solana raised $314 million last year to build what it calls the fastest blockchain in the world.
With that in mind, let's check in on how the fastest blockchain in the world was doing on Sunday, when the crash of thecryptocurrencies led many people to use it to buy and sell assets. Frank Chaparro is at The Block.
As the price of cryptocurrencies across the board slid during Friday’s trading session, traders large and small found themselves unable to execute transactions on Solana’s blockchain — a protocol that has been touted by proponents for its scalability and fast transaction speeds. Transactions per second (tps) were down significantly.
Those issues spilled into Saturday. Meanwhile Solana’s official status Twitter account noted that the blockchain has been “experiencing high levels of network congestion” tied to “excessive duplicate transactions.”
Solana is the world's fastest blockchain until a lot of people want to use it at the same time, which is to say badly.
I don't know, maybe this is just a Moore's Law thing, and in the future, our quantum computers will easily verify new entries to the ledger for small fractions of a cent. Web3 can be wasteful and slow if it wants to be broadly accessible.
Nobody seems to be close to cracking the code.
There are technologies that can be used to mitigate harassment and abuse.
Keeping people safe on platforms rests on a number of assumptions that we take for granted: that our posts are mostly private; that offending materials can be removed; and that bad actors can be prevented from evading bans by keeping record of phone numbers, IP addresses, and other.
None of that is true on the platform. Creating a new wallet is as simple as regaining access to a platform. One of the points that landed the hardest with me was the idea that corporations or governments could use blockchain transactions to discriminate.
Software engineer Molly White wrote an excellent post about potentialBlockchain abuses. She writes in part.
People who keep their cryptocurrency wallet addresses private often do so with good reason: there is very little privacy available once your crypto wallet address is known, because every transaction is publicly visible, and attempts to obscure them often easily unobscured with chain analysis tools. Imagine if, when you Venmo-ed your Tinder date for your half of the meal, they could now see every other transaction you’d ever made—and not just on Venmo, but the ones you made with your credit card, bank transfer, or other apps, and with no option to set the visibility of the transfer to “private”. The split checks with all of your previous Tinder dates? That monthly transfer to your therapist? The debts you’re paying off (or not), the charities to which you’re donating (or not), the amount you’re putting in a retirement account (or not)? The location of that corner store right by your apartment where you so frequently go to grab a pint of ice cream at 10pm?
Not only would this all be visible to that one-off Tinder date, but also to your ex-partners, your estranged family members, your prospective employers. An abusive partner could trivially see you siphoning funds to an account they can’t control as you prepare to leave them. As for the marketing machines and predictive algorithms that currently suck in every scrap of data they can to determine what ads to show you, or evaluate your suitability for a mortgage, or try to predict if you’ll commit a crime? Well, they’ve just hit the jackpot.
I asked who might be working on these issues, but have yet to hear back. It is hard to imagine a bigger hurdle to the mass adoption of the technology than the lack of trust and safety features.
It is likely that the issues above will be solved by centralized platforms that build those costs into their business models. Web3 will look like the Web 2.0 do-over at that point.
I keep an open mind about it because of the enormous amount of talent and money that is working on it. I find relentless negativity soul-crushing and tedious. I think it could be a half-decade or more before the industry gets a handle on the problems here.
The time to start is now. The rapid growth of Web3 is bringing more savvy critics into the space, and their views can't be dismissed as sour grapes from those who don't like them. The answers to many basic questions are proving to be elusive, despite the fact that the technologies can no longer be said to be new.
By the end of this year, we hope Web3 has more to show for itself.
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