Web3 was never about decentralization and stopping big tech and VCs from controlling you, it is all about stopping governments from controlling them.
I am usually on the sane spectrum regarding conspiracy theories — I believe people actually went to the moon, that there are no Gates’ chips in vaccines, that chemtrails are just aircraft’s contrails, and that Zuckenberg is really a lizard…you know, all the usual, normal stuff. Yet, every one of us is crazy in a different kind of crazy ways and I have my favorite theory on Web 3 — why there is a push to it and why exactly now. Maybe it is not that wild, let me try to present it briefly to you dear reader and, depending how convincing I am, see if you can agree with me.
Let’s start from the basics. Every private company today (IT companies that we are focusing here included) has one primary goal — bring and increase profit to its shareholders. Everything else is secondary. Period. I guess we can all agree on that. Now, there are couple of ways to increase that profit — one is creating better products (or offering better service), another is inventing something new/complex enough that is not easy to replicate, or lastly try to lower costs of production. I don’t believe that free markets of today are working. I think lot of monopolies and monopsonies are stiffing competition and there is no urgent need for companies to produce better products/services (to be fair, most products today in IT are not created in best interest of consumers, as anyone who buys new TV with ads, worse Android devices, non-innovative iPhones, Windows OSes with built-in telemetry, worse and worse YouTube experience can tell). Regarding inventing something new… well, I guess it is just not in DNA of today’s service
companies platforms whose sole existence is based on repackaging already invented stuff. Especially if you don’t invest in R&D, but spend money to buy back shares. Frankly, most innovation (real, true innovations!) in 20th century came from either tax-payers’ money, such as all all the tech invented by NASA, or internet and GPS invented in USA DoD, or WWW invented in CERN, most vaccines by NIH, Human Genome Project, list is really long…. Or from time when companies actually thought long-term, invested a lot in R&D and had actual fucking Nobel laureates (Bell labs invented some minor and trivial stuff you might have heard of, like transistor, solar cells, Unix, C, C++, quantum computing…). Even today, most “innovative” companies are just funded by government, like Tesla and SpaceX (Elon is really good at taking tax-payers money). All COVID-19 vaccines like BioNTech, Moderna, AstroZeneca are funded by government money (Sputnik V, Sinovac, Sinopharm, Cuban vaccines are by definition funded by government), so there might be a broader point here which will be left unspoken. And these are all really, really groundbreaking innovations, mind you, not your average “our website will disrupt world with <insert existing technology>” or “our algorithm will monetize you better” or Amazon’s 1-click patent to make you buy stuff faster. So, conclusion is, if you don’t need to be competitive, nor you need to be innovative, we are left with third way of making profit — squeezing and cutting costs.
One “wonderful” way how companies can cut costs is regulatory arbitrage. You basically find loopholes in a law, use different representations of it, exploit workers and try to wiggle your way through. By either trying to fly under the radar, or having good PR and if nothing else works — plain lobbying. And USA, where most profit is made and where most VCs are, with its backward and harmful laws for workers (but really good laws for investors) is especially ripe for these endeavors. Most companies in previous 10-20 years are making money this way. Just look at how AirBnB is making money. Or Uber (OK, OK, wrong example, they are so pathetic they cannot even make profit). Or if anyone still remember dumpster fire that was WeWork. Or all these delivery companies. They all have in common basic avoidance of any existing regulations around accommodation industry, taxi industry, renting industry and any worker’s right. We might argue if these regulation are indeed good or not, but we cannot argue that they break “spirit of the law”. Tax heavens and tax avoidance, another nice form of regulatory arbitrage in a way, never went out of fashion. You create company A in Ireland, you move all copyright rights to that company A, and any money that you earn in country X is suddenly same amount that company A charged to company in country X, so that that company have zero profit (and therefore zero taxes in country X) and company A just pay low or no taxes in Ireland or some other tax heaven. And look at every ad company out there selling you out with complex terms and services. Every.Single.Fucking.Loophole is taken advantage of — even small, seemingly insignificant stuff like when EU demands ability to opt-out of non-functional cookies and all companies go to great length to make sure it is as complex and disgusting as possible for you to decline them. So you just give up, develop “consent fatigue” (as it is called) and there goes your privacy. Regulatory arbitrage is name of the game in 21th century.
OK, but what is happening recently is that (democratic) governments around the world are catching up to abnormal speed that (autocratic) companies are moving. Big companies stole a lot of money in this vacuum and regulations are only now catching up. GDPR are among first, California’s CCPA was next. There was also Assembly Bill 5 that was later busted by Uber in Proposition 22 by enormous amount of money (most money ever seen on any ballot campaign in USA! That speaks for itself). But this was all zeitgeist, sign of times to come. We see South Korea fining Google in app market monopoly, Spain declaring delivery riders as employees, France fining 500 million euros from Google in antritrust case, Italy fines Amazon 1.3 billion dollars, and so on and so on. And we even see USA’s FTC and DoJ skittishly preparing some antitrust lawsuits against Google and Facebook. And those are not anymore toothless fines that simple lobbying here and there can solve, those fines are getting bigger and bigger (cynically, but maybe at some point they will actually be equal to cost of running business this way). Governments around the world are making sure they are not getting screwed anymore. So, how can one decent company be able to profit in a world where no pesky government can tell you what you can and cannot do? How decent, upstanding companies (as they all are) can be arbiters of moral truths (as they surely know best) without letting people in specific country or their workers to meddle and interfere to their road to profit?
Welcome to Web3 world! To be fair, Web3 is not new. Terminology, first appeared around 7 years ago is certainly well-known all these years as a potential technology in decentralized space. But VCs didn’t really had a need to stop milking that cow of regulatory arbitration. However, today is different situation than it was 10 years ago. When VCs see where the world is shifting to, very wise bet would be to invest in Web3, as this seem like the only way to continue
stealing operating in same fashion. Don’t get me wrong, I was in crypto space before Web3.js existed (actually around that precise time, 7 years ago). I can guarantee you that this growth of interest in “Web3” is not organic. It is being driven and shilled by big capital, huge money, and VCs that are at the forefront of it. Namely a16z. That same people that brought you Facebook, Twitter, AirBnB, Lyft (either sit on the board, have shares or invested in those companies). Other VCs too, but they don’t have same amount of capital and influence. All VCs now need to defend large platforms we live on (FB, Google, Amazon…) that span across globe and are being threatened by all governments and might die a death by thousand cuts. And with all tightening of government regulations, they are on lookout for “safe” space to continue making those hefty profit margins in lawless system. I don’t understand if anyone don’t see perfect hypocrisy when a16z is founding and sitting on the board of big tech today and, at the same time shilling for decentralization where Web3 is solution to escape big tech behemoths? This is why I think that Web3 was never about decentralization and stopping big tech and VCs from controlling you, it was always about stopping governments controlling them. Otherwise, if they really believe in ideology, they would quit from these companies as board members? Or push for different democratic Web3, where there is no obstacles of money to participate in it (maybe with crypto, but one without monetary value). Don’t be naive, don’t drink their propaganda, we should not allow them this, not this time (we screwed up with Web2.0, to be fair). It is really easy. Just don’t buy into get-rich quick schemes and don’t buy into fake premises of “decentralization”. I tried to explain here why I believe Web3 is not a solution and that it will lead to even more concentration of power, so if you liked this text, check that one out.
Is it that wild of a theory?
Update: seems that Jack have same opinion as me, he just tweeted that 2 days after me. Fools seldom differ, I guess:)