Web3 is centralized (and inefficient!)

Mar 22, 2022

These days, an app is “decentralized” if it uses the blockchain. As you probably already know, this is part of the so-called “Web3” which hopes to be the next version of the internet.

I’m not the first person to tell you this, and certainly not the last, but Web3 is in fact centralized, just as Web2 was. Web3 is just a worse version of Web2.

Web3 Platforms are Centralized

A lot of Web3 platforms are in fact centralized. Your wallet (MetaMask), marketplaces (OpenSea), APIs (Alchemy) are all central platforms. Sure, they use a distributed database (blockchain), but before that it’s still a Go app on AWS, meaning its centralized.

Look at email, while the protocol is technically “decentralized”, but look at how big Google Workspace and Microsoft 365 is. Sure, you can easily set up an email server on a $5 VPS, I do it with my domain, but most people just leave it to big providers. Web3 is no different.

Look at venture capital firm Andreessen Horowitz, they have a real incentive to push Web3 into centralized monopoly platforms, making it become what it was meant to “disrupt”.

VCs are built to build monopolies, and monopolies want central control. Something like Tor or Folding@Home is be somewhat decentralized, since it’s a nonprofit in control and neither Tor or Stanford are for-profit businesses. But most Web3 firms are for-profit businesses, and so are the VC firms backing them. They would rather have one big monopoly than a truly competitive market, and just change the monopoly operator every generation.

If you take the decentralized nature of I2P or DHT, combined with the distributed computing tech of modern Big Data solutions like Apache Spark*, you could get something far more efficient than blockchain. But if everyone if on the blockchain hype train, then the most credible answer to decentralization is the worst. It’s also sad to see my dad hyping up Web3 in his LinkedIn.

And it’s not like these decentralized platforms will go run their own servers in a colocation center, they still want to use AWS. Meaning Web3 is as centralized if not more so than Web2 ever was. You can easily run Nextcloud from your old PC instead of subscribing to Dropbox, but you can’t easily host a “dApp” on your MacBook instead of the public blockchain.

And if Web3 is “decentralized”, then why can OpenSea take away your NFTs?

Disclaimer: I work at Microsoft 365 in the Exchange umbrella. Despite that, I self-host my personal email on Postfix, Dovecot, and Roundcube. I am a Tor Core contributor and relay/exit operator, but less active than before.

* - I still hate Apache Spark with a passion. It makes systemd look great in comparison.

Mining is Centralized

Once upon a time, it was easy to mine Bitcoin. But Bitcoin took off, and it’s now absurdly hard to mine Bitcoin. You need farms of GPU mining just to get tiny amounts of bitcoin.

The design of blockchain, is that as more coins are mined, you need more computing power just to get smaller amounts of blockchain. That’s artificial scarcity. Just when we need to cut emissions more, we are burning through our planet just to make the top 0.1% richer while people in Indonesia lose their homes to more frequent tropical disasters.

And even if the environmental concerns were nonexistent, if it’s so hard to mine Bitcoin, it favors established miners over newcomers. Is that really what you call a “decentralized” platform?

Sure, you can mine Bitcoin yourself, but you’ll pay more than what you’ll get.

If I didn’t become a big FreeBSD person in the early 2010s, I would probably have been in crypto. I may have even worked in crypto. I in fact did have some fascination with Bitcoin and crypto back in the early 2010s, and I even had Bitcoin. But I loved FreeBSD too much that I was willing to not mine Bitcoin just to have a BSD desktop.

Sure, I would have been much richer if I chose Bitcoin instead of FreeBSD. But I probably would have become a worse person, not having had to work hard since I’d have 10 million dollars right now. And publicly advocating destroying our planet for making rich crypto bros even richer while making ordinary people are forced to leave their homes over more frequent hurricanes and tornadoes.

Yes, I am a FreeBSD “committer”, but if I went into crypto, maybe I would be as involved in Bitcoin’s source base, or Ethereum’s. But for me to go into crypto, the ship has sailed a long time ago. But I’m glad I didn’t go into crypto.

I did have an internship at a now-dead crypto startup CacheCash which hoped to create a decentralized crypto-based CDN. But they went bust as I accepted my Microsoft offer which brought me across the US. And CacheCash was inefficient as inefficient could be, like with many Blockchain-based apps. The Internet backbone is very fast now, but blockchain never will be.

Blockchain Sucks, Period

Expecting the financial and tech industry to run on blockchain is like expecting AT&T to run their backbone on a Amazon warehouse sized place full of 56k dial-up modems. Or wanting to run Google on a cluster of old Compaqs instead of a much smaller amount of modern servers.

Sure, you could get a 100+ Gigabit backbone (standard on the Internet nowadays) using 56k modems, but is it as efficient as using fiber optics? No, not at all. And one fiber optic transciever is a dot when compared to 200 million dial-up modems in size (not an exact count). Blockchain is no different.

One financial transaction shouldn’t need more energy than an average household uses in a month. Having excessive amounts of mining is wasteful. We don’t want to delay the transition away from fossil fuels, but we are just to make a few white rich crypto bros richer than ever before.

When Miami and Houston go underwater, a16z will be partly responsible. What a basic enterprise C# app could have done was instead done using a complex web of blockchain and environment-killing and supply chain-squeezing cryptocurrency mining.

Sure, Coinbase’s CEO will have a Manhattan penthouse in Billionaire’s Row while Miami and Houston are long-gone, they have been overtaken with sea level rise. And even if your home wasn’t overtaken by sea level rise, but you want to build a PC, it’s now unafforable to get a GPU without taking out a mortgate for one.

In the meanwhile, people keep getting scammed out of their crypto assets, making the 0.1% even richer with no recourse for anyone else, while you have to live in a homeless shelter since you lost everything, hackers took it all away.

Is this the future we want?

Decentralization Is Good, Just Not The Way We’re Doing It

Just what I said. Blockchain is not the way to decentralization. We need a hyper-efficient system that takes minimal computing resources to scale to a whole planet of users, while making it easy for newcomers to join the network.

It’s not hard to set up a Tor relay or Folding@Home, so it shouldn’t be hard to add a cryptocurrency miner or node either. But it is. Maybe we’re better off taking out the financial aspect, since not everything has a value.

My domain neelc.org costs $11/year to run, but the domain has more sentimental value to me than what I’d get if I sold it (assuming someone would buy it). Many things in life simply can’t be valued in dollars. After all, the Mona Lisa isn’t for sale.

Sure, I work at Microsoft 365, because I had to. It was join Microsoft, or be dependent on my dad for money. I was pretty much a 100% open source and self hosting person for very long, and I didn’t really want to work on Windows or .NET for a living, and developing on Windows is still a struggle for me, but I had to. I don’t want my dad to intefere with my life or question my choices.

But hey, working at Redmond beats taking Miami and Houston underwater just to make a few white crypto bros happy.