In late 2021, the term Web3 began to increasingly appear in mainstream media outlets. This does not refer, however, to a sudden increase in interest in the Semantic Web as defined by Tim Berners-Lee, but rather to something entirely different. Enthusiasts of cryptocurrencies and nonfungible tokens (NFTs) seized this term and changed its meaning to reflect a supposed new stage of the Web, running on top of blockchains and having decentralization as its core value.

To summarize the narrative being spun, the first generation of the Web afforded independence to the owners of websites, but this did not extend to the average user; Web 2.0 brought with it the ability for users to generate content, at the expense of the centralization of services on a few platforms; Web3 would marry both freedom and user participation, cutting large technology companies out of the loop and giving decision-making power and ownership rights to users.

How this would take place is unclear, although distributed apps (dapps) running on top of different blockchains seem to be the main proposed avenue. It is important to note that most conversations taking place at the moment are being carried out around abstract ideas and vague premises, so by elimination, these applications are the most tangible resource available for research.

Dapps can be coded in any language at the frontend level, but their key difference is that at the backend level, they operate in a peer-to-peer fashion by leveraging blockchains, most popularly that of Ethereum. A look at tracker DappRadar’s rankings shows where interest currently lies: NFT-fueled games based around virtual collectibles, casinos and gambling platforms, and decentralized finance platforms (DeFi).

DeFi combines features normally associated with banks and stock exchanges but without government oversight. Users can trade, loan, borrow, and bet on the performance of assets, all while avoiding checks concerning the origin of the currency being employed. Crimes involving DeFi have soared in 2021, both as a result of vulnerabilities exploited by third parties and pump-and-dump schemes carried out by platform developers themselves. Speaking to TechCrunch, blockchain enthusiast and evangelist Lior Messika had the following to say:

“On the application layer, I believe that we’ve only begun to scratch the surface of interoperable value systems within the broader web3 space. Through decentralized finance, we will one day price, value and monetize every single form of capital that can be linked to us on-chain. Our favorite art pieces will pay off our mortgage on lending protocols, and our ‘likes’ will become financial assets. In simple terms, decentralized finance will kick-start the great monetization of everything.”

A different type of dapp that actually appears to align in some way with the promises of Web3 user independence is that of decentralized social media platforms. A few such projects are already in operation, enabling small pockets of users to carry out censorship-free interactions. These interactions are also theoretically permanent, given the nature of blockchains. It is as if current social media applications did not have a delete button or a moderation staff.

The implications of the adoption of social networks running under such a model should be quite clear. The Internet community’s struggles with questions of abuse, exploitation, cybercriminals and so on have only increased over the years, and these challenges are faced within the context of a network of known and well-defined actors, which at the DNS level are bound by contracts to ICANN, and at the human level are people and entities that operate within a given national jurisdiction that is often traceable. Adding the anonymity currently afforded by darknets with the permanence of a blockchain would likely deepen these problems.

More generally, the inefficiency of turning the Web into a huge peer-to-peer operation seems to elude the enthusiasts of Web3. At the insignificant scale that the crypto market currently exists, it already causes well-documented impacts to the environment due to its energy-intensive operation. It also has explicit costs that are necessary for its operations to be carried out. Aficionados defend that, in time, optimizations will lower both of these costs enough for the benefits to be greater than the price.

The issue with that idea is that blockchains are inherently inefficient; this is part of their basic premise. The operation of the so-called Web3 is by definition more expensive, slower, and resource-intensive than the current approach, regardless of how many improvements are made to its architecture. Its development is also not being carried out within any of the current major standards bodies, nor are there significant new ones emerging to perform that work. Development efforts are ad-hoc, competitive, and don’t seem to point towards the promised interoperability of this paradigm.

Fundamentally, there is nothing of value to the average user being offered by the Web3 proposal that cannot be achieved within the current model by exerting pressure over dominant companies, with: reasonable changes to the terms of use of major platforms; a decrease in dependency in the saturated advertisement-based profit model; the implementation of data portability; serious enforcement of privacy laws. There is no need to turn the Internet into an unaccountable mess to make it better.

At the end of the day, Web3 is just a reflection of a time in which a select elite has amassed more capital than it knows what to do with and are now pursuing ways to increase their already endless supply of resources without actually needing to generate real value for society, such as jobs and goods. This is not only observable in this particular market, as attempts to turn non-scarce resources into scarce ones and create bubbles are intensifying at a rapid pace in all sorts of sectors.

However, it is particularly egregious in this case, as a Ponzi scheme is being sold as some sort of digital emancipation backed up by venture capital, obliterating the Web in the process as collateral damage in the worst-case scenario. The promise is: “you can own part of something great, finally.” It is the promise that you can own an imaginary, theoretical part of a Van Gogh painting that you will never have access to and gamble it away in a glamourized virtual casino and ultimately make that network’s owners richer. The future has indeed arrived.