Is Crypto Winter Causing Death For Web3?

That’s the question for 21 million bitcoins: will the Web3 revolution ever happen? In an endless crypto winter, and at a time when the resounding bankruptcy of the cryptocurrency exchange platform FTX is shaking the ecosystem, we frame the debate with selected arguments and a throwback to the 2000s.

Do you know the “abyss of disappointment”? We are not talking about a kind of existential despair à la Chateaubriand, but about the fate reserved for all emerging technology, somewhere between a semi-depressive state and a useful return to reality. This seemingly inevitable fate would occur once it reaches the “peak of exaggerated expectations” – if Gartner’s famous noise curve is to be believed. And for its 2022 editionthe US consulting firm places Web3 not far from the breakout peak, while NFTs have already begun their slide towards the bottom of the hole.

A crypto winter that never ends

Is Web3 dead, even before it was born? Should we abandon this promise of a new web, a blockchain-powered revolution, a “new golden age of the Internet” freed from platform control, where everyone would be in control of their data , where power would be decentralized and value shared fairly? Is the crypto network too good to be true? It is true that apart from the media hysteria on the subject, 2022 has been marked by a crypto winter that never ends…

Since its all-time high in November 2021, the market for cryptocurrencies unscrewed by 70%. Its main currency Bitcoin has gone from $67,000 to $19,000 in less than a year. During the same period, the cryptocurrency market wiped more than two billion dollars in market capitalization. To whom do we owe this? bear market – as traders refer to an extended market decline of at least 20%, dragging investor sentiment in its wake? In the words, undoubtedly the geopolitical context, but also the increase in interest rates, decided by the central banks to try to control inflation. In September 2022, the FED (US central bank) raised the base rate for the fifth time this year, to set it at around 3.25%. An “increasingly expensive” money that favors safe havens, to the detriment of risky assets, including cryptocurrencies. And where we see at the same time that it is not enough to escape the regulation and control of the states to escape the economic situation and monetary policies.

of TECHNICAL who do they look like?

And if we compare this spectacular collision with the one experienced by another TECHNICAL ? It’s “back to the future” in 2YK and its dotcom bubble what are you doing Financial Times IN an article of July 2022. The exercise is attractive because the common points emphasize: the enthusiasm for a technology with revolutionary potential, called the Internet, which, among other things, would make it possible to escape the control of the political and economic establishment, to restore power to individuals online… Sound familiar? The similarity is also about the pace and magnitude of events: eight months after the peak of the Internet bubble that reached March 2000, listed technology companies had lost 60% of their value, or about $1.7 billion…

ABOUT crypto enthusiasts, is precisely the proof that a sustainable technological revolution can be hidden behind the speculative escape. It’s hard to argue that the internet has truly found its place in our lives (to the point where the question now is more about how it might find our lives in this ultra-connected society, but that’s another story). Then it would be enough for the actors of the crypto world to grit their teeth while waiting for the meltdown – or rather the “slope of clarification”, the one where applications emerge and a momentum is created, and the “plateau of productivity”, when the technology finally finds the market her, to start over the Gartner methodology.

Concrete applications are definitely what blockchain and its ecosystem lack the most. Martha Bennett, a principal analyst at Forrester specializing in blockchain and artificial intelligence, was in the 1990s chief technology officer for Prudential Insurance. IN Financial Times who questions it, considers it too early to say, but nevertheless notes that in 1995 the applications of the Internet were obvious: access to information, e-mail, etc. In October 2022, in an incriminating thread on Twitter, Daniel Glazman, a French programmer and former co-chair of the W3C CSS working group, recalled that “in 11 years, in the age of BTC, the Web had revolutionized humanity’s access to information and commerce . on 300 million major sites. »

good guys vs. bad people

web3, metaverse, decentralization, fungible, non-fungible or semi-fungible tokens (yes, that exists too). it really exists. While companies have long been interested in blockchains, no killer app has really emerged. According to Gartner, it will take between two and ten years for most blockchain innovations to come of age – the time needed to overcome technical and regulatory challenges. Some draw the analogy to cloud technologies, which took twenty years to deploy on a massive scale.

In their note, Gartner analysts call on market observers not to throw out the crypto baby with the bathwater and to distinguish the technologies from the more or less honest intentions of those who manipulate them, even specifying: “bad have always taken over and experimented with new technologies much earlier and faster than the good guys. It takes time for virtuous use cases to emerge and even longer for security and anti-fraud systems to be in place. »

“Hoaxes, Time Bombs and Stories”

But the camp of skeptics and antiweb3 is not convinced and is investing in social networks to say so. Researchers, developers, designers, academics… raise their voices to condemn what would be at best a useless fad, at worst a colossal fraud. In this way Stephen Diehla computer engineer, tweets all the bad things he thinks about the question to his 60,000 followers: “Web3 startups = scam companies + ticking time bombs,” “All play-to-win games are scams,” “There is no significant difference between Bitcoin and Dogecoin. They are both supposed speculative assets whose demand is created only by an art of storytelling”… Don’t throw it away.

Olivier Blazy, professor of computer security at Polytechnique, is interested in the computer security promised by Web3. Because, contrary to popular belief, being based on known tamper-resistant technology does not protect against security breaches: weak electronic signature verification is an example of this… Developer Molly White accurately documents on her blog “Web3 is doing very well” Web3 damage, from bugs to hacking, including embezzlement. As we write these lines, the counter on the home page shows more than $11 billion lost, stolen or defrauded in Web3 applications.

Libertarian Ideology

But ideological discourse also presents a problem for crypto-skeptics. Because of everything symbolizewe are closer to micro-ownership than the sharing economy as explained DNA Kevin Echraghi, from the Hérétique collective. This professor at Sciences Po sees in Web3 a new iteration of the American dream, which is embodied in the great financial success promised to those brave enough to conquer these new territories. Not far from the libertarian ideology, where the logic of the market applies everywhere, without state intervention, which inspires so many Silicon Valley experts, such as Elon Musk or Peter Thiel…

ABOUT Scott Galloway, Web3 is nothing more than a technological buzzword. The famous New York University marketing professor thinks it should be renamed “Web2.01”, indicating a concentration of power already in the hands of Web2 players. In the key issue of democratization, we can wonder about the consequences of the evolution of these “proofs”, which validate transactions on the blockchain: proof of stake, or proof of action – in which Ethereum has just changed its infrastructure via update Union – is certainly less energy intensive than proof of work, or work certificate , but it favors those who already own cryptos. For a decentralized internet, we would have known better.

Waiting for Web5?

ABOUT Tim O’Reilly, internet legend and coiner of the term web 2.0, “power will always find new ways to centralize itself. The entire history of the computer industry has been driven by radical openness, which led to massive innovation and later to its closure.” Jack Dorsey thinks Web3 is already dead. He also believes that “nobody owns Web3. It is owned by venture capitalists and limited partnerships. » What should be done then? Create Web5, gone. The founder of Twitter actually proposes the addition of Web2 and Web3, in a new project…

So is Web3 flawed by design (imperfect, flawed, by construction) or just technologically immature? At a time when the Delegate Minister for Digital Transition Jean-Noël Barrot asks support the NFT industry with public funds from France 2030 and the “acquisition of Web3 bricks to not be dependent on foreign powers”, the answer to this crucial question is not at all clear. As you remember Financial Times, the tools that form the foundations of our interconnected uses – Facebook and social networks, the mobile internet made possible by the creation of the iPhone, or the cloud with, among others, Amazon Web Services – finally emerged long after the explosion. internet bubble. But regardless of whether Web3 crystallizes or not, the pros and cons can come together at one point: so long Web2.0it’s time to help make this Internet of dreams come true, where everyone owns their own identity and data.

This article was taken from The 2023 Trend Book20 key sectors of the economy deciphered, 368 pages. Available for pre-order now.

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