Web3.0, the metaverse, NFTs and all of that jazz are a big disappointment. At least in the current moment.
And babe can I back this up?
This article is not meant to discuss anything related to the bear market, but just to offer a multi-angle overview of to what extent the achievements of the space live up to their promises. Let’s begin:
But first, what is a metaverse?
Since there is no universally accepted objective definition of the notion, I will define the open metaverse as follows: ambient real-time computing integrated for virtual 3D social spaces, in fully interactive, interconnected and interoperable ecosystems. A simple virtual space ≠ open metaverse, due to its primordial capabilities.
Consequently, my definition implies that there is no real metaverse without blockchain/some form of distributed ledger as base layer.
Why is this a key component?
Because without decentralisation you wouldn’t have an open metaverse, just a virtual centrally controlled enclave that users could be kicked out of at any time (similarly to getting de-platformed in Web2). Given that you cannot simply be kicked out into “unbeing” (unless you are killed), from our current reality, the same should apply for the metaverse.
What is Web 3.0?
Decentralised web enabling user sovereignty and self data ownership. At least wannabe.
Concept usually marketed and presented as a democratic (and legit) tech revolution to end Web 2 companies’ tyranny when taking advantage of our data, enabling “sovereign identities” and empowering each internet user to own their own thing.
Why are those 2 terms often brought together into discussions?
Because Metaverse without Web3 would naturally result in increased surveillance capitalism, corporations capitalising on even more personal data and having a digital alternate reality controlled on a whole new level by corporate players.
Now let’s get into the spicy part. What seems to be the effing problem?
Mainly, there are 3 big things:
- The technological constraints that prevent us (at the moment) to achieve the things they claim they are able to achieve are massively underestimated and even unknown to some participants in the ecosystem.
This enables self proclaimed “Web3” companies to get away with conventional Web 2 practices (cough, Celsius network, cough, OpenSea, cough we don’t name examples) and encourages reckless speculation.
2. A lot of the things that we currently call “metaverse” are just glamorised games and far from being entirely user owned & controlled (if at all)
3. The capital flow currently fuelling the Web3 + Metaverse + crypto + NFTs is arguably centralised around wealthy and privileged actors (raises the question of representation and inclusivity)
Now let’s break those down.
Technological point
Web3.0 implies the need of reconstructing from the ground up our heavily centralised cloud-based systems. And we are maybe millions of light years away from doing that. For example, Thales Europe reports that almost half (46%) of European enterprises’ data is stored on centralised cloud platforms, out of which approximately 40% of this data is considered sensitive (sic).
Out of the whole $180 billion cloud market of 2021, the largest market share of 33% belonged solely to Amazon Web Services (according to Synergy Research Group) and with the rise of permissioned distributed ledger cloud-based services (such as the likes of Oracle and IBM), this market is only going to grow.
*For permissioned distributed ledgers think of private “blockchains”
The backend magic of most of the apps and software services we use, normally happen on a centralised cloud service. Consequently, the data we currently produce through those apps is stored and processed in the same place.
Web3 “achievements” so far
Some of the closest functional solutions to cloud computing and storage we currently have, in terms of decentralisation are 0chain, Dfinity, Filecoin + IPFS duo (with massive drawbacks though such as speed), Storj DCS etc (some of those are just distributed ledgers not blockchains, which means that data is mutable). And while arguably there is plenty of potential in this space, one can’t help but wonder to what extend is all of this really necessary? Does absolutely all data produced need to be censorship resistant or impossible to remove?
Those being said, from a tech perspective there is no infrastructural division between Web1.0, 2.0 and 3.0, as noticeably one concept blends into another. When visiting Web 3.0 companies’ websites, users can still notice the cookie consent box for data collection (which technically makes sense, but philosophically not so much).
When it comes to metaverse products, some of the games we currently call as such are relying as well on centralised cloud platforms. And I'd go as far as to say that even a couple of the apps that are clearly marketed as decentralised still have major centralisation ingredients (eg. platforms of consecrated metaverse games hosted on centralised DNS providers).
Technically the way dApps should be done is: rely extensively on smart contracts to create the back-end algorithms and on the blockchain in itself to store app data. Front-end layer should be stored at least on p2p networks as well. Besides the technical requirements, a social self governance mechanism should be established, for the app users.
DAOs come particularly handy in such context, as members collectively participate in decision — making, taking the whole ecosystem out of a few developers hands, so to speak. If the initial game developers do not wish to continue working on the app, the community can step up to the task, if they wish so.
However, lots of metaverses lack those features, making them more alike to centralised communities integrated with a blockchain component, so that they could tokenize certain non-fungible game assets and allow users to trade those NFTs (ownership titles) as in the real world.
NFTs in an open metaverse context
One aspect that is often overlooked here is that the ownership title is the thing stored on a blockchain, not the asset in itself. The NFT is just the “document” stating what you own, which is linked to the actual digital thingie.
For example, ERC-721 is a universal Ethereum standard used for non-fungible tokens across many apps that use this blockchain. NFTs can be traded across this blockchain. The digital assets themselves, not.
Even if blockchain does not solve anything particularly here, interoperability of assets was never really a technological issue to begin with. But the transferability of value outside its own game ecosystem is, and it comes with legal problems for NFTs. That’s because:
- the same terms and conditions of the sale contract do not apply for the outside ecosystem and
- those conditions are not automatically transferable onto the secondary buyer either. This technically means that the seller is not legally required to provide any promised utility (if any) for secondary NFT buyers. If you buy an NFT with no terms and conditions stipulated in a sales contract, legally speaking your ownership title consists of nothing. For the connoisseurs, this is how rug pulls happen.
Nonetheless, if only one aspect of your experience (e.g. game’s economy) is based on a trustless system, it does not mean that the whole environment is run and owned by its players / stakeholders. Having multiple isolated “metaverses” defeats its purpose as well, as it was intrinsically meant to be an interoperable, interconnected and real-time responsive digital space, inclusive of everyone.
And while we’re here, I’d like to clear this up: smart contracts are not legally enforceable agreements either, but just an automation tool to execute the said agreement.
And just to clear this other thing up as well, “metaverse generated IP” is simply not a thing because it does not matter where the IP is generated as it is subjected to the same laws. NFTs do not share intellectual property rights by default, or copyrights or anything else unless clearly specified in the sale contract, nor do they protect them. Those things are only protected through a legally binding agreement, making the concept of NFT in itself, quite useless.
Now turning back to our eggs, the conceptual value derived from blockchain based web should ultimately boil down to data encryption, storage, data ownership, transfers and retrieval, portability and so on. The big data “problem” within the Web3 space deserves its own article, which I hope will be out soon.
How it makes a difference for users
Lastly, there is the UX aspect to look into. From a user experience standpoint, Web 3 is no different than Web2.0 but with extra steps (connecting your wallet, signing “transactions” to perform actions etc). The front end side of the dApps need to get connected to one of the network nodes, to be able to access the relevant data. In practice, the way this happens is by users "manually asking" for the data by approving the said actions using their private key. Which even with built-in browser software like Metamask, this simply seem like a hassle most of the time.
This was also meant to enable self-sovereign identities, but the question still remains of how much of a user pain-point this is. As a society, we are moving away from owning to sharing and prefer simple solutions that help us save time. Needless to say that there is no such thing as account recovery, reversible transfers and so on on a blockchain, which begs the question of whether or not this technology should be mass adopted by just anyone.
On top of this, those extra steps add security issues along the way. Depending on each case, usually it is fairly easy to link a certain wallet address to an entity. This lack of anonymity enables ill intended parties to drop spam into those NFT wallets and even malware. This is a huge security problem that can result in pretty nasty stuff.
Capital movement stance
The Web3.0 + Metaverse is a social movement (run by elites for financial purposes) more than a technological construct and it becomes clearer to see day by day.
From promoting expensive tokens on exclusive whitelists, high gas fees (at certain times) that could even exceed a month’s rent for some families, Metaverse projects selling luxury penthouses and high-end brands opening up malls, this trend is ultimately pushed into the mainstream as a result of huge market cap speculation.
Bloomberg intel (as of December 2021) forecasted the metaverse market reaching a staggering $800 billion in revenue generation by 2024, compared to a much less optimistic figure of “only” $678.8 billion by 2030 predicted by Statista. VCs and Angels are currently driving much of the market movement (understandably so), but momentarily this has the effect of pushing out ordinary people from the equation.
Social stance
Should I mention here that even the metaverse dapps (eg. Cryptovoxels) which have the lowest tech requirements still exclude almost a half of the human population in terms of accessibility (only 62% has internet access)?
2022: the year when some lunatic groups on the planet discuss about fancy digital parallel realities and glamourised video games while others still do not have access to internet or a smartphone.
For a movement that claims to empower all people, Web 3.0 seems to be paradoxically centralised around privileged actors and the public that is financially well enough to afford to speculate on future value creation generated by something that doesn’t even exist yet.
The ultimate problem is that web3 is currently marketed as something that is not. At a closer look, we can easily conclude that most of this is merely wishful thinking presented as if it’s already here, delivering and making our lives better. And I cannot even be accused of being a hater at this point, as I’m simply paraphrasing some of your Web 3 influencer’s words:
“Many of the greatest opportunities will be those that we haven’t even envisioned yet (…)”
How do you know that something you haven’t even envision yet, is going to be great? Howwwww, sweet Jesus, how?!
I know that this thing that doesn’t exist in real life, not even in my imagination yet, is going to be the greatest breakthrough ever. An you should be FOMO. And throw your money in here. Because I’m a visionary badass Twitter influencer. And you should trust what I saaaayyyy and mindlessly comply with my orders.
