Web 3: the way of the Dodo

Web 3.0 is going to go the way of the Dodo if governments don't start moving in to rein in the excesses and exuberance of the current state of free-for-all.

These changes will not be the result of enabling draconian regulation but will come naturally as the result of incumbents in the crypto space working together with business and academia. This will be the only way forward, out of the mess we are in now.

A national strategy that considers cyberwarfare and information as components of a future defense policy will not hesitate to come up with its own cryptocurrency (maybe by acquiring an existing technology) and with the uses cases required to make it safe and useful for its citizens.

These changes will be introduced around the world in the coming year, whether we like it or not.

It will be the central banks and monetary authorities of financially successful countries the saviors of cryptocurrency. Not your scandalous billionaire crypto bro with delusions of grandeur.

Since private entities have failed to bring cryptocurrency out of the bandwagon of fear, uncertainty and doubt, their place in Web 3 must be taken over by governments and academics.

Now it's time to introduce sensible public monetary policy and stop trying to fit a round peg in a square hole.

The adults must build Web 3

Web 3 is in a limbo of fraud-rinse-repeat and perilously close to failure. The technology is sound and the processes and workflows are becoming accepted; but the behaviour of the people in charge of this revolution is more akin to the railroad robber barons of the XIX century than to the paladins of freedom, liberties and decentralisation that these people claim to be.

Cryptocurrency, an integral part of Web 3, has become a buzzword of speculation, frenzy, media excess and deceit. There is no example of Web 3 being a working solution - it has become a problem waiting for a solution. At the moment, participating in Web 3 includes being exposed to perils, hacks, fraud, rugpulls and every sort of deceitful interaction that you could think of.

A Nigerian prince would be proud of Web 3.

Real world problems revolve around tangible outcomes: workload deadlines, plans and forecasts, beta testing, UX design, writing, minding children, boiling ramen, booking holidays, or getting to the dentist on time.

None of these tasks can be solved at the moment by using Web 3. Using cryptocurrencies entails the risk of incurring in the wrath of governments, organised crime, or fraudsters and kombinators.

Web 3 has become a mirage: In December 2022, I can speculate with crypto. I can lose my crypto keys or have them stolen from me. I can gamble with crypto. I can get hacked by someone who wants to steal my crypto. The decentralised crypto exchange can go bankrupt without warning. But I cannot buy an avocado, or pay for a bus ride.

We have to face the reality: There is no Web 3 economy. What we have is a hellscape.

The problem is that someone, somewhere will be treating the future of crypto currencies as a lucrative operation scantily disguised as a revolutionary pipedream. All in the name of libertarianism, decentralisation and private entrepreneurship, but with the lingering smell of corruption and decay.

The way out of the current farce is for governments around the world to enable monetary policies for crypto currencies by adopting the technology themselves - in other words, taking the technologies out of the hands of the robber barons and into the real world. The adults must build Web 3.

Nothing like good old taxes

To restore legitimacy to Web 3, the barons of cryptocurrency will have to pledge allegiance and fealty to the rule, or be taken out of the markets and shunned by society. And this must be achieved by taxing cryptocurrency transactions and providers of Web 3 services in the form of a tax on energy consumption.

Countries are subsiding the tech industry at large by allowing it to use a disproportionate amount of energy for private wealth generation.

20% of the yearly electricity generation capacity is used in data centres that are at the heart of tech companies. But these companies are reticent to pay up their debts back to society.

To impose a tax on energy is not a new concept and it's time that people realise that we have to pay for the things we love; be it a laptop, a mobile phone, a dress or a stack of crypto currency.

Governments can easily implement a progressive tax on energy consumption with the existing technological and societal structures. National governments have implemented greater social changes through strategies in the past: the New Deal of F.D.R. and the Chinese Economic boom of Deng Xiaoping come to mind, and there is no real barrier impeding them to introduce changes to bring the Web 3 revolution to a reality.

Bring power to the people

The problem we have at the end of 2022 is that crypto has been hijacked by snake charmers and travelling carnivals. It risks getting killed by fraud and deception.

The benefits of a truly open Web 3 economy are staggering: from a fair taxation regime where every transaction is accounted for; to the provision and distribution of welfare to those citizens who need support from the state. Everyone could be equally accountable, and nobody would be the victim of greed and deceit.

Revitalising crypto by adopting it is the surest way I can think of bringing power back to the people. A government running on crypto could do things that are beyond the scope of current economic management: taxation would be universal, access to public services would be simplified, welfare payments would be streamlined and social contracts would be honoured quickly. Black markets would dissapear. Banks would be curtailed and national monetary policies would be strengthened. Fraud could be monitored and stamped out.

And if a nation becomes guarantor of the value of crypto currency, then I could buy an avocado with my QR-code friendly mobile wallet. The government would become a "central liquidity pool" for transactions within its borders -and price volatility would be tied to the fiscal policy of the nation, rather than to the whimsical follies of crypto-bros. In a sense, governments would become central banks for their own cryptocurrencies, much like they do with fiat currencies.

And this is where our problems begin: we cannot really trust governments. They have no trust for us.

{ more on the next episode }