I thought web3 was supposed to be some kind of decentralized compute, where rather than run on your own hardware or IaaS/PaaS you could make use of compute resources that vary wildly day-to-day in availability, performance, and cost, because they were somehow also mining rigs or something? But it's "decentralized" because there's not one entity running the thing.
There is not a mention of that in the article.
Is it actually supposed to just be microtranscations paid with cryptocurrency? Where's the "decentralized" part of that?
Anyway, instead the best I can see this article seems to be talking about how it turns out people aren't using blockchain for buying things, and makes the (apparently) shocking conclusion "the one thing people always wanted: money that just works."
aurareturn · 10h ago
I thought web3 was supposed to be some kind of decentralized compute, where rather than run on your own hardware or IaaS/PaaS you could make use of compute resources that vary wildly day-to-day in availability, performance, and cost, because they were somehow also mining rigs or something? But it's "decentralized" because there's not one entity running the thing.
Web3 is a rebrand of crypto scams. The 20018 crash exposed the crypto industry to how wide spread its scams were. So the industry rebranded to "web3". Nothing changed.
The scam message was that so many people got rich investing in web2.0 companies like Facebook. You can get rich too by investing in web3 (shitcoins & NFTs).
zerkten · 10h ago
Web 3.0 was a synonym for the Semantic Web (https://en.wikipedia.org/wiki/Semantic_Web), but the term was taken over by crypto folks as it dropped off after the mid-2000s.
aurareturn · 9h ago
Side note: LLMs made semantic web completely irrelevant.
jowea · 10h ago
Web3 was quite a cryptoassets sector buzzword, but the decentralized part of that is "cryptocurrency".
If we take the buzzword seriously, yes there was more to it than microtransactions with cryptocurrency, but without personal wallets on the blockchain capable of those transactions the rest of the ideas like NFT tickets, Decentralized Finance etc are impossible.
mxwsn · 10h ago
Stablecoins transferred $27 trillion in 2024 - more than Visa and Mastercard combined. This is right in the article.
Stablecoins operate using decentralized ledgers on e.g. Ethereum which use decentralized compute. This isn't mentioned explicitly because the target audience knows this already.
aurareturn · 10h ago
Stablecoins transferred $27 trillion in 2024 - more than Visa and Mastercard combined. This is right in the article.
Vast majority is from one exchange wallet to another. Left hand to right hand.
TheDong · 9h ago
That comparison isn't really equal.
Visa / Mastercard have such large fees that they're mainly used for commercial payments like a coffee or couch.
If most of the Stablecoin transactions were for buying a coffee, I think it'd be fair, but the vast majority of stablecoin transactions are for shuffling money around, i.e. to buy and speculate on bitcoin, or to move money to an exchange to liquidate some crypto into cash.
I think the current use of stablecoin transfers is closer to a wire transfer.
SWIFT apparently deals with about $1.25 quadrillion/year, so ~50x the claimed amount for stablecoins in the article... though there's more than just SWIFT out there too.
idk, I don't really have a point, I'm both amazed stablecoins are such a big number, but also feel like the comparison the article's making with VISA is misleading for how they're currently used.
oersted · 10h ago
Aren’t stablecoins also backed by a central authority that guarantees it will always exchange the coins for a fixed amount of cash? That’s what makes them stable right? At least the major ones like Tether.
And by now we have seen many cases of stablecoins predictably crashing when trust in that backing authority dissolves. Most famously UST/Luna but it’s a long list.
I suppose they are useful for covert transfers, and the actual transfer mechanism is decentralized. But they are strictly worse than normal currencies for storing wealth, since the backing authority is a private company with virtually no oversight. And the utility for transactions would vanish if you were not confident that you can exchange it back and forth with cash immediately before and after the transfer.
solumos · 10h ago
Not exactly. Internet Computer or Akash Network would be more closely aligned with "decentralized compute" — smart contracts in the EVM world aren't really meant to decentralize "general" compute, but they do provide primitives for programmable transactions. Those transactions can include a "token" as well as abstractions on top of tokens (e.g. a vault)
pests · 9h ago
To give you a real answer instead of just bashing crypto:
There is no real compute happening on the actual blockchain. The more instructions you have to execute, the higher the gas, the larger the fee the user will have to pay. The blockchain is used more as a database which the Web3 app can then query (for free) and use as a source of truth. It's not just currencies and microtransactions - game stats, property ownership, a users notes or todo list, anything you want. But you are definitely not doing any kind of major compute.
Web3 now refers to web apps that interact with a blockchain instead of a server API. They are mostly built with modern web technologies (React, Vue, etc.) Many are opensource and lots of communities participate in developing standards and in participating bodies. Uniswap, for example, is a website and underlying protocol for changing one coin into another, is now on v3 (UniswapV3) and many other projects and companies (SushiSwap, PancakeSwap, etc) take this frontend and the blockchain contracts to implement their own compatible offerings.
These API call's go through your wallet (usually a browser extension or app) which injects the JS needed into the website or handles it itself. The wallet will usually perform an RPC to a remote server to perform the actual blockchain communication. Most chains have default free RPC servers but you can also pay for a more premium/less latency/higher uptime RPC services. You can also run your own RPC infrastructure and handle that yourself.
User identities are tied to wallets. You do not have to sign up or join any Web3 app, you just "Connect" your wallet which is a free action which basically consists of signing a pre-generated message vouching you are joining which the Web3 app can verify.
Many standards have developed like Uniswap mentioned earlier. Interfaces for NFT's, delegated spending (to condense transactions and save gas fees), notifications, chat. Because all contracts are on a chain and every frontend is just a webapp, and many services ensure transparency by posting the source code for their contracts, it enables seamless integration of other APIs.
For example, another layer has been abstracted on top of UniswapV3. Since there is hundreds of swaps all supporting UniswapV3, you then had the development of apps called "routers" which would check all the swap sites and find you the cheapest rate. These routers can even swap between multiple token chains and assets to arrive at your end coins.
One more way this is more decentralized. If any of these web frontend's were to go away, the contract still exists and you can manually call it's functions to achieve your goal like withdrawing money, reassigning an NFT, or evolving your pet.
Furthermore, since all Web3 apps are just really calling contract's behind the scenes, it's easy to just send these actions yourself in a program. You can turn 20 clicks in some UI into a script that does the same interfacing with the blockchain directly.
One last point, but all this data is being stored on chain and is exportable and backed up forever by millions. I have personally had trouble with losing devices and having poor backup discipline. So, I have stored my personal notes and todo list in a custom (encrypted) contract I wrote a few years ago. I can lose access to every device or password I know and can still access it anywhere in the world because I have memorized my 12 word wallet mnemonic and every node has a copy.
__MatrixMan__ · 10h ago
This article is here to tell us that stablecoins give us what we wanted all along: a faster, more convenient, and more secure value transfer experience.
Those things are nice I guess, but if you had asked me in 2021 what people wanted out of Web3, I'd not have listed those things. We wanted an economy based in types of value which better align with our values than fiat does.
Stablecoins are just a fresh coat of paint on the same problem as before: Money that is issued by a select few in furtherance of schemes that will make that few richer, with no reason to expect that those schemes will benefit the masses--masses who are expected to value that money just because we're told to.
nine_k · 10h ago
People prefer widely accepted tokens of value, which are the few strongest currencies (USD, EUR, RMB, JPY, CHF, not much more). BTC has made enough inroads to be considered semi-widely accepted, and be useful as is in certain circumstances, but that's about it.
Blockchain is a useful technology, but, it appears, mostly not for carrying fancy coins.
__MatrixMan__ · 8h ago
The anthropological evidence suggests that people prefer densely connected networks of interpersonal debt to any kind of tokenization.
Those widely accepted tokens of value are the result of somebody violently imposing that widespread acceptance, usually because they won a war and now they want to continue bossing the losers around without having to remain combat-ready all the time. The only people who benefit from using widely accepted tokens of value are those who have a hand in issuing them. To the rest of us they represent a disadvantage.
For a long time this was a stable configuration because densely connected networks of interpersonal debt become computationally burdensome to work with at the scale of the empires created by those wars. But if our money can be programmable, then maybe a new way can be found which better respects the needs of all of its users, rather than just the few at the top. I don't know what such a thing would look like, but it would look nothing like a stablecoin.
Incipient · 6h ago
>Those widely accepted tokens of value are the result of somebody violently imposing that widespread acceptance,
I get the poke at the US there, but I have to refute this bit. The EU is probably the main example of acceptance through ubiquitousness. Rmb through aggressive economic policy, the yen through (traditionally) stability.
The usd would arguably be through technological superiority at the advent of global financial markets, and their companies offering global services to facilitate trade (via usd).
We'll probably see the rmb replace that gradually/rapidly, again not through violence.
__MatrixMan__ · 38m ago
I'm not proposing that fiat currencies overtake each other through violence. If you're accustomed to some bully overriding your notion of "value" to align with their agenda, then you likely don't lose much by swapping them out for a different bully. I mean, some bullies are better or worse stewards of a currency than others, but you're still living under a system designed to protect bullies.
I'm proposing that fiat currencies overtake their alternatives by violence, and I'm interested in those alternatives. So it was really a poke at the Roman empire. Or perhaps my history isn't quite right and its some other empire. Surely somewhere, somewhen, there was a people who would be presented with a token for exchange and who would accept or reject it based on the wisdom or skill or empathy shown by whatever group was involved in the creation of that token.
Choosing what to accept as money would be an expression of one's personal values: each transaction a sort of vote. Leaders would have an incentive to remain wise or skillful or empathetic, because their power comes from the people's willingness to trade in their tokens. Noticing that somebody else is using the same kind of money as you would be an indicator that you value the same outcomes as they do. If they have a lot of it, it would be evidence that their actions have been furthering your goals.
Fiat currency, as practiced today, forces us to act as though we all value the same things (which, in some sense we do: not being harmed by the bully, but that's hardly a useful policy objective). Crypto looked like a way out for a while. A place where we could opt in to good ideas by chosing to use tokens which were involved in carrying them out, a market where the desirability of the externalities determined the value of the abstraction.
I really want to see how far technology can amplify a consent-based system as opposed to a bullly-based one, so the collapse of Web3 into a casino feels like a tragedy. What we're doing isn't working, and yet we're apparently too afraid to explore alternatives.
XorNot · 10h ago
What exactly is blockchain useful for?
__MatrixMan__ · 10h ago
Being a single source of truth which changes only according to certain rules, and not at the whims of some administrator. In short: accounting.
It solves a lot of headaches compared to having each stakeholder maintain their own database and then do pairwise syncs in hopes of convergence.
dehrmann · 10h ago
Isn't an issue with Bitcoin that it's actually controlled by the miners, so they could collude to change some of the issuance rules?
__MatrixMan__ · 9h ago
I'd rephrase slightly:
Bitcoin's problem is that, since it's controlled by the miners, they're unlikely to change the issuance rules. Adequate security can be had at a far lower cost, but that's a change that would damage their investment in mining hardware, so the miners will never do it.
I hope one day we start valuing abstractions based on the desirability of their externalities. After such a shift, bitcoin will look pretty silly--who would want use waste-electricity-coin when they could instead use capture-carbon-coin or go-to-mars-coin? But it would seem that we're not there yet.
dehrmann · 9h ago
At what point do large AI players have enough GPUs to take over the blockchain?
__MatrixMan__ · 9h ago
That would be 51%. I'm not a big fan of bitcoin, so I haven't tried to forecast it in terms of years.
Asic miners outperform GPU's though, so it would have to be an awful large pile of GPU's.
wbl · 9h ago
If it solved these headaches why didn't it catch on?
__MatrixMan__ · 9h ago
I used to work for a company which later got bought by Fiserv (a large payments provider). I had these headaches re: transaction data. Wrote a lot of SQL to reconcile the pairwise sync problem. I tried to convince them that this is a problem for a blockchain, but I grew impatient and left.
So I'd say that it has caught on, just in a way that doesn't involve the users' preferences as much as I'd like. Because it's not like Fiserv is going to let their end users transact with any of the other assets on Solana. They'll wrap it in an interface that just calls it "$" and the user will be none the wiser.
tootie · 10h ago
Stablecoins also largely evade regulation and are widely exploited for criminal use and sanctions evasion.
since7 · 10h ago
The article brings some valid points. There's a lot to talk about in Web3 UX (as well as AI UX) and this is where the hatchet is buried.
Having said that, to me this article seems written with the help of ChatGPT. That is not bad per se but I feel it should be mentioned (eg. Venkatesh Rao's Sloptraptions)
Animats · 10h ago
Stablecoins can, when interest rates are reasonably above zero, support themselves with the interest on the money. That could potentially work. The industry tradition, however, is the promoters stealing the money.[1] Usually by investing it in something risky, with the intent of keeping the excess profits but dumping any losses on the stablecoin holder.
Trump has a stablecoin, "USD1". It's partly backed by Trump's memecoin, "TRUMP" Really.[2] What could possibly go wrong?[3]
I would be very surprised if any of USDC, PYUSD or USDG followed in that tradition given their attestations.
But you are certainly correct that there is no shortage of bad actors in this industry.
rasengan · 11h ago
There are things that people want and, yet, can’t know they want, until much later in their lives; often times, too late.
Not an endorsement for “web3,” which seems to be a sort of centralization of the decentralized technologies at this point in time, unfortunately.
solumos · 10h ago
There's an argument that the only truly decentralized money is Bitcoin. I don't necessarily disagree with that.
Centralization has its perks though. A lot of things are priced in dollars, and it's somewhat convenient to not have to worry about rampant speculation and boom/bust cycles affecting the medium of value transfer.
There may be a future where rather than a claim on fiat, there are tokens that provide a claim on some underlying stable-priced commodity or similar asset that isn't tied to a specific government. I think that would be a step in the right direction.
But yeah — "Web3" was a buzzword, and thinking that a peer-to-peer programmable payment network was the next version of the internet was a bit misguided.
kragen · 10h ago
Never mind that. Give Freenode back to the people you stole it from. Every day you hold onto it you are worsening the lives of tens of thousands of people.
snvzz · 5h ago
Next is Web5.
Disregard HTML, CSS, JS and other nonsense; Embrace RISC-V machine code.
geekodour · 11h ago
Absolutely not a crypto person but I've been following this team called noice.so, so far I think they've been doing the right thing in the space, pretty new and think they are operating at the right level of abstraction.
solumos · 10h ago
This is actually a good example of what I'm railing against.
Giving your users airdrops is almost always a perverse incentive, and trying to figure out how to onboard to Farcaster as "Step 1" in your product journey is extremely limiting.
I thought web3 was supposed to be some kind of decentralized compute, where rather than run on your own hardware or IaaS/PaaS you could make use of compute resources that vary wildly day-to-day in availability, performance, and cost, because they were somehow also mining rigs or something? But it's "decentralized" because there's not one entity running the thing.
There is not a mention of that in the article.
Is it actually supposed to just be microtranscations paid with cryptocurrency? Where's the "decentralized" part of that?
Anyway, instead the best I can see this article seems to be talking about how it turns out people aren't using blockchain for buying things, and makes the (apparently) shocking conclusion "the one thing people always wanted: money that just works."
The scam message was that so many people got rich investing in web2.0 companies like Facebook. You can get rich too by investing in web3 (shitcoins & NFTs).
If we take the buzzword seriously, yes there was more to it than microtransactions with cryptocurrency, but without personal wallets on the blockchain capable of those transactions the rest of the ideas like NFT tickets, Decentralized Finance etc are impossible.
Stablecoins operate using decentralized ledgers on e.g. Ethereum which use decentralized compute. This isn't mentioned explicitly because the target audience knows this already.
Visa / Mastercard have such large fees that they're mainly used for commercial payments like a coffee or couch.
If most of the Stablecoin transactions were for buying a coffee, I think it'd be fair, but the vast majority of stablecoin transactions are for shuffling money around, i.e. to buy and speculate on bitcoin, or to move money to an exchange to liquidate some crypto into cash.
I think the current use of stablecoin transfers is closer to a wire transfer.
SWIFT apparently deals with about $1.25 quadrillion/year, so ~50x the claimed amount for stablecoins in the article... though there's more than just SWIFT out there too.
idk, I don't really have a point, I'm both amazed stablecoins are such a big number, but also feel like the comparison the article's making with VISA is misleading for how they're currently used.
And by now we have seen many cases of stablecoins predictably crashing when trust in that backing authority dissolves. Most famously UST/Luna but it’s a long list.
I suppose they are useful for covert transfers, and the actual transfer mechanism is decentralized. But they are strictly worse than normal currencies for storing wealth, since the backing authority is a private company with virtually no oversight. And the utility for transactions would vanish if you were not confident that you can exchange it back and forth with cash immediately before and after the transfer.
There is no real compute happening on the actual blockchain. The more instructions you have to execute, the higher the gas, the larger the fee the user will have to pay. The blockchain is used more as a database which the Web3 app can then query (for free) and use as a source of truth. It's not just currencies and microtransactions - game stats, property ownership, a users notes or todo list, anything you want. But you are definitely not doing any kind of major compute.
Web3 now refers to web apps that interact with a blockchain instead of a server API. They are mostly built with modern web technologies (React, Vue, etc.) Many are opensource and lots of communities participate in developing standards and in participating bodies. Uniswap, for example, is a website and underlying protocol for changing one coin into another, is now on v3 (UniswapV3) and many other projects and companies (SushiSwap, PancakeSwap, etc) take this frontend and the blockchain contracts to implement their own compatible offerings.
These API call's go through your wallet (usually a browser extension or app) which injects the JS needed into the website or handles it itself. The wallet will usually perform an RPC to a remote server to perform the actual blockchain communication. Most chains have default free RPC servers but you can also pay for a more premium/less latency/higher uptime RPC services. You can also run your own RPC infrastructure and handle that yourself.
User identities are tied to wallets. You do not have to sign up or join any Web3 app, you just "Connect" your wallet which is a free action which basically consists of signing a pre-generated message vouching you are joining which the Web3 app can verify.
Many standards have developed like Uniswap mentioned earlier. Interfaces for NFT's, delegated spending (to condense transactions and save gas fees), notifications, chat. Because all contracts are on a chain and every frontend is just a webapp, and many services ensure transparency by posting the source code for their contracts, it enables seamless integration of other APIs.
For example, another layer has been abstracted on top of UniswapV3. Since there is hundreds of swaps all supporting UniswapV3, you then had the development of apps called "routers" which would check all the swap sites and find you the cheapest rate. These routers can even swap between multiple token chains and assets to arrive at your end coins.
One more way this is more decentralized. If any of these web frontend's were to go away, the contract still exists and you can manually call it's functions to achieve your goal like withdrawing money, reassigning an NFT, or evolving your pet.
Furthermore, since all Web3 apps are just really calling contract's behind the scenes, it's easy to just send these actions yourself in a program. You can turn 20 clicks in some UI into a script that does the same interfacing with the blockchain directly.
One last point, but all this data is being stored on chain and is exportable and backed up forever by millions. I have personally had trouble with losing devices and having poor backup discipline. So, I have stored my personal notes and todo list in a custom (encrypted) contract I wrote a few years ago. I can lose access to every device or password I know and can still access it anywhere in the world because I have memorized my 12 word wallet mnemonic and every node has a copy.
Those things are nice I guess, but if you had asked me in 2021 what people wanted out of Web3, I'd not have listed those things. We wanted an economy based in types of value which better align with our values than fiat does.
Stablecoins are just a fresh coat of paint on the same problem as before: Money that is issued by a select few in furtherance of schemes that will make that few richer, with no reason to expect that those schemes will benefit the masses--masses who are expected to value that money just because we're told to.
Blockchain is a useful technology, but, it appears, mostly not for carrying fancy coins.
Those widely accepted tokens of value are the result of somebody violently imposing that widespread acceptance, usually because they won a war and now they want to continue bossing the losers around without having to remain combat-ready all the time. The only people who benefit from using widely accepted tokens of value are those who have a hand in issuing them. To the rest of us they represent a disadvantage.
For a long time this was a stable configuration because densely connected networks of interpersonal debt become computationally burdensome to work with at the scale of the empires created by those wars. But if our money can be programmable, then maybe a new way can be found which better respects the needs of all of its users, rather than just the few at the top. I don't know what such a thing would look like, but it would look nothing like a stablecoin.
I get the poke at the US there, but I have to refute this bit. The EU is probably the main example of acceptance through ubiquitousness. Rmb through aggressive economic policy, the yen through (traditionally) stability.
The usd would arguably be through technological superiority at the advent of global financial markets, and their companies offering global services to facilitate trade (via usd).
We'll probably see the rmb replace that gradually/rapidly, again not through violence.
I'm proposing that fiat currencies overtake their alternatives by violence, and I'm interested in those alternatives. So it was really a poke at the Roman empire. Or perhaps my history isn't quite right and its some other empire. Surely somewhere, somewhen, there was a people who would be presented with a token for exchange and who would accept or reject it based on the wisdom or skill or empathy shown by whatever group was involved in the creation of that token.
Choosing what to accept as money would be an expression of one's personal values: each transaction a sort of vote. Leaders would have an incentive to remain wise or skillful or empathetic, because their power comes from the people's willingness to trade in their tokens. Noticing that somebody else is using the same kind of money as you would be an indicator that you value the same outcomes as they do. If they have a lot of it, it would be evidence that their actions have been furthering your goals.
Fiat currency, as practiced today, forces us to act as though we all value the same things (which, in some sense we do: not being harmed by the bully, but that's hardly a useful policy objective). Crypto looked like a way out for a while. A place where we could opt in to good ideas by chosing to use tokens which were involved in carrying them out, a market where the desirability of the externalities determined the value of the abstraction.
I really want to see how far technology can amplify a consent-based system as opposed to a bullly-based one, so the collapse of Web3 into a casino feels like a tragedy. What we're doing isn't working, and yet we're apparently too afraid to explore alternatives.
It solves a lot of headaches compared to having each stakeholder maintain their own database and then do pairwise syncs in hopes of convergence.
Bitcoin's problem is that, since it's controlled by the miners, they're unlikely to change the issuance rules. Adequate security can be had at a far lower cost, but that's a change that would damage their investment in mining hardware, so the miners will never do it.
I hope one day we start valuing abstractions based on the desirability of their externalities. After such a shift, bitcoin will look pretty silly--who would want use waste-electricity-coin when they could instead use capture-carbon-coin or go-to-mars-coin? But it would seem that we're not there yet.
Asic miners outperform GPU's though, so it would have to be an awful large pile of GPU's.
Just a few weeks ago Fiserv launched a stablecoin on Solana: https://investors.fiserv.com/newsroom/detail/2848/fiserv-lau... I doubt they listened to me, probably just came to the conclusion independently.
So I'd say that it has caught on, just in a way that doesn't involve the users' preferences as much as I'd like. Because it's not like Fiserv is going to let their end users transact with any of the other assets on Solana. They'll wrap it in an interface that just calls it "$" and the user will be none the wiser.
Having said that, to me this article seems written with the help of ChatGPT. That is not bad per se but I feel it should be mentioned (eg. Venkatesh Rao's Sloptraptions)
Trump has a stablecoin, "USD1". It's partly backed by Trump's memecoin, "TRUMP" Really.[2] What could possibly go wrong?[3]
[1] https://www.web3isgoinggreat.com/
[2] https://www.msn.com/en-us/money/companies/usd1-the-cryptocur...
[3] https://coinmarketcap.com/currencies/official-trump/
But you are certainly correct that there is no shortage of bad actors in this industry.
Not an endorsement for “web3,” which seems to be a sort of centralization of the decentralized technologies at this point in time, unfortunately.
Centralization has its perks though. A lot of things are priced in dollars, and it's somewhat convenient to not have to worry about rampant speculation and boom/bust cycles affecting the medium of value transfer.
There may be a future where rather than a claim on fiat, there are tokens that provide a claim on some underlying stable-priced commodity or similar asset that isn't tied to a specific government. I think that would be a step in the right direction.
But yeah — "Web3" was a buzzword, and thinking that a peer-to-peer programmable payment network was the next version of the internet was a bit misguided.
Disregard HTML, CSS, JS and other nonsense; Embrace RISC-V machine code.
Giving your users airdrops is almost always a perverse incentive, and trying to figure out how to onboard to Farcaster as "Step 1" in your product journey is extremely limiting.