A must-read blog post by Moxie Marlinspike, founder of Signal, sharing his thoughts on Web3.

The basic argument is that although Web3 concept is for decentralization of internet away from platforms, practically it has just reverted back to Web2 (centralized internet) with only superficial trappings of decentralization.

His points:
1) Blockchain and “crypto” (as it’s now commonly referred to meaning blockchain/cryptocurrency rather than the original meaning “cryptography” aka encryption) is discussed in terms of “distributed” and “trustless” and “leaderless”. One might think that this means that every USER involved is a peer in the chain. But practically it’s not about USERS, it’s about SERVERS. The distributed nature is based on SERVERS, not what Moxie calls “clients” (aka YOUR computer, YOUR phone, YOUR device). So the blockchain concept is supposed to follow distributed trustless and leaderless methods between SERVERS. The problem is that your phone is not a server. Your computer is not a server. Your devices are not servers. All of your devices are END-USER devices. Very few people will actually be setting up, running and maintaining their own server. It’s difficult, requires technical knowledge, and time consuming and costs money to maintain.

So what actually ends up happening is that the whole interface of Web3 turns to: Blockchain <-> Servers <-> End-user client devices. And the problem with Web3 so far is that all the end-user interaction with the blockchain has now consolidated to very few servers, aka returned to the phenomenon of platformisation (which describes how Web2 platforms decentralised their API throughout the entire web to centralise data back to their servers in the 2010s). As of now, most of the Web3 “decentralised apps” interact with the blockchain through two companies called Infura and Alchemy. These two companies run the servers in between blockchain and end-user client devices. So if you are using MetaMask and do something with your cryptocurrency wallet in MetaMask, MetaMask will basically communicate to Infura and Alchemy who then communicate with the actual blockchain.

His two sub-complaints to this are:
A) Nobody is verifying the authenticity of information that comes from Infura / Alchemy. There is currently no system in place on the client side (aka MetaMask on user side) to ensure that what information Infura / Alchemy returns to the end-user is actually what is truly on the blockchain. Theoretically if you have 5BTC in your wallet on the blockchain, and you load up MetaMask to query the balance in your wallet, MetaMask might contact Infura / Alchemy requesting your BTC balance and Infura / Alchemy can respond to say you have 0.1BTC. MetaMask won’t verify if that’s actually true, it’s just taken at its word.
B) Privacy concerns with routing all requests via Infura / Alchemy. Moxie’s example is: imagine every single web request you make is first routed through Google before being routed to your actual intended destination.

2) He gives the example of how NFTs are in fact just URLs stored on the blockchain. And these URLs point to servers hosting the actual content. So when you buy an NFT, you only own the URL on the blockchain that DIRECTS to the artwork, NOT the “artwork” itself. He did an exercise where he made an NFT that looks like a picture when viewed through OpenSea, but looks like a poo emoji when accessed via someone’s crypto wallet. Because ultimately the server hosting the image (to which the URL on the actual blockchain points to) is ultimately in control of the artwork.
Even worse, his NFT ended up being deleted by OpenSea. But somehow his NFT ALSO stopped appearing in his wallet. How is this possible? Even if OpenSea deletes the NFT from their website, the NFT should still be on the blockchain, right? Why doesn’t it still show up in his wallet? Well he says that due to this centralisation of supposedly “de-centralised” apps, his wallet is in fact communicating not with the blockchain directly, but through a few centralised platforms (one of which is OpenSea). So because OpenSea deleted his NFT, his wallet also no longer shows the NFT. It doesn’t matter that his NFT still belongs to him on the blockchain if the whole end-user system is totally divorced from the blockchain and instead reliant on the middle servers.

3) Finally, he is saying that Web3 as we know it now is really just Web2 with some fancy “Web3” window dressing. And the window dressing actually makes the whole system run worse than if it just stuck to pure Web2. But why force the window dressing? Simply to sell the whole thing as a next generation Web3 package as part of what he calls a gold rush frenzy over Web3.