Web3 keeps falling short of real decentralization
Focusing on a few key geographic markets isn’t decentralization: Web3 needs to do better
Midjourney modified by Blockworks
While a lot has changed in the decade since Satoshi Nakamoto invented bitcoin — including the rise of centralized financial services for trading, lending, borrowing — decentralization remains a core value for crypto.
Yet, time and time again, Web3 is falling short of true decentralization.
Web3 should reflect the diversity of the global population, including the full spectrum of geographic regions and technical expertise. If the industry doesn’t start taking this into account, full decentralization — and geographic diversity — will remain out of reach forever.
It’s no secret that a major focus of Web3 is to onboard new users with the ultimate goal of worldwide adoption.
Let’s first acknowledge that regulations pose legitimate restrictions on where Web3 DApps can deploy and allow users access. Beyond the compliance policies of each jurisdiction, there are many other factors that determine how well a region supports crypto, including job opportunities, company headquarters and industry conferences.
It’s worth noting that the cities that made it into a recent ranking of crypto-friendly countries include Singapore, London, Seoul, Dubai, Abu Dhabi, Silicon Valley, Los Angeles and New York City. All of these also happen to be cosmopolitan cities with some of the highest GDPs.
Perhaps not surprisingly, user acquisition spend in the form of in-person meetups, demo days, grant programs and other marketing and advertising initiatives are often directed to populations based in these very same cities.
But true network decentralization cannot be reached without incorporating the full spectrum of users at every level of the ecosystem. This means educating people in rural and under-resourced areas on how to become node operators. It means helping those with lower access to computing power gain access to the financial tools and services that blockchain networks are supposed to enable. It also entails hiring talented people for Web3 jobs outside of cosmopolitan cities. According to Pantera’s recent compensation survey of Web3 work, the vast majority of crypto jobs (88%) are remote, so there is no logistics-based reason to limit hires based on geography.
Don’t underestimate commonly overlooked regions
Chainalysis’ 2023 Global Adoption Index reveals which countries have the highest day-to-day usage of cryptocurrencies. Notably, Chainalysis does not define “usage” as transaction volume, which would have resulted in the wealthiest countries landing at the top of the list.
Instead, the report focuses on the nations in which people are putting the greatest share of their wealth into cryptocurrencies based on a variety of factors. India, Nigeria and Vietnam take the top three spots, followed by the United States, Ukraine, Philippines and Indonesia.
Read more from our opinion section: The US is losing the crypto race
Notably, most of the countries in the top ten have emerging rather than established economies. And while overall adoption is down globally, this is not the case in Asia. The countries with highest adoption are similar to those Chainalysis identified in 2022 — though it’s worth pointing out that India and Nigeria surpassed Vietnam in terms of adoption this year. The success of Axie Infinity, which was founded in Vietnam, kicked off a massive wave of adoption in the country. The incredible impact a single game had on adoption (at least for a time) suggests that improved UI/UX in Web3 gaming could have a similar impact.
Across the adoption index for this year and last, countries with emerging markets are adopting crypto far faster than wealthy nations. This supports the core ethos of crypto, which is not to make the rich richer, but rather to expand access to finance and other services.
The adoption indices also lend data-based validation to the understanding that there is an eager and interested audience in countries with emerging markets. Only by putting “boots on the ground” in every part of the globe will Web3 become ubiquitous.
Don’t miss the next big story – join our free daily newsletter.