- Jack Dorsey has unleashed a barrage of anti-Ethereum tweets, and is particularly derisive of Web3
- NFTs have emerged as a particularly polarising aspect of the Web3 phenomenon
This essay first appeared as “Everyone Hates Web3“ in Blockworks’ daily newsletter on December 22.
“It is difficult to get a man to understand something when his salary depends upon his not understanding it” — Upton Sinclair
The Monetarists vs the Technologists
Ever since I have been in crypto, the industry has divided itself into two groups: the monetary crowd, and the technology crowd.
Back in 2017 there were events in New York based on this idea. “The Future of Crypto: Wall Street vs Silicon Valley.”
I’ve always thought crypto was a bit like the Mirror of Erised. What you see when you look at it largely depends on your pre-existing world view. If you are monomaniacally focused on the Fed, money printing and moral hazard, chances are you see crypto as a monetary revolution. Jeff Booth does a great job of explaining this point of view.
For most of crypto’s 12-year existence, the monetary crowd represented the dominant point of view. Bitcoin was, after all, a direct response to irresponsible monetary policy. For years, it was the only successful undertaking in crypto, and it is still (in my humble opinion) the king.
But there is another idea that is beginning to take hold of the popular narrative around crypto that has nothing to do with monetary revolution. This narrative, which falls under the umbrella of “Web3” began around the time Ethereum was created in 2014. The idea is that crypto is the next evolution of the internet, and has more to do with digital property rights than hedging inflation.
For the record, I don’t see these ideas as being mutually exclusive. In fact, I think they’re both correct and don’t understand why we feel the need to argue about them. But we are. And I think I am starting to understand why.
Jack Dorsey Hates Web3
If you work full time in crypto, you are no stranger to criticism. For some reason in crypto, criticism (on both sides!) comes with a strong emotional flavor and a side of ad hominem attacks: Bitcoin is not just going to fail, it’s rat poison squared. Gary Gensler is not just misinformed, he is a liar and a fraud — that kind of thing.
Personally, I wish it wasn’t like this, but it’s always interested me and helped convince me that this space was real. After all, large groups of people rarely get riled up about ideas that turn out to be nothing burgers.
But in the four years I’ve been in this space, I have never seen the level of pure emotional venom that Web3 has inspired.
Enter the newly ex-CEO of Twitter, Jack Dorsey. I’ve seen Jack tweet and speak positively about Bitcoin, so I always just…kind of assumed he was onboard with the whole space?
Turns out, that is not the case!
It’s not just one or two of these tweets. There are 20+ tweets in the last two days alone dedicated to expressing just how much he hates Web3 and the VCs that are funding it.
Jack’s criticisms focus on VC’s here, but I think a discussion of “Are VC’s bad?” is missing the point.
For me, it is more useful to look at Jack’s tweets as part of a larger trend. Elon Musk, for instance, looks like he’s on the same page but for different reasons.
NFTs have inspired their own unique brand of hatred. For a minute in November it looked like Discord was going to integrate Ethereum into their platform before the CEO got pushback from thousands of its members.
Ubisoft got similarly virulent feedback from their users when they announced the launch of NFTs, which have also suffered from poor adoption.
Each set of dissenters here (Jack, Elon, Discord users, and Ubisoft users) have a different set of criticisms for Web3. The similarity that’s worth pointing out is the extreme level of emotion that’s showed up in all cases. And if you’re wondering what I mean by that, just take a look at the responses to this tweet from Jason.
Seriously, click into the quote tweets to see what people are saying. It is pure, unadulterated, vitriol.
The question is, why?
Blockchains Destroy Revenues
There’s a phrase that I heard in my early days of crypto that has always stuck with me: “blockchains don’t create revenues, they destroy them.”
In one sense, this is good! Take a look at something like Uniswap, which is essentially 30 people and 8 lines of code that does almost as much trading volume as Coinbase. From the perspective of progress, this is great. Uniswap has eliminated unnecessary overhead and given consumers more for less. But if you’re looking at Uniswap from the perspective of NYSE…suddenly it doesn’t look so great. In fact, it looks pretty bad.
If you look at crypto from the perspective of disruption, suddenly these reactions begin to make more sense. For a long time, when crypto was only viewed through a monetary lens, the ones getting disrupted were central and commercial banks. Bankers have long pushed back on Bitcoin, but there hasn’t been a public outcry because let’s be honest…no one’s going to shed any tears for Jamie Dimon or Jerome Powell.
Web3 is different though because it represents disruption for companies that people love. It’s one thing to root for Bank of America to get disrupted, but quite another for Twitter or your favorite video game. These are beloved products! People don’t want to see them go away.
But for the leaders of these companies, the conflict goes even one layer deeper. Remember, Jack Dorsey not only built his career and legacy on Web2, but he helped pioneer the principles of the whole industry.
If decentralization and transparency are the foundation of Web3, then centralization and efficiency were the religion of Web2. So not only does Web3 represent a threat to the legacy of Web2, but it invalidates many views that they (consciously or not) held as sacred.
Methinks the Lady Doth Protest too Much
At the end of the day, this is just me speculating. I don’t mean to belittle the criticisms from Jack or the Discord or Ubisoft communities. Especially in Jack’s case, I think he makes some valid points.
But I also believe that people tell you a lot based on how they react to things. It’s the emotional component of the dialogue that makes this interesting to me.
I have learned from Tyler Neville: Whenever there is a big divergence in public opinion, it’s time to sit up and take notice — especially when that divergence involved a spike in emotion.
When I look around today, the biggest divergences I see are in three areas: China, Elon Musk, and Web3.
I’m not here to tell you how to feel about any of them. What I am here to tell you is that if you’re interested in outsize returns, these are good places to start forming an opinion.
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