“Giving power back to the individual” is the key mantra associated with this supposedly new and improved version of the web, which is delivered via public blockchains and driven by token economics. And indeed, much of Web3 sounds attractive in theory: Enthusiasts promise a web that’s fairer, not dominated by big tech companies, and where users control their own data.

Whether it’ll be possible to deliver on these promises is another matter: Signs to date indicate that turning theory into practice is proving difficult in key respects. We’re already observing the emergence of power structures very like the current unequal power structures that Web3 advocates want to replace. Let’s just examine a few key tenets of the Web3 vision and see how they stack up:

  • Decentralization. There’s no clear definition of what “decentralization” really means. Two aspects are clear, though: One, complete decentralization (i.e., no single point of control, anywhere) is neither possible nor desirable, and two, there’s a lot of “decentralization theatre”: For example, Ethereum activity would grind to a halt if centrally controlled services such as Infura and Alchemy were to stop; NFT marketplaces could decide unilaterally when and how to intervene; and the control points in so-called smart contracts would quickly become obvious when something goes wrong and somebody steps in to stop the code.
  • Code and protocols (they must be open and transparent). Ensuring that all code is available for inspection sounds great, but vanishingly few people have the ability, the free time, and the desire to inspect reams of complex code. Further, having all code running on public blockchains also increases the attack surface — and we can see from almost daily reports about Web3 hacks and exploits that code quality isn’t improving. It’s also worth remembering that open and transparent code has always performed critical tasks on the internet (think Apache and Linux, etc.); that hasn’t stopped today’s tech giants from earning trillions by concentrating power.
  • User-controlled apps and networks. This principle belongs in the category of “techno-utopian aspiration.” Most people won’t be interested enough in rule changes or matters of dispute to turn up and vote on them. There’s also the risk that vested interests will prevail to the detriment of the broader ecosystem: This isn’t a theoretical risk; we’ve seen this play out in several blockchain projects. And we know from online communities over the decades that community governance is a challenge at the best of times; adding a financial element increases the potential for disaster.

Somewhat ironically, perhaps, the amount of funding flowing into Web3 is part of the problem: Until the financiers turn off this cash spigot, Web3 hype will continue and “get rich quick” schemes will crowd out worthier developments. We’re already seeing the same trends of monopoly building, exploitation (we’re already seeing forms of digital sharecropping emerge in play-to-earn games), and value extraction that Web3 enthusiasts blame for tainting the existing World Wide Web. That’s why Forrester recommends that CIOs, CMOs, and other executives approach Web3 projects with great caution.

Interested in a deeper examination of Web3 promises vs. Web3 reality? Read the report, Web3 Promises A Better Online Future But Contains The Seeds Of A Dystopian Nightmare.

And if you’re puzzled by the blizzard of different names for this new version of the web, have a look at this report, which explains how we got here: Web3 And Web 3.0 Are Synonymous Today — But This Wasn’t Always True.