Web3 is not only about ‘ownership’ — it’s so much more

The fever dream that was the bull run of 2021 clearly led to 2022. As we are actually again within the depths of a bear, it’s price revisiting among the narratives we accepted as reality and questioning if these are actually the phrases we wish to carry ahead into the subsequent cycle.

Certainly one of these mantras that has regularly been some extent of discomfort for me was the framing of Web3 put ahead by traders Packy McCormick and Chris Dixon: 

Web1: learn

Web2: learn/write 

Web3: learn/write/personal

Possession is certainly part of Web3 — however is it actually its defining high quality? If the first worth proposition of Web3 was possession, certainly we may all simply go purchase shares of Amazon, Google or JPMorgan? We are able to simply personal items of the Web2 web or monetary infrastructure at the moment, so this can’t be the defining high quality that makes this house distinctive.

Possession is the flawed body for Web3 and incorrectly facilities the dialogue. By specializing in possession, it implicitly introduces a notion of worth or monetization, moderately than a extra nuanced concentrate on management and a consumer’s rights inside a system. The 2 are solely not directly associated. You possibly can have one thing worthwhile over which you haven’t any management (akin to proudly owning a share of a megacorp). You too can have management over one thing that has no worth (for instance, POAPs — that are digital badges commemorating your attendance at an occasion). Implicitly, the argument Web3 makes is that by higher enshrining consumer rights at a technical degree, we create the substrate for higher-order worth creation that’s returned extra equitably to the individuals of the system. 

By beginning the dialogue round possession, the form of exterior discourse has turn into misaligned (see: information shops conflating the failures of centralized establishments with blockchains), limiting the body of what falls beneath the Web3 dialogue and what these applied sciences can probably allow.

The previous yr has been a painful reset in some ways, however hopefully the yr forward will likely be a possibility to recenter the dialogue about what we’re doing and why. 

What does possession miss? 

First, “possession” has a special which means on this house. If we’re speaking about an L1, certain, there may be possession of a token, however what that token represents is basically tied to those that take part in governance (e.g., EIP processes), those that implement, and people who in the end run the code on their nodes. The distinctive side of Web3 is the flexibility to know that your rights — as enshrined by the system itself — can’t be simply infringed upon, participation in these techniques is open, and you keep the flexibility to vote along with your toes in case your values diverge.

Second, possession is a limiting body for blockchains and the worth they bring about. Balaji’s ledger of file doesn’t hinge on any particular person’s potential to personal a supply of reality, however that this ledger could be transparently inspected and verified. It’s the transparency of those techniques that permit on-chain sleuths like ZachXBT to hint hacks and frauds, and the crowdsourced risk-modeling in instances of systemic stress.

Third, the concentrate on possession limits the scope of what falls beneath Web3. There are many instruments which can be or are more and more changing into vital components of Web3, akin to zero-knowledge proofs and InterPlanetary File System (IPFS) that indicate nothing about possession. Each, nonetheless, enshrine additional rights at a technical layer — such without any consideration to privateness and the flexibility to exit — for broader swaths of the interactions we’d have on the internet. 

If not possession, then what?

Verifiability is the clear throughline in all of those contexts. With out the flexibility to confirm, you as a consumer are unable to voice your opinion.

With blockchains, we have now verifiability of state by way of consensus and the flexibility to run our personal nodes. It’s this verifiability of state that enables anybody to test the identical shared ledger, and arrive at a shared settlement about what the present model of the world is. After we add in cryptography with user-owned keys, we implicitly get possession, as we are able to confirm on our shared ledger who controls which property.

This implied model of possession is rather more restricted — the ledger could possibly be forked, and another person might mint a non-fungible token with an identical metadata — however highly effective. The substrate of possession sits upon a basis that’s considerably extra resilient. This resilience comes from the checks and balances inherent to the operation of those public ledgers and in the end from the truth that customers can at all times fork. (Be aware: This doesn’t imply voting along with your toes will at all times be acknowledged by others, however your proper to take action is retained — see: Ethereum proof of labor). 

This theme of verifiability extends to a broader set of non-blockchain applied sciences as properly. With IPFS, you may confirm (by way of CAR information) that the info we request is verifiably the identical as the info we obtain — which means, we don’t should depend on a trusted server to make sure the suitable bytes are being handed round. This uncouples knowledge from particular servers, permitting customers to port storing knowledge between particular person service suppliers, their very own computer systems, and even throughout incentivized storage networks. This provides resilience from the union of those applied sciences moderately than any particular person stack. With zero-knowledge proofs, we are able to confirm that the output of some non-public computation was certainly accurately performed — the premise for enabling privateness (e.g. ZCash) in addition to for enabling off-chain scaling (e.g., ZK rollups).

With all the above, none of them require a notion of possession. All of them depend on verifiability. 

Why verifiability will likely be vital for the longer term

For these of us who consider deeply on this house, it will probably really feel extra apparent why verifiability issues.

When you have got this permissionless, open, substrate for constructing, it will probably result in larger composability, which might snowball right into a system larger than the sum of its components. Take decentralized finance (DeFi) sharing interoperable protocols that permit for extra highly effective interactions. The transparency of those techniques may end up in higher danger administration, as we’ve seen throughout each risky interval over the previous few years, the on-chain solvency of positions and liquidations could be each noticed and acted towards. Distinction this with FTX, the place consumer property weren’t held 1:1 and customers solely found the hurt after it was too late.

However more and more it turns into apparent that these worth propositions will not be going to be important only for the techniques we construct for ourselves however for the web at giant. 

With Dall-E and ChatGPT, we see that high-quality and convincing synthetic intelligence will likely be right here inside our lifetimes. With the act of creation changing into commoditized, verifiability will turn into a vital software for enabling authenticity. With Dall-E, anybody can create a likeness of a creator’s work with a number of phrases, however with an NFT, we are able to no less than confirm if it was generated by the unique artist. With ChatGPT, anybody can create a believable rip-off to persuade a consumer to offer away cash, however with cryptographic instruments, we are able to no less than depend on a supply of reality to find out whether or not a counterparty on the internet is actually a member of the group that they declare to be.

Lastly, as religion in establishments continues to degrade, verifiability will turn into a vital consider rebuilding belief in our techniques. For example, the current change in management at Twitter has highlighted a proven fact that has been true since its inception: Having a central actor with the ability to spice up, deboost, platform or deplatform content material offers that actor vital management over public discourse. 

Whereas one can hope that the central actor in cost is benevolent, there is no such thing as a assure, and customers don’t have any express approach to categorical their disagreement. In distinction, having a technical basis that enshrines primary rights (no matter the central actor in cost) in a verifiable manner, and constructing layers of subjective decision-making on high of that basis, feels extra aligned with a social contract based mostly on consumer consent. Web3 natively has these properties constructed into it. Programs like Bluesky, Farcaster and Lens permit for credible alternate options to present centralized variations, they usually embody consumer rights as a default and permit for a market of subjective values to be opted into on high.

Conclusion

Possession is only one property of Web3, and whereas fascinating, it isn’t essentially the most fascinating nor essentially the most worthwhile side of those applied sciences. Web3 permits a technical enforcement of a social contract, and that’s solely potential due to verifiability. Whereas we’re nonetheless within the depths of a bear market, we have now the house to reassess our values. Personally, I’d prefer to see a imaginative and prescient of Web3 that’s much less about fiefdoms and extra about freedom.