Web3 decentralisation offers solutions that Web2 could never solve. But the reluctance to change by centralised systems is fierce.
The old guard sits with immense power high up the scale of Maslow’s hierarchy. They possess both wealth and power. They support movements that on the surface sound good such as ESG (Environmental, Social, & Governance) and DEI (Diversity, Equity, and Inclusion) but have dire second order effects such as the crippling of innovation and the spurring of inflation via bad economic policy.
They invoke the movement of woke postmodernism which is even more radical than Marxism because they want to make changes to the core tenets of modernity. The postmodernists believe that science and math are tools of oppression and were created to serve the powerful at the expense of the oppressed. The wokeness movement has hijacked institutions all across the country from Harvard to Stanford to Google to Facebook to IMF to WTO. ESG and DEI are two of the main manifestations.
The old guard represents the BlackRocks, Apples, and Amazons of the world vs. decentralized Web3 and crypto whose use case is freedom to transact value which results in the freedom to communicate without being censored or cancelled. Without the freedom to transact, all other freedoms collapse. The right to transact underpins all other rights. You don’t have free speech if you can’t buy a stamp or a net connection. You can’t assemble if you can’t buy gas or a ticket.
Enacting uneconomic laws due to mainstream FUD hamper or even cripple economies as uneconomic regulations and mandates lower GDP while inflating the cost of goods and services. This is what has happened by way of ESG, DEI, and powerful companies that support such agendas such as BlackRock who gain state favours in China by forcing companies to adopt ESG practices in the United States which then weakens the US because the Chinese companies are not forced into the same uneconomic ESG standards.
ESG punishes companies such as Chevron to take responsibility for Amazon’s trucks if those trucks are not conforming to ESG’s standards. That’s like telling McDonald’s to take responsibility for anyone who eats a Big Mac. This is all spurred from ESG’s wave of “woke morality”.
The Web3 advantage over Web2 is clear. Examples abound.
The solution to identity theft: Decentralised digital IDs
Problem: The digital world is currently vulnerable to scams, with the US, UK, and EU considering strict regulations that would require recording all wallet transactions. These regulations would classify websites interacting with wallets as brokers, mandating the issuance of tax statements. Compliance with these regulations would be expensive and challenging, potentially affecting all DeFi apps and services like etherscan. Many crypto companies may become outlawed as they can’t meet these requirements.
Solution: We propose a solution that establishes rules on a decentralized blockchain-based identity, reducing reliance on third parties. This identity would be based on a digital passport containing biometric information for authenticating the passport holder via a biometrics app. This approach addresses government concerns about tracking crypto transactions by providing each individual with a secure sovereign identity. The identity owner can create multiple aliases, all linked to their biometric passport.
Raido Saar, who leads the Estonian Web3 Chamber, of which I am a co-founder and board member, met with prominent cryptography professors earlier this year. They found the idea highly intriguing, feasible, and estimated a nine-month timeline for a minimum viable product (MVP). They plan to obtain eIDAS certificates for global trustworthiness, and one of the professors has already implemented this for himself.
The creator of Cardano supports decentralizing identities for AML/KYC but points out that current legacy identity providers, which supply information like credit scores, discourage customers from using DeFi.
The solution to deep fake videos
While identity theft remains an issue, so too are deep fakes. Building on top of the existing Bitcoin infrastructure almost as if it were the network layer of a new truth web, Factom hashes and organizes incoming data to establish proof that, say, 10-minute blocks of video from a given camera would live inside the Factom data structure, and “truth” could be assured for that window of time. Factom uses a hardware solution that digitally signs and hashes the data instantly. One then can confidently claim that a video is “real” and was really taken by the camera that digitally signed the data.
Web3 can replace big (…) dysfunction
Inquiry: Should sectors dominated by powerful entities such as big pharma, big energy, and big oil in the US be replaced by blockchain, Web3, or decentralised systems? Many believe this change would eliminate corruption often associated with centralized power. Presently, any individual or company that threatens the profitability of these sectors is either bought out or dismantled. Controlling petro dollars is crucial for the US, particularly regarding big energy and oil. These entities are neither entirely good nor bad; the question revolves around their functionality versus dysfunctionality.
Deeper Examination: Would the world benefit from dismantling artificial monopolies, including the sovereign status of the dollar, which allows the US to benefit from petro dollars? While the US might initially face setbacks, one could argue that, over time, a more connected and decentralized world might experience faster growth and increased productivity. However, getting centralized governance systems to agree to such substantial changes is a monumental challenge. In practice, this transformation is unlikely to occur. The alternative approach involves nurturing what Balaji Srinivasan calls the “network state”. The membership of such a state could surpass that of many governments, as more people embrace a decentralized Web3 state.
Dysfunctionality: Big pharma and big energy/oil are seen as dysfunctional in how they suppress groundbreaking technologies. Big government, too, exhibits dysfunctionality by protecting specific sectors, limiting competition, and increasing prices. For instance, the US government granted Ma Bell a monopoly in the 1930s, stifling telephonic innovation. This practice has been recurrent.
Balancing Act: The pharmaceutical industry, despite being a major contributor to deaths, and governments using mainstream media (MSM) to manipulate public opinion through fear, do serve some beneficial purposes. While there is significant attention given to deaths and addiction related to pharmaceutical drugs, the percentages remain relatively small. One could categorize big pharma as 80% functional and 20% dysfunctional, along with governments manipulating and deceiving the public as they strive to maintain order. Nevertheless, the trends in both scenarios are concerning. Corruption has been seeping into both sectors for decades, and this trend has accelerated in recent years, triggered by events like 9/11 in 2001, the financial crisis of 2008, and the COVID pandemic in 2020. These events allowed governments to enact laws that curtailed individual rights, disrupted economic stability, and led to various detrimental consequences, such as weakened immune systems, domestic violence, soaring rates of depression and suicide, and the erosion of social skills among children. #jonathanhaidt
Ongoing crypto love-hate
Despite web3 offering superior solutions where many outdated legacy systems could be replaced with more efficient and cost-effective new technologies, governments are reluctant to relinquish control. Among web3 technologies, governments are targeting cryptocurrencies because they have the largest attack surface. This is evident in countries like China, which has had a love-hate relationship with cryptocurrencies. Interestingly, earlier this year, they showed more affection for crypto by permitting Hong Kong residents to trade certain cryptocurrencies. This could imply a strategic game is afoot on which country gets the upper hand in benefiting the most from web3 technologies.
Meanwhile, the US, UK, and EU are taking steps to restrict cryptocurrencies. While the UK’s approach may seem less aggressive than that of the US, they are essentially two sides of the same coin. Earlier this year, the US was initiating Operation Chokepoint 2.0, and the SEC targeted various crypto exchanges by issuing Wells notices. But it’s possible that Operation Chokepoint 2.0 serves as a smokescreen to encourage the UK and EU to pass anti-crypto laws.
Recent developments indicate that the US may be attempting to dominate crypto by granting major institutions like Fidelity the authority to operate regulated crypto exchanges. Additionally, the world’s largest hedge fund manager, BlackRock, is a strong contender to secure SEC approval for their Bitcoin ETF, as they are collaborating with NASDAQ as a third-party overseer to address the SEC’s concerns. However, this approval is unlikely to occur before Q1 2024 at the earliest.
It remains to be seen how the crypto space race unfolds or unravels. One thing is for sure. Web3 offers superior efficiencies at reduced costs. Blockchain is the beating heart of Web3. Cryptocurrencies are the blood flowing through blockchain’s veins. Governments will want to capitalise on these efficiencies without giving up control of their fiat currencies or of their legacy centralized systems. But they cant have it both ways. In the meantime, web3 funding has been hampered by the crypto bear market which is well into its second year as well as being overshadowed by AI for the time being even though both are synergistic. But web3 developers remain intact as it continues its march forward.
(͡:B ͜ʖ ͡:B)
Dr Chris Kacher, PhD nuclear physics UC Berkeley/record breaking KPMG audited accts in stocks & crypto/bestselling author/top 40 charted musician/blockchain fintech specialist. Co-founder of Virtue of Selfish Investing, TriQuantum Technologies, and Hanse Digital Access. Dr. Kacher bought his first Bitcoin at just over $10 in January-2013 and contributed to early Ethereum dev meetings in London hosted by Vitalik Buterin. His metrics have called every major top & bottom in Bitcoin since 2011 to within a few weeks. He was up in 2018 and 2022 vs the avg performing crypto hedge fund (-54% 2018 [PwC], -47% 2022 [BarclayHedge]) and is up well ahead of Bitcoin & alt coins over the cycles as capital is force fed into the top performing alt coins while weaker ones are sold.
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