Is Moxie Marlinspike Right About Web 3?

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“Web 3 is not easy to criticize, because it tends to mean different things to different people.

Criticisms abound, each with slightly different operational definitions of the term, but it’s rare that you’ll come across one with the kind of technical depth you might expect from a coding developer – someone who’s dealt with code and learn how these systems really work.

This article was excerpted from The Node, CoinDesk’s daily roundup of the most pivotal stories in blockchain and crypto news. You can subscribe to get full Newsletter here.

Late last week, crypto expert and privacy expert Moxie Marlinspike, best known for creating the crypto-messaging service Signal, released a lengthy article on the current state of “Web 3” and the ways in which utopian rhetoric about cryptocurrencies tends to obscure technical facts from the blockchain-powered internet as it is. available today.

For Marlinspike, “Web 3” is a decentralized Internet powered by blockchain and cryptocurrency. If “Web 2” is the Internet as we know it today, with companies like Amazon Web Services, Google, and Microsoft providing back-end tools for users to create their own websites (such as cloud computing structures and rentable servers), then “Web 3, the Internet should be the Built on public blockchains, with no central institutional intermediaries.

But as Marlinspike points out, this is not how the crypto ecosystem is evolving in practice.

Since most PCs do not run a node, and therefore do not maintain a full copy of the blockchain locally, they need another way to access the data in the ledger. Enter APIs: Code libraries that provide useful shortcuts to pull data from a specific blockchain.

Infura, a product of blockchain software giant ConsenSys, and Alchemy, a startup recently valued at $3.5 billion, are the main suppliers of these APIs, notes Marlinspike. So-called “decentralized applications” or “dapps”, such as Mirror, OpenSea, and Zora rely on these systems to retrieve data from public blockchains – sort of like intermediaries.

This is true for most sites that ask you to sign in with the “connect wallet” button instead of your username and password, and for online wallets like MetaMask, which exist as custom websites and add-ons for Internet browsers. They live on the central internet that we are already used to.

Here’s what Marlinspike has to say about MetaMask’s reliance on APIs from private companies.

A wallet like MetaMask needs to do basic things like viewing your balance, recent transactions, and your NFTs, as well as more complex things like creating transactions, interacting with smart contracts, etc. In short, MetaMask needs to interact with the blockchain, but the blockchain is built so that clients like MetaMask cannot interact with it. … MetaMask achieves this by making API calls to three companies that are standardized in this space.

These three companies are Etherscan, which is now the leading explorer service for tracking transactions on the Ethereum blockchain; Infura, which provides a shortcut to access the wallet balance; and OpenSea, which provides a list of non-fungible tokens (NFTs) for the wallet. (Although Etherscan is considered a “public good” in the crypto space, it’s a Malaysian company that happens to be backed by the Digital Currency Group, which also funds CoinDesk.)

Here’s it in the MetaMask source code, which Marlinspike reproduced in his article:

Get[PASTE YOUR ETH ADDRESS HERE]& offset = 40 & order = desc & action = txlist & tag = latest & page = 1 HTTP / 2.0

Whatever Etherscan coughs up is then connected to MetaMask. This is not a problem as long as Etherscan – a centralized service from a private company – behaves correctly. It’s another step in the process, one without which MetaMask won’t work.

The same goes for OpenSea. To prove his point, Marlinspike minted an NFT that displays a different image depending on which server you’re viewing it from. For some reason – Marlinspike said he never knew why – OpenSea removed it.

OpenSea, a multi-billion dollar private company, is within its rights to remove images, and it does so often. The problem is that MetaMask, which is claimed to be a non-custodial and censorship-resistant wallet controlled by its users, has also stopped displaying NFT. The token was still on the blockchain, but MetaMask was only scanning data from OpenSea, unlike the blockchain itself. Because it is designed to operate without a working node, MetaMask cannot pull data directly from Ethereum.

This is a very technical way of looking at a large-scale issue with the state of cryptocurrency infrastructure in 2022. What does it mean for an app to be truly decentralized? Perhaps the benefits of encryption are that ordinary users will not care whether a few large companies will play such a critical role in the data pipeline. But the truth is that the market has already been standardized to some extent, just like “Web 2.”

Vitalik Buterin, one of the inventors of Ethereum, responded to Marlinspike on Reddit, essentially conceding many of these points. He wrote: “Moxie’s criticism in the second half of the post shocked me because it has a valid critique of the current state of the ecosystem… but it is missing where the blockchain ecosystem is headed.”

Marlinspike expected this response.

Marlinspike’s blog post reads, “Even if this is just the beginning (and may very well be!), I’m not sure we should take that any solace. I think the opposite is true. It seems we should note that from the start, these technologies have trended on the the spot towards centralization through platforms in order to achieve it, that this has not had a negative impact on the velocity of the ecosystem, and that most participants do not. They do not know or care that this is happening.”

See also: What is Jack Dorsey Beef with Web 3 Really | Opinion

On Twitter, Jake Brukhman, founder of a crypto investment company called CoinFund, made a bold move Claim That “Web3 is in its early stages, not yet created or approved.” This means that the real promise of Web 3 is the idea that you can run your own node. Brukhman argues that even if consumers don’t want to, or don’t even know what a knot is, the possibility is what matters.

Here’s the thing about cryptocurrency: it’s always up. Although the market total was worth about $3 trillion as recently as November, we’re still working out what’s useful, and what problems it actually solves for the average audience.

There is enough money and development in these systems that it is not unreasonable to expect certain aspects of the space to become more decentralized over time, as Buterin and Brockmann predicted. But there is also a huge amount of money to be made by centralizing a claim in the new internet, and selling off the untrusted computing vision of a private company backed by venture capital.

If Buterin is right, Web 3 could really offer something new. Otherwise, it risks perpetuating the very power dynamics from which it has always tried to escape.

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