Web3! this latest internet buzzword encompasses an egalitarian vision of a World Wide Web that's more reliable, based on trust, and, inevitably, built on the blockchain. This plan for the future is being pushed by startups, venture capitalists, and Silicon Valley bigwigs, all of whom stand to make some sweet, sweet cryptocurrency from a new breed of web app that takes the power from the platforms and puts it back in the hands of the people.
This week on Gadget Lab, WIRED senior writer Gilad Edelman joins us to talk about whether the reality of whatever Web3 becomes will ever live up to Silicon Valley's rosy vision of it.
Read Gilad’s story about Web3.
Gilad recommends the book Digital Gold: Bitcoin and the Inside Story of the Misfits and Millionaires Trying to Reinvent Money by Nathaniel Popper, and also Boone Ashworth’s story about Fire Twitter on WIRED.com. Mike also recommends the Fire Twitter story. Lauren recommends the show Broad City.
Gilad Edelman can be found on Twitter @GiladEdelman. Lauren Goode is @LaurenGoode. Michael Calore is @snackfight. Bling the main hotline at @GadgetLab. The show is produced by Boone Ashworth (@booneashworth). Our theme music is by Solar Keys.
If you have feedback about the show, or just want to enter to win a $50 gift card, take our brief listener survey here.
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Lauren Goode: Mike.
Michael Calore: Lauren.
LG: Mike, what if I told you that you've been doing the internet all wrong? You've been too trusting about how it works and it's all centralized and stuff?
MC: I signed up for Twitter, so every day I feel like I'm doing the internet wrong.
LG: What if I told you that the blockchain is going to fix everything?
MC: I would run in the opposite direction.
LG: Well, just stick around at least for this podcast.
[Gadget Lab intro theme music plays.]
LG: Hey everyone. Welcome to Gadget Lab. I'm Lauren Goode. I'm a senior writer on the blockchain. I'm a senior writer at WIRED.
MC: My name is Michael Calore. I'm a senior editor at WIRED.
LG: Which is also on the blockchain.
MC: Oh no.
LG: We're also joined by WIRED senior writer, Gilad Edelman, blockchain expert.
Gilad Edelman: This is going to be a disaster.
LG: All right. So today we're talking about the web. You may have heard of it. What you may be a little bit less familiar with is this idea of Web3 A.K.A, the next phase of the web. It's a buzzword that's been thrown around a lot by Silicon Valley lately. But what does it actually mean for how we're going to experience the web? So, Gilad, this week you talked with the person who coined the term, Web3. His name is Gavin Wood, and we've run this as a Q&A WIRED.com, which everyone should go read. But tell us, what is Web3?
GE: Web3 is, as you say, it's a buzzword. It's not any one concretely defined concept. But the idea is that it's the next phase of the Web. So Web1 is go back to the '90s era. This is the static webpage. It's very decentralized. This is an important point. Typically, you would type in a URL and go to that site to engage with stuff.
MC: And that would be like a server in a building somewhere?
MC: And each one is different?
GE: Right. And in the internet's early days, it just existed on everybody's computers. Web2, it refers to the era that we're living in now, where you have a lot of concentration of online activity in dominant platforms. So this is the era of the dynamic app layer or the dynamic web page layer on top of the internet. And so, a lot of online activity has got funneled through platforms like Facebook, YouTube, Amazon. And a bit further up Stack, you have a lot of… Or down the Stack, I can never remember the arrow there, but you also have concentration of computing, right? AWS, or other major Cloud providers. So there are all sorts of reasons that people are unhappy with the status quo. So the idea of Web3 is to bring back that early spirit of decentralization using the blockchain.
LG: So does Web3 have to exist on the blockchain and have to involve cryptocurrencies? How fundamental is the blockchain to what it is?
GE: That's a really good question. Because at the broadest level of abstraction, the idea here is decentralization, which is a concept. It's not a particular technology. But the energy here is really coming from the blockchain. And when people talk about Web3, they're absolutely talking about blockchain-related technologies. So Gavin Wood told me that, the thing about blockchain is that it's the only technology he's ever come across that's about distributing power rather than centralizing power. And I don't know if I totally buy that, but there are reasons to believe that that might be true in the sense that…
I mean, the whole point of blockchain going back to Bitcoin is that you don't need a central authority saying what's true and what's false. Because the innovation of the blockchain that made Bitcoin such a big thing to begin with is that the ledger, the record keeping is distributed and it's happening on all of the computers that are in the network. To somebody like Gavin Wood, that's a really powerful idea, because in his view, a huge problem right now is that we have to trust central gatekeepers like monopolistic tech companies, and also like the centralized government regulators that supposedly have power over them. And so, to somebody like Gavin Wood and other people who are excited about this technology, the promise of using blockchain is that you can somehow break free of that need to put your faith in a central authority.
MC: And also break free of the possibility of being regulated? It seems to me like that's part of the motivation here. Because if the argument is that the internet is broken, because all the tools that we use are part of these large platforms that are owned by big corporations, that's not necessarily true. As you pointed out in your Q&A, the internet is built on Open Source Software, and that Software talks to each other using protocols that nobody owns. So if I wanted to, I could build a server in my home and start serving my own webpages and run my own email server and run my own Mastodon server. I could do all of these things on my own right now as it exists. So why is that something that needs to be fixed? Is the move towards Web3 like all the technologists are saying, "Oh, Web3 is the future?" Are they actually saying, "We need to build a new layer on top of this technology that already exists"? Or are they calling for a return to the more pure days of the web before the platform's dominated?
GE: It is. We are talking about a new layer because as you say, and as I mentioned, thanks for calling that, I thought that was pretty smart, in the Q&A, the internet as distinct from the web, is decentralized already.
MC: You can build anything decentralized on the internet now if you want.
GE: Right. And as you say, Mastodon is a decentralized, open-source Twitter alternative, right? That's what Mastodon is, Twitter alternative?
MC: Yes. It's easy to forget.
GE: Yeah. Yeah. This is such a frothy mix of different ideas that there's different answers to that question. There's a lot of economic activity happening right now in the crypto space that, especially on display with wave of ICOs, initial coin offerings a couple years ago, that looked pretty clearly like regulatory arbitrage, where you were getting people to invest in something just like you were with a security or stock, but because it was something different, it was a coin. It didn't have to register with the SCC. You didn't have to follow regulations and all lot ordinary people lost their shirts. So there is that side of it.
But, I think the attitude of the ideologically motivated Web3 people like a Gavin wood. And when I don't even mean ideological as a pejorative, just people who are motivated sort of by philosophical commitments. It's not wanting to get around regulation so much as having no faith in regulation. So when I look at a problem like Google stranglehold over so much of the internet and advertising markets and mobile markets and browsing and search and everything, to me that looks like a policy problem. And a lot of people treat it as a policy problem, right. And? And the FTC and the DOJ and state attorneys general are working on that problem right now. But a lot of people in the Web3 space, somewhat understandably just have no faith in the government fixing the monopoly problem. And so they turn to the appeal of technological solutions rather than policy solutions.
LG: I want to bring it back to the actual experience on Web3, because you asked Gavin Wood a really good question. You asked him for a specific example of how this would work. How two app developers or creators, or even consumers would use an app that is built on Web3. How did he describe this?
GE: I didn't totally pin him down on this, but I think the answer is, it wouldn't look that different in theory from apps that we interact with now. Because the main differences are going to be things that are below the surface level or the user level. But I actually had an interesting conversation yesterday with the founder of a company called Presearch. And this is a search engine that is designed to be a Google alternative. It's a very privacy focused search engine and it's incorporating a lot of Web3 principles. So for example… I mean, on a technical level, it's distributed in the sense that instead of having a bunch of servers in a warehouse running the software, it's actually users can elect to be nodes in the network. And so it is decentralizing that respect. When you put in a search query, it gets routed to nodes in the network.
And to incentivize people to volunteer their computing power in that way, there's a coin associated with it, a token, a crypto token associated with it. And this is a really common feature of Web3 businesses, which parenthetically that mostly don't exist. Most Web3 businesses are business ideas or proposals and not actual businesses, but there are some that are closer to reality and Presearch is one of them. The privacy browser Brave is actually maybe the most established. But this idea of decentralization is still hypothetical. As Colin, the founder of this company, freely acknowledge when we were talking yesterday, he said, so far, Presearch still controls how its business functions, how the software works.
But in theory, one day he would like to see a setup where the users and the people, the stakeholders, who hold these coins, and by the way, you also get rewarded just by doing searches, they will have some way of participating in the governance of the platform. And this is a crucial idea behind the Web3 vision. Is that you, the user, or the participant, you are somehow active in providing the service and maybe literally voting on how things happen.
LG: We're going to have to take a quick break, but I did want to ask you, how does this creation of applications for Web3 create value in the goods that people are exchanging on the internet? Because we're hearing about how this is going to open things up for the creator economy who make digital goods or apps. How does that actually work?
GE: Yes. That's such a good question. It depends exactly what you're talking about. So in the case of a Web3 company, like the one I was just talking about, generally, the economic value here is from the token associated with it. So for example, with Presearch, the idea is that advertisers who instead of just bidding with dollars to have their ad displayed at the top of the search results, they have to bid in this coin. But they don't actually spend the coin. They stake it. So they have to buy the coins if they want a bid in the auction. And then if they win the auction, those coins are staked, which basically means you can't use them, they're kind of locked up. And the point here is that, this is generating demand for the token, which raises the value of the token. And then on the flip side, you get rewarded in fractions of a token every time you do a search.
So the idea here, which is very common when you talk to Web3 entrepreneurs, is all about in aligning the incentives so that everybody in the network or the exchange that you're talking about, is motivated by the value of the token. And the thing that I haven't figured out yet is, is this just a Ponzi scheme or multi-level marketing? And I'm not saying that it's a conscious scam. Because a lot of these entrepreneurs and founders I'm talking to are very high minded and idealistic. But at a certain point, if the value proposition here is just coming from increasing demand for this asset over time and the value of the asset doesn't have any external referent, then there's something a little bit ponzi-ish about it. I haven't really made up my mind.
MC: What's holding the house up.
LG: Right. Or is it just false scarcity. OK, I think you've hit the right note of skepticism for us to take a break and then come back and resume that part of the conversation. So stay tuned. We'll be right back.
LG: So Web3 is really just one part of a bigger conversation that's happening right now. About what the future of the web will really look like. Some high profile technologists, yeah, we couldn't get through one week of the podcast without mentioning Mark Zuckerberg, are drawing out these visions right now, or introducing these new frameworks for the web, this next set of connected experiences. But I'm curious how realistic are these pie in the sky ideas and is it going to make the internet any more equal than it is right now? So Gilad, as you were talking to Gavin wood about Web3 and these other entrepreneurs who you've now been able to chat with, which elements of this vision struck you as legit, and which part seemed a little bit more like science fiction?
GE: So far, my feeling is that the strong version of the pitch for Web3 is that it's going to break the stranglehold, the power of the central gatekeepers, like the Googles and the Apples and the Facebooks. And I've yet to figure out why that would be true. So, so far to me, that feels like science fiction.
However, is there room for alternative businesses that maybe appeal to more technically minded audiences or user bases and can find ways to monetize through having their own tokens or coins in a none scammy way? I'm coming around to thinking that the answer to that could be, yes. I think there's something to these alternate business models, but there's more of a philosophical question, which is, will this technology really lead to more distribution of power, of wealth, of value, of creativity, or will it like just about every technological innovation in history, find a way to facilitate greater concentration and let the rich get richer and the powerful get more powerful.
And the jury is still out on that. I mean, just because you're using the blockchain doesn't mean that there's nobody with more power. There's people who hold more of the coins. There's people who manage the protocols. There's people who have power off the blockchain that they can use to influence events on the blockchain. And I don't know when we're going to find out the answers to this question. I mean, you could look at it as Bitcoin only a little more than a decade old. Think about how long it took from the invention of the internet protocols, evening the invention of email, till we got to a point where people understood how you could use it and browsers existed, that was a long time. Or you could say, Bitcoin has been around as long as the… The blockchain has been around as long as the iPhone, where's our apps?
MC: Yeah. And I'm going to back you up with that cynical worldview, because I do believe that like once a platform becomes valuable, then it's open for manipulation by capital and people who want to control it, right? And these new Web3 systems that we're talking about are going to become valuable when people actually start using them. So as the network grows and becomes more widespread, then it creates more value for all the users. And it creates more value for people who want to use it to make money. Advertisers, BCs, whatever. So you're talking about like building a new system with this new tech, and the technology is based on trust and transparency. And those things are not… Trust and transparency in a system, and that system being valuable are not mutually exclusive.
GE: Right. But I would also say just to your point about the value coming when as a network grows, this is such a point because you have to ask yourself, what's going to make the user want to… The person want to use some Web3 alternative to existing, right? Why would I sign up for a Web3-based social network, right? Why would I use a Web3-based search engine? And as-
MC: Because you believe in Web3, and you want to… You have to already be the game in order to want to play, right?
GE: Yeah. I said to Colin Pape, the founder of Preearch yesterday, I don't think that people's complaint about Google is that the ledger is too mutable.
LG: Right. You're complaining that now when they Google something, there are six ads that come at time of the feed.
GE: And to his credit, he fully acknowledge that he said, "Look for now, our target audience is definitely people who care about this. People who are more tech savvy. And over time, once they've built up the network, that's when the norm the more normal non-enthusiast people will come around. So there's like dot dot dot in between those two steps that I haven't quite figured out. But a great question to ask when someone's pitching you some Web3 alternative to an existing app or platform or network is, why are people going to want to use this? And maybe the answer as they would is, it's because of the tokens. It's because we're going to be paying you. The value incentives are all going to be aligned and everybody's going to want to join and build up the value of the token. And that's what's going to draw people in. Maybe that'll happen in some cases, but that's the right question to ask.
MC: And it might be a situation where like we're seeing with cryptocurrency now, where you have a few crypto coins that are very valuable. And then there's like a bazillion people out there who are trying to get you to buy their coin, because they want to build the value of their coin. And it's like, which one do you buy into? Do you buy into Tiddlywink, or do you buy into Ethereum or Bitcoin, or one of the ones that holds real value in The world?
GE: Totally. And if we extend that line of thinking, let's say that each of the three of us starts our own Web3 social network. And we each have this token-based business model. You could imagine the same winner take all effects that exist in Web2 you to apply to Web3, where one of our tokens is going to start to build value. That's going to be the winner. That's going to be the network everybody wants to get on. And maybe Web3 will just have the Web3 version of Facebook, the dominant social media, the dominant social network, because it might not be possible for all these different token based business models to succeed at the same time.
LG: So on the one hand here at WEIRD, we tend to be cautious optimist and keeping an eye towards the future. But I'm fascinated by these relatively new attempts by technologists to codify what's been emerging for years now, right? what's in a name? blockchain's been around forever. Forever, several years at this point. Non-fungible tokens. The idea of that is not necessarily new. The metaverse. For a while, was VR and AR. And then a few years ago it became XR. And now it's the metaverse. So like on the one hand, humans often feel the need to label or name things. So maybe that's not all that unusual. And sometimes by naming or creating structure around something, we can bring them into existence.
But I can't help, but be a little bit skeptical that by creating names around these technologies, it's basically part of a land grab for this next version of the web. And what it's going to lead to is just more capital because it enables companies to go to Sand Hill Road and their startups and say, "I'm a Web3 company, I'm a metaverse company." And we certainly see that in our inboxes here at WIRED too,
GE: Naming something is very powerful. And you're right to be skeptical. I mean, I think it's fair to say that the people who deserve the most credit or blame for popularizing the Web3 term are the venture capitalists at Andreessen Horowitz, they're crypto funds specifically. It's been reported in a lot of places that they're making a big lobbying push on Washington to make sure that regulations and laws that are passed don't imperil their crypto holdings and investments. And they're very bullish on this Web3 notion. So these are money people, right? They think that they can make money. They think there's money to be made here. But at the same time, I think that the reason that it's kind of catching on is that… And the reason that other buzzwords are kind catching on lately, like the metaverse, is that people are kind of sick of the status quo.
I think that things feel a little bit stuck right now and we're we're getting tired of using the same interfaces that are actually getting worse. Shopping for stuff on it, finding what you want on Amazon has gotten harder. Finding the right results on Google has, in many ways, gotten harder because they've rolled up so much of the economy that they don't have to try as hard to be good. And so people are kind of sick of that. And the idea of something new, a new way to interact, genuinely exciting technological development is, well, it's genuinely exciting. And when you put a name on that, it helps people imagine, it ties together things that otherwise might seem disparate and gives people something to get excited about. The question is, are we going to get something genuinely cool? Or is it just the money guys who are going to get the return on investment?
MC: Just the money guys. It's always just the money guys. Sorry.
LG: I was just going to say something eloquent, like, "Well, we probably can't answer that in this podcast," but Mike just answered it for us. So thank you, Mike.
MC: You're welcome.
LG: All right. Gilad, thank you so much for trying to unpack all of this complicated Web3 lingo. I think we're going to have to have you back on in the future to unpack it a little bit more. But let's take a break and then we're going to come back with recommendations. All right. Gilad, as our guest of honor and resident blockchain Web3 expert, what is your recommendation?
GE: OK. I've got two recommendations this week. The first one is, sticking on the blockchain theme, the book, Digital Gold, by the New York Times reporter Nathaniel Popper. I recently read and it's very good. So it was published in 2015. So it's not going to bring you up to speed. No one was talking about, well, almost no one was talking about Web3 back then. But, it's a really good introduction, very detailed history of Bitcoin and by extension blockchain. And the author is a very good, clear explainer of difficult concepts. So if anybody out there doesn't really know where to begin, I do recommend that book.
MC: Digital Gold?
GE: Digital Gold. And then my other recommendation, when perhaps I'm stealing this from one of you guys is our producer Boone Ashworth has a fantastic feature on WIRED.com right now, The Twitter Wildfire Watcher Who Tracks California's Blazes. It's really masterfully done by our friend Boone. It's about a guy who, I don't want to give too much away, but it's about the most popular and helpful Twitter account that warns people in California, when and whether to evacuate because of wildfires. And it's run by a guy all the way in New Zealand, oddly enough. And Boone just goes into a lot of fascinating detail about this man and his story and how he got into this and the nuts and bolts of how he does it and the impact that has. So highly, highly recommend that.
MC: So let me just say Gilad, you lovely bastard. You did in fact, steal my recommendation. I was going to recommend that everybody read Boone's story. Because Boone is our producer, he sits here either on Zoom or in the room with us every week and does this show. But he is also a fantastic writer, as you mentioned. And yeah, it's a lovely story. It's a feature. So it's long. And it has beautiful photographs. And it also talks about sort of the breakdown that happens when people are craving real time information and the emergency services are too busy dealing with the emergency to provide real time information and how that creates a vacuum that is filled by all of these volunteers.
GE: Yeah. There's really interesting dynamics in there. But I kind of want to pump the brakes because I'm worried that we're laying it on tooth thick at this point.
GE: Because Boone, what are we going to do if he gets too big for this podcast?
MC: I mean, he already is, but he insists on doing it. I've tried to get rid of him.
GE: Ah, I See. OK. So we're trying to inflate him so that he floats away.
MC: I think so.
MC: Anyway. Yeah, big round of applause for Boone. This is your first big feature story for WIRED after working here a couple years and writing a lot of really great stories and editing a lot of really great podcasts. But this is a big one and it's great. Everybody should read it.
GE: The Twitter Wildfire Watcher Who Tracks California's Blazes.
Boone Ashworth: Thanks guys.
MC: OK, Laura, now can you see something really mean about Boone.
GE: OK. Just to balance it out.
LG: So I was going to recommend this story that's on WIRED.com today. It's titled, The Twitter Wildfire Watcher Who Tracks California's Blazes.
GE: Never heard of it.
LG: It's by this guy named Boone Ashworth. He also happens to be our podcast producer. Am I being redundant at all?
GE: Tell me more.
MC: No, this is how the blockchain works.
LG: This is how … Oh, OK.
MC: All three of us have to have-
GE: That's very good.
LG: Are we all getting paid in tokens for this.
LG: Boonecoin. Oh my God. That's amazing.
LG: Oh, and so when people, when they ask you how much your Boonecoin is worth, they're going to say, "How much is Ash worth?"
MC: "How much is Ash worth?"
LG: Uh-huh. Or you can just call it Ashcoin because then it's like, how much is your Ash worth?
MC: How many people do you think are still listening at this point?
BA: I quit.
MC: OK. Really, what's your recommendation?
LG: OK, my recommendation this week is going to be a borrowed recommendation from another week. Mike, you had recommended Broad City a while back, and you kept telling me, you need to watch it. It's not a new show. It started in 2014. It ran through 2019. I finally started watching it. It is hilarious. Now basically in the evenings, I wonder how is too late to text Mike and say, just an FYI, I'm crying laughing right now, watching Broad City. It's so deeply weird and funny. And the two women who write the show and star in the show are so talented and I'm loving it.
MC: Well, never too late to text me. I just reserve the right to wait until 6:00 am when I wake up to respond.
LG: OK. Yeah. Pretty much. My signal last night to Mike was I wasn't that late, but I was like, oh my God, I'm at the seafood episode. Oh, it's so good.
GE: And are you, are you more of an Abbi person or an Ilana person?
LG: This is an important question. I feel like, oh God, I don't know. So I lived in New York in my 20s and I'm trying to think of like, for a long time, pretty much the whole decade. And I'm trying to think of who I was probably more like, and I was probably a little bit more of an Abbi. Yeah.
GE: Yas, queen.
LG: Yes. I too worked at a gym and aspire to be a spin instructor. No, I didn't really, but I don't know, it'd be fun to be a spin instructor.
MC: Oh my God.
GE: That's not the message of the show.
LG: No, I know. It's not at all. No, strike that. OK.
MC: It's also very rewatchable.
LG: You mean it seems that way.
MC: When you get to the end, you wait a year and then go back and re-watch it.
LG: Also, it's like many shows, a nice snapshot of our lives, pre-pandemic.
LG: They're on the subway or they're in clubs or doing whatever they're doing. And I'm like, "Oh, they end up in the hospital together one night, the seafood episode." And, and I'm like, "Oh, they're no masks. Everyone's just all crowded and on top of each other."
GE: To be fair, most television shows are like that.
LG: I know. I know.
LG: All right. I think we're going to end it. And by the way, did I mention our producer Boone wrote a great story this week on WIRED.com?
GE: What's it about?
LG: It's about wildfires
MC: And the people who tweet about them
LG: And the people who tweet about them. And one man in particular, who lives in New Zealand. You guys should really all go read.
GE: This does not ring a bell.
LG: OK. I'll send it to you.
LG: Via Slack.
GE: Put it on the blockchain, please.
LG: All right. That's our show. Gilad-
LG: Thank you. Bye. Thank you for joining us.
GE: My pleasure.
LG: Thank you, Mike as always, for being a great, co-host.
MC: Just, same to you.
LG: And thanks for recommending Broad City a while ago.
MC: You're welcome.
LG: So I could recommend it again.
MC: Glad you like it.
LG: All right. Thanks to all of you for listening. If you have feedback, you can find all of us on Twitter, just check the show notes. Also, you can leave us a review in Apple Podcast. I love reading this. This show is produced by this guy named Boone Ashworth, who also wrote a story on wire.com this week.
GE: Oh my God. Did he?
LG: He did. Goodbye.
BA: You guys are lunatics.
GE: Welcome to the Booniverse!
[Gadget Lab outro theme music plays.]
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