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The chicken and egg question applies far beyond poultry, to include the relationship between a society and the technology it produces. Or is it vice versa? One could ask, is society a product of the very technology it comes in touch with every day?
Just as wheels and steam engines changed how people move, which had a profound impact on entire economies and the global intercultural exchange, the internet and apps now determine the way we do a myriad of other things, thus also determining our culture and history. The idea in play here is aptly named “technological determinism,” and it has been very much present in some of the recent debates around Web3 and blockchain.
The pendulum swings
Web3, a more decentralized internet with user-owned data and digital assets, is what most in the blockchain space aspire to. In a few ways, it is still an idea at this stage — and some think this idea has grown outdated before even coming to fruition. Enter Web5, the project of Twitter’s former CEO Jack Dorsey, an idea so forward-looking that it skips Web4 on its path.
Dorsey has long despised the direction the Web3 industry is taking, once famously declaring that this new-generation network will be pretty much like Web2, but with VC funds at the rudder. While the industry indeed isn’t perfect — nothing is, let’s be honest — such a take might prompt the more spiteful to question whether Web5 would then be Web3 with the VCs overthrown by Dorsey.
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In essence, both of these questions also betray a certain kind of determinism. In asserting that “you won’t own Web3,” Dorsey assumes that today’s societal, political and economic relationships will determine our future technology. The same applies to a similar question about Web5, as it relies on the same intellectual foundation.
Blockchain is a curious case study from the determinist perspective, especially when you look at its origins. While a lot of its underlying concepts and algorithms date back to the previous century, the work spearheading its use for trustless peer-to-peer exchanges of value — Satoshi Nakamoto’s famous Bitcoin whitepaper — came out in late 2008, at a time of upheaval in the financial world. The zeitgeist exposed the many flaws of the financial system as it was back then; it was the cause, and Bitcoin was the effect, born out of the socioeconomic state of the world.
Now that the jack is out of the box, the pendulum swings back. Once a product of a society in search of a more effective financial system, cryptocurrencies are now having their own impact on the society as their adoption and popularity grow. And while this process may indeed lend itself to a determinist review, the prism of today may not be best-suited for looking into tomorrow.
Blockchain is what you make of it
At its core, blockchain is a permissionless, peer-to-peer technology running on community support and participation. As such, it defies pessimism through its sheer design: There are no kings in a peer-to-peer network, only early investors picking up the plentiful gains the same way they would with any other industry or individual company that shoots for the sky. Despite being more centralized now that it was at its inception, Bitcoin still has no central bank or authority. Its unintended centralization is a natural to any moving system, and its rules of the game are laid out in its protocol, enabling anyone who thinks they can do better to fork it and take their fair stab at it.
There are other ways that blockchain could drive our society in terms of our larger governance and other frameworks. The blockchain space lives and breathes the community spirit, with individual builders and enthusiasts rallying around the projects and causes they like. This may point to a gradual, larger societal transition to decentralization, with local communities gaining more autonomy in the face of centralized powers.
By the same account, the rise of DAOs hints at the way we could be doing business in the future. We will scrap the traditional management verticals and revenue distribution models in favor of a system where every project participant has a stake and a say in it and enjoys more individual ownership.
That said, the same way automation’s impact on the job market depends on the way companies implement it, blockchain’s societal impact will depend on more than the technology itself. As we know from TradFi, money loves company, and this law of gravity is already very much present in the crypto space, from the outsized impact that whales have on market fluctuations to the creeping centralization of Bitcoin mining.
Pitfalls, present and future
In some ways, with its code-is-law maxim, the blockchain space runs as codified, executable capitalism, and for all the good it can do, there are pitfalls for the community to be wary of. Take the tale of the BadgerDAO hack, where a malicious actor used a flash loan to hijack the governance mechanism and scoop out the project’s treasury.
Imagine a real election being hijacked this way, not even necessarily via a loan, but through the sheer financial muscle of an old-era whale; or a corporation buying out the governance in a DAO that’s tasked with keeping terrorist communications off the web to silence its rivals. Something similar may or may not be happening in the Web2 space already, and blockchain could just set up a more convenient framework for that.
Through its design and its underlying values, blockchain has the capability to fundamentally transform our society for the better, giving more ownership and autonomy to everyday people at the expense of centralized powers. As we work toward that, though, whatever the number after “Web” is, it’s important to not allow the flaws of today’s financial, socioeconomic, political and other systems to move into the new one.
Leonard Dorlöchter is an entrepreneur who co-founded peaq