Suddenly, the term Web3 seems to be everywhere. Everyone from Web2 guru Tim O’ Reilly to Goldman Sachs seems to have developed an opinion on it this week. Cue the features from the big publications: Bloomberg has an explainer, the New York Times tries to demystify it, and the Wall Street Journal brought out a splashy piece highlighting its major players.
For a while now, one of the chief amplifiers of the term Web3 is Chris Dixon, who leads Andreessen Horowitz’s multi-billion dollar crypto fund. His prognostications on the future of the internet often take the form of punchy Twitter threads, laying out why, inevitably, Web3 is the solution to the current, broken, internet we inhabit.
With all the attention around Web3 lately, you’d think Dixon could tweet no wrong. Yet that’s exactly what happened Wednesday, when one of Dixon’s routine lofty Web3 boosting aphorisms attracted a snarky reply from Jack Dorsey, the Twitter co-founder and its former chief. “You’re a fund determined to be a media empire that can’t be ignored… not Gandhi” Dorsey spat out. (Dixon’s tweet used a rallying cry that’s often misattributed to the leader of India’s independence movement.)
Before long, former a16z partner and general crypto gadfly Balaji Srinivasan was involved, Marc Andreessen had blocked Dorsey on Twitter, and Elon Musk was chiming in with some snark of his own.Professional decorum was dropped, and the titans of Web3 and Silicon Valley were squabbling in public.
So, what’s behind all the fighting? That Wall Street Journal feature framed Dorsey and others, including Andreessen Horowitz, as the leaders of the Web3 movement, a band of revolutionaries striving together to remake the internet. But in reality, the growing popularity of the term Web3 papers over a schism that has deepened among cryptocurrency enthusiasts over the years.
The tension that Web3 conceals is the fact that not everyone has agreed to be lumped into that umbrella term and not all crypto evangelists have the same vision for the future. I’ve delved into the effects and origins of that schism before, by speaking to University College Dublin lecturer Paul Dylan-Ennis about his research.
In particular, Bitcoin maximalists—people who believe that Bitcoin is the only true cryptocurrency—chafe at being bundled together with people who promote Ethereum, Solana, or any of the other blockchains out there that are gaining steam.
Dorsey, despite what the Wall Street Journal story says, is not a Web3 believer. Dorsey is a BItcoin maximalist. His belief in the orange coin is well documented: his work with Square has seen the creation of two Bitcoin-focused units; he has said Bitcoin is the most important work of his life; and he thinks it will replace the U.S. dollar.
But the rise of Web3as a buzzword meant that, to anyone who isn’t waist-deep in crypto-land, Dorsey’s interest in Bitcoin and the growing chorus of Web3 boosters must be part of the same trend. After all, aren’t both camps interested in using blockchains, cryptocurrencies and breaking the grip of the internet giants?
The key point of contention, in the eyes of Dorsey and other Bitcoin maximalists, is around who profits from a particular blockchain. Dorsey tweeted as much, claiming that users don’t own Web3, but venture capitalists and their investors do. (The Business of Business has tried to follow the money when it comes to DAOs, too.) This is in opposition to the central claim of Web3 supporters, who say that precisely because users can own the platforms on Web3, they’re better than their predecessors.
Dorsey’s concerns about who owns what in Web3 can be traced back to the Bitcoin maximalist understanding of other blockchains. In their telling, other chains are irredeemable because they issue tokens that surge in value while reserving some for a founding team or early investors. The best example of this, in the maxi worldview, is Ethereum, which conducted a token sale, but also allocated tokens in a “pre-mine” for early contributors. The pre-mine, which is a reference to an allotment of tokens before mining commenced on the chain, allowed insiders to buy in at lower prices.
These dynamics render Ethereum a “scam” in the eyes of maximalists, and the same logic is applied to all blockchains that came after Bitcoin. By contrast, bitcoin’s creators never reserved a portion of Bitcoin’s supply for themselves, and never sold tokens to raise funding for the project (although it is likely they were the only ones mining the cryptocurrency for a period of time when the network launched, leading to the accumulation of a large stockpile of coins). This “immaculate conception” of Bitcoin makes it the superior cryptocurrency, the maximalists believe.
Dylan-Ennis of University College Dublin has described how the different monetary designs of Bitcoin and Ethereum have led to the creation of distinct “cryptocultures.” Whereas Bitcoin fosters a culture of “monetary minimalism” where human intervention is avoided where possible, Ethereum has incubated “monetary minarchism,” where the tool, the Ether token, is subordinated to the goals of the users of Ethereum. These divergent cultures lead to the sorts of reactions we’ve seen from Dorsey and others this week.
If the idea of Web3 continues to catch on, the battle between Bitcoin maximalists and, well, almost everyone else in crypto and beyond, will continue to intensify. Just as Bitcoin believers rejected the label “crypto” for themselves, so they will continue to reject “Web3.”
For the rest of us, at least it’s made one thing clear: the battle lines have been drawn publicly, for once, between the outwardly cordial titans of Silicon Valley, and both Web2 and Web3.
