London Daily

Focus on the big picture.
Tuesday, Aug 12, 2025

What should we really expect from Web3, DeFi, and the future of the internet?

What should we really expect from Web3, DeFi, and the future of the internet?

The gist is familiar from revolutionary statements throughout history. Wrest power from the establishment, return it to the people, make everyone happier and richer along the way.

Take a moment and think of everything wrong with the online world, from data breaches to violations of privacy to the overweening power of big tech.

Then imagine them disappearing. Gone. Just like that.

Sounds appealing? Well, you've just heard the first line of a sales pitch-cum-revolutionary manifesto that's gaining traction in San Francisco and Washington DC. It goes by the name of web3.

The gist is familiar from revolutionary statements throughout history. Wrest power from the establishment, return it to the people, make everyone happier and richer along the way.

The tools we're told can achieve this are as modern as it gets. The heart of the plan is to rebuild the foundations of the web using the blockchain technology that underpins cryptocurrencies such as Bitcoin.

According to Web3's backers, it is possible to take anything - or, indeed, everything - that is online and put it on the blockchain, the energy-intensive ledger which enables data to be stored collectively without the need for a central record-keeper.

Do this, the theory goes, and you wouldn't just give everyone back their data, you would give them their freedom.

Instead of Facebook or Google owning all our photos, posts and likes and deciding how we get to use or access them, we would own our own information and have a say in how it's used.

That's not just because we would be able to remove our data securely and easily in a digital wallet, but also because the mechanics of the blockchain enable new forms of coordination.

Anyone who uses an internet service can be given a token granting them rights to control how the service is used. Because the token is digital, its rules can be encoded into it - and because the blockchain can't be altered by a central power, those rules are permanent until and unless every token holder agrees they should be changed.

Imagine a world in which WhatsApp and TikTok were more like John Lewis or the trade union Unite, organisations in which the members have a say, potentially even to the point of sharing some of those vast profits.

If you're a blockchain true believer, that is just the start. The term Web3 refers to the third generation of the web, after the static "read-only" Web 1.0 and the read-and-write Web 2.0 exemplified by social media, but as so much of life is online now, it's possible to imagine it revolutionising nearly anything. Why shouldn't local governments be democratised in the same way? Or art? Or banking?

If you are starting to raise an eyebrow at this point, you are not alone. Even if you suspend disbelief and accept that such a grand project can be built on the same rickety blockchain technology which couldn't process a bitcoin transaction this time last year in less than seven hours, there are plenty of reasons to be suspicious.

Many observers have pointed out that this supposed revolution is being pushed by one of the biggest venture capital firms in Silicon Valley, with vocal support from executives at Meta.

That's right: the bonfire of big tech is being hailed by the company formerly known as Facebook. Hardly a precursor of radical reform.

Executives at Meta are big supporters of Web3


Revolutionaries have always been accused of hypocrisy, so this is not necessarily an objection in its own right, but it is worth bearing in mind when it turns out that Web3 is already failing to live up to its promises.

For all the talk of decentralisation, much of the emerging technical infrastructure of Web3 is in fact as centralised as its predecessor. It turns out that even when it's theoretically possible to give everyone a stake or say, it's practically simpler to leave it up to a small group.

None of this will come as a surprise to anyone familiar with online history. Twenty years ago the model for the exciting new web was Wikipedia, the first encyclopaedia written by the crowd. Many people confidently predicted that Web 2.0 would be built in Wikipedia's image. Instead, as the years passed, it turned out to be the exception rather than the rule.

Arguably even Wikipedia is effectively centralised, as it relies on a small group of volunteers to keep its articles up-to-date and free from argument. Nor, for all its brilliance, is it as perfectly reliable as we need something like legislation or finance to be.

Perhaps blockchain technology will change this by adding money to the mix, making it possible for contributors or volunteers to be paid for their work. (Although incentivising Wikipedia contributors to make changes to articles would bring its own set of problems.) But it will not be easy.

Even at this early stage, Web3 companies are encountering the kind of challenges all too familiar from the old world of social media. One of the most popular platforms for NFT art, OpenSea, is currently wrestling with the related problems of plagiarism and spam.

Normally those issues are dealt with by a central authority, but that's not very democratic, at least not in the way that web3 fans define democracy. So what should OpenSea do? Stay "free" or allow rampant plagiarism?

That's a simple question compared to the conundrums faced by a social network such as Facebook. Imagine a web3-style "vote" on whether to take down the livestream of a mass shooter playing out while the shooting is taking place. The mind boggles - and not in a good way.

Of course, many of the people rushing headlong towards web3 aren't interested in these debates. They're there for the novelty, the social cache, and also - of course - the money.

In the end, so much of web3 comes back to money. From its roots in bitcoin to the current hype over NFTs, it has been marked by a desire for cold hard (digital) cash. Even its most interesting innovation, the decentralised autonomous organisation, or DAO, is first and foremost a way of raising funds.

Being concerned with money isn't necessarily a bad thing. The open source movement behind Web 2.0 disdained questions about how exactly anyone would get paid, as did many of the contributors to the early 2000s blogosphere, then ran into financial difficulties while others got rich from their work. Money matters. But the way it matters to web3 means that most of its immediate impacts are likely to be in the area of online finance.

In that sense, web3 is the high-tech equivalent of the "big bang" of the 1980s, during which nationalised industries were sold on newly deregulated financial markets.

Back then, boosters sold the dream of a new "shareholder democracy", where ordinary citizens would influence the behaviour of the most powerful corporations in the world.

Looking back, that seems wildly optimistic - but the big bang did change history. It brought in a new class of freshly-minted millionaires, a wild up-and-down boom, and, most enduringly, a new economy built on ever more complicated forms of finance.

If it comes to pass, web3 is much more likely to be a financialised internet than a democratised one. That means more scams, more rags-to-riches stories and more volatility. Get ready, it's going to be wild.

Newsletter

Related Articles

0:00
0:00
Close
Instagram Released a New Feature – and Sent Users Into a Panic
China Accuses: Nvidia Chips Are U.S. Espionage Tools
Mercedes’ CEO Is Killing Germany’s Auto Legacy
Trump Proposes Land Concessions to End Ukraine War
New Road Safety Measures Proposed in the UK: Focus on Eye Tests and Stricter Drink-Driving Limits
Viktor Orbán Criticizes EU's Financial Support for Ukraine Amid Economic Concerns
South Korea's Military Shrinks by 20% Amid Declining Birthrate
US Postal Service Targets Unregulated Vape Distributors in Crackdown
Duluth International Airport Running on Tech Older Than Your Grandmother's Vinyl Player
RFK Jr. Announces HHS Investigation into Big Pharma Incentives to Doctors
Australia to Recognize the State of Palestine at UN Assembly
The Collapse of the Programmer Dream: AI Experts Now the Real High-Earners
Security flaws in a carmaker’s web portal let one hacker remotely unlock cars from anywhere
Street justice isn’t pretty but how else do you deal with this kind of insanity? Sometimes someone needs to standup and say something
Armenia and Azerbaijan sign U.S.-brokered accord at White House outlining transit link via southern Armenia
Barcelona Resolves Captaincy Issue with Marc-André ter Stegen
US Justice Department Seeks Release of Epstein and Maxwell Grand Jury Exhibits Amid Legal and Victim Challenges
Trump Urges Intel CEO Lip-Bu Tan to Resign Over Alleged Chinese Business Ties
Scotland’s First Minister Meets Trump Amid Visit Highlighting Whisky Tariffs, Gaza Crisis and Heritage Links
Trump Administration Increases Reward for Arrest of Venezuelan President Maduro to Fifty Million Dollars
Armenia and Azerbaijan to Sign US-Brokered Framework Agreement for Nakhchivan Corridor
British Labour Government Utilizes Counter-Terrorism Tools for Social Media Monitoring Against Legitimate Critics
OpenAI Launches GPT‑5, Its Most Advanced AI Model Yet
Embarrassment in Britain: Homelessness Minister Evicted Tenants and Forced to Resign
President Trump nominated Stephen Miran, his top economic adviser and a critic of the Federal Reserve, to temporarily fill an open Fed seat
The AI-Powered Education Revolution: Market Potential and Transformative Impact
Chikungunya Virus Outbreak in Southern China: Over 7,000 Hospitalized
French wine makers have seen catastrophic damage to vines that were almost ready to be harvested after the worst fires in more than 70 years burned through the south of the country
US Lawmaker Probes Intel CEO’s China Ties Amid National Security Concerns
Brazilian President Lula says he’ll contact the leaders of BRICS states to propose a unified response to U.S. tariffs
Trump Open to Meeting Putin as Soon as Next Week, with Possible Trilateral Summit Including Zelenskiy
Katy Perry and Justin Trudeau spark dating rumors, joining high stakes world of celeb-politician romances
US envoy Steve Witkoff arrived in Moscow to seek a breakthrough in the Ukraine war ahead of President Trump’s peace deadline
WhatsApp Deletes 6.8 Million Scam Accounts Amid Rising Global Fraud
Nine people have been hospitalized and dozens of salmonella cases have been reported after an outbreak of infections linked to certain brands of pistachios and pistachio-containing products, according to the Public Health Agency of Canada
Karol Nawrocki Inaugurated as Poland’s President, Setting Stage for Clash with Tusk Government
Trump Signals JD Vance as ‘Most Likely’ MAGA Successor for 2028
US Charges Two Chinese Nationals for Illegal Nvidia AI Chip Exports
Texas Residents Face Water Restrictions While AI Data Centers Consume Millions of Gallons
U.S. Tariff Policy Triggers Market Volatility Amid Growing Global Trade Tensions
Tariffs, AI, and the Shifting U.S. Macro Landscape: Navigating a New Economic Regime
Representative Greene Urges H-1B Visa Cuts Amid U.S.-India Trade Tensions
U.S. House Committee Subpoenas Clintons and Senior Officials in Epstein Investigation
Sydney Sweeney Registered as Republican as Controversial American Eagle Ad Sparks Debate
Trump Accuses Major Banks of Politically Motivated Account Denials and Prepares Executive Order
TikTok Removes Huda Kattan Video Over Anti-Israel Conspiracy Claims
Trump Threatens Tariffs on India Over Russian Oil Imports
German Finance Minister Criticizes Trump’s Attacks on Institutions
U.S. Proposes Visa Bond of Up to $15,000 for Some Applicants
U.S. Farmers Increase Lobbying Amid Immigration Crackdown
×