Our lifetime is at a critical moment in the trajectory of life on Earth. We face a nexus of fold points where what happens in the next few years will literally determine the state of the system for millions of years. Climate is the huge driver and biodiversity is the measure of the outcome. There are other critical problems as well, all entirely of our own making, as everything from AI to nanotechnology could veer off into dystopian paths, with or without totalitarian control.
Despite the legitimate fears, we remain at a superposition state, where the future has not yet collapsed into the formality of actually occurring. A far more positive path remains possible however unlikely in most of our minds.
All of it hangs on our capacity to see, understand, and communicate more clearly. The greatest obstacle often appears to be game rules. The system of resource allocation and distribution we call money limits and determines what we do.
The intersection of information technology and money has given rise to blockchain, or perhaps more accurately, cryptocurrency on distributed ledgers. There has been an almost religious fervor to some aspects of the sincere wish for a decentralized solution to the challenges of money, as well as governance and even climate.
Indeed, if we are to find our way to a future we might want, there is a strong intuition that the internet and now decentralized technology must be the key to it.
However, the current generation of blockchain technology, recently rebranded as web3, still rests on a set of assumptions that may turn out to be a steppingstone to a more functional set of solutions.
Nature has always optimized the thermodynamic efficiency of life. Science has shown us in detail how elegantly living system are optimized to extract the maximum benefit from the available sunlight, water, and minerals.
Technology will ultimately follow the same path. Renewable energy and every aspect of human systems are being reshaped by the recognition of the need for optimization and efficiency.
Seen through this lens, current blockchain technology may turn out to look a bit like the epicycles used to predict planetary motion prior to the Copernican revolution. While some tokenomics models resemble a Rube Goldberg cartoon where unbelievable levels of very imaginative and cleaver contraptions are assembled to solve otherwise simple problems.
There is no question that the technological components used in web3 are the future of the internet. The cryptographic keys and hashes that gave “crypto” its name are so powerful and foundational that they will be the basis for information technology. Decentralized ledgers are also incredibly powerful and useful in many different combinations.
However, attempting to erect an edifice representing the entire basis for the web on top of a blockchain using global consensus just does not make any sense.
The energy waste involved in proof-of-work has been described so many times it is not worth repeating. Bitcoin is the crypto equivalent of coal. Both simply need to end. Once we have sufficient solar capacity to fulfill all current human energy needs we will still need a vast amount of energy to remove carbon from the atmosphere. Proof-of-waste is a thermodynamically bankrupt idea that we can not afford.
However, that issue aside, there are other problems with a global consensus blockchain that makes it ill-suited to form the technological basis for the internet. Requiring that an entire system agree on state through redundant activity is a source of tremendous overhead and complexity. That may be justified for certain types of financial activity, but there is no version of reality where it forms a sensible platform to use as the basis of all other information exchange on the internet.
The whole metaphor of holding keys in a wallet also creates a situation where people literally need to hang onto their wallet in order to interact on web3. After many years and billions of dollars this may be one reason why the system has not taken off. It is possible, given enough thrust, for pigs to fly, but it will not end well.
There is an alternative. The decentralized network we need to represent society needs to represent society. In other words, the individuals, organizations, and groups that make up real networks of social, commercial and governance activity need to be reflected in the structure of the network. The nodes in the technological information network need to map to and represent the actual parties in society.
Then the activity between these nodes needs to represent communication, identity, decision making and other human activity, where value exchange is one component of that activity, but the design of the system does not attempt to tokenize and therefor monetize every aspect of life.
This is possible and indeed relatively straight forward using the same cryptographic primitives that are the basis of web3 now in new and appropriate ways to solve real world problems related to data exchange, identity and even carbon accounting. In retrospect much of this will be recognized as the natural evolution of the path that much of web3 is already on right now as Ethereum has shifted to proof-of-stake.