Web 3.0 died last week


The promise of Web 3.0 was decentralization. The idea was to take power away from banks and big tech and put it on the blockchain, tokenize it or let people control it themselves in some other way — a more democratic internet.

It was a powerful idea that attracted hundreds of billions of dollars in investment. The results so far have been far from furious. Crypto’s use cases have been limited, NFTs are a joke and scams are rampant.

The Web 3.0 hype along with ultra-low interest rates triggered a Web 1.0-style semicolon bubble. For months, every press release related to blockchain, crypto, or some other kind of revolutionary way of doing things that aren’t particularly hard to do today.

Two main channels for the flow of money from investors into Web 3.0 were Silvergate Bank for crypto and Silicon Valley Bank for tech startups. Both banks failed this week and I can’t help but think of that as the tombstone for an era.

That certainly doesn’t mean the end of crypto, defi, or tech venture capital, but it’s a sign of which way the wind is blowing. These are all expensive projects and the money is gone. It took a decade for technology to recover from the point combustion and this will be no different.

That doesn’t mean bitcoin prices will crash. Bitcoin has separated itself from many of the carpet pullers and scams. It was volatile but functional but beyond that it’s a short list. Who would want to invest in a space where money doesn’t flow and regulators are tight fisted.

In technology, it is now widely recognized as a bubble and venture capital investors no longer have a flight into capital markets. Moreover, cheap loan accounts are made. The failure of Silicon Valley Bank will mean that companies cannot make a payroll text week and, presumably, will lay off workers soon. There were $200 billion in deposits and only accounts up to $250,000 were insured. In the company’s last 10K it said uninsured deposits were $151.5 billion. Much — hopefully all — of that money will be recovered but it will take time to sell the corresponding assets.

It is the kind of disorder that will slowly starve the industry of capital.

In short, we all knew there were bubbles in crypto and tech venture capital. The poetry of the two flagship banks in those areas failing in the same week

From the ashes

The good news is that Web 4.0 is already here.

Artificial intelligence captures imaginations and delivers incredible results. Much of the remaining money in Web 3.0 is quickly turning to AI and while some of that is the usual topic-hunting, there will be results.

It’s also a good thing because this is a lifeline for technology more broadly and will transform the world before the decade is over.



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