Web3 and the Trap of ‘For Good’

Article by By Scott Smith & Lina Srivastava : “There are three linked challenges baked into Web3 that any proponent of positive social impact must solve.

1. Decentralized tech doesn’t equal distributed power. Web3 has become synonymous with the decentralized web, and one of the selling points of Web3 technologies is decentralization or shared ownership of web infrastructure. But in reality, ownership is too often centralized by and for those with resources already, the wealthy (even if only coin-wealthy) and corporations.

As the example of NFT marketplace OpenSea demonstrates, risks are too easily distributed onto the users, even as the gains remain very much centralized for platform owners and a small minority of participants. Even Ethereum co-creator Vitalik Buterin has issued warnings about power concentration in Web3 token-based economies, saying crypto “whales” can have too much power in these economies. Systems become inherently extractive unless ownership is shared and distributed by a majority, particularly by those who are traditionally most vulnerable to exploitation.

For this reason, equitable power structures must be proactively designed in Web3 systems.

2. A significant percentage of existing power holders are already building their Web3 business models on exploitation and extraction. At present, these business models mine energy and other resources to the detriment of our climate and environment and of energy-poor communities, in some cases actively resuscitating wasteful or harmful power projects. They do so without addressing these concerns in their core business model (or even by creating offsets, a less desirable alternative but still better than nothing).

These models are meant to avoid accountability to platform users or vulnerable communities in either economic or environmental terms. But they nevertheless ask for our trust?

3. Building community trust takes more than decentralization. Those who are building over distributed technologies often claim it as a solution to a trust deficit, that “trust” is inherent to the systems. Except that it isn’t…(More)”