If today's tech billionaires look scary, just wait for tomorrow's crypto-enriched masters of the universe.

Iain Morris, International Editor

April 7, 2022

6 Min Read
Dorsey's Internet is better than the anarchy of tomorrow's Web3

Quintessential hipster billionaire Jack Dorsey has been lamenting his role in "centralizing" the Internet.

In a tweet this month, Twitter's founder wrote that "the days of usenet, irc, the web … even email (w PGP) … were amazing. Centralizing discovery and identity into corporations really damaged the Internet. I realize I'm partly to blame, and regret it."

It's like hearing Lenin express regret over his part in the Russian Revolution (although Dorsey seems to model his looks on Rasputin). Sorrowful as he sounds, Dorsey probably isn't about to relinquish his 2% stake in the centralized social media company he started, currently worth more than $800 million.

According to the Bloomberg Billionaires Index, his net worth is about $8.25 billion, although other sites have it as high as $12.5 billion. Internet centralization has done for Dorsey what Marxist opportunism did for certain political careers in WWI-era Moscow.

Dorsey has no apparent fix, either. He and billionaire chum Elon Musk have been scathing about Web3, a term apparently conceived by Gavin Wood of Ethereum cryptocurrency fame to describe a decentralized Internet built on blockchain principles.

Blockchain, to delve even more deeply into the latest buzzwords, is basically synonymous with decentralization. It replaces one central repository of data with a distributed ledger that replicates and updates information in numerous places. Part of the appeal is that nobody (supposedly) has ultimate control. Decentralization, in other words, equals democratization.

But this is not how Dorsey perceived Web3 as recently as December.

"You don't own Web3," he wrote on Twitter back then. "The VCs [venture capitalists] and their LPs [limited partners] do. It will never escape their incentives."

Musk chimed in by suggesting Web3 was nothing but hype. Yet Dorsey's Twitter handle, besides describing him as a "romantic moron" and "1/8th hippie," includes a reference to "#bitcoin," the cryptocurrency that is the best-known example of a blockchain and, by implication, Web3. He is a major cryptocurrency investor, say reports.

Beggars can't be cashless

His skepticism is warranted, though. Crypto today doesn't sound very democratizing outside El Salvador, which adopted bitcoin as legal currency in September 2021.

Since then, El Salvadoreans using it to buy fruit and veg have had a lurching ride while freed from the tyranny of central banks, with bitcoin losing a third of its market value since November.

Meanwhile, tightly regulated physical money, which can be lost or stolen but never hacked, is being rejected by retailers that went cashless amid COVID-19, even though notes and pennies still qualify as legal tender. The homeless suddenly need card readers just to eat.

Nobody who is not an Internet billionaire thinks of crypto as a great decentralizing/democratizing force. Most people outside El Salvador don't think about it at all, which tells you a lot.

Arguably, it has made the wealth gap more apparent, spawning the crypto billionaire, the bounty hunter of today's Wild West web, just as everyman faces rising costs and miserable wages.

Changpeng Zhao, the CEO of crypto exchange Binance, was this week reported to be the world's wealthiest crypto billionaire, with a personal fortune of $65 billion. Binance, incidentally, is registered in the Cayman Islands and said to have been in trouble with various national authorities for operating without permission.

Figure 1: Bitcoin rollercoaster (bitcoin to US dollar) (Source: Google Finance) (Source: Google Finance)

Web3 has reached telecom, too. Currently, the standout example is Helium, a self-styled "people's network" named after a gas that fills party balloons and makes anyone who inhales it sound like Alvin and the chipmunks.

Despite the blurb, figuring out what Helium does is like trying to crack the Enigma code without the help of Alan Turing.

"Inspired by traction and excitement around Bitcoin, Ethereum and other projects at the time, we embarked on a bold journey to build a decentralized wireless network powered by crypto," wrote Amir Haleem, Helium's CEO, in a recent blog.

Helium hotspot hosts (and there are currently more than 682,000 hotspots) are rewarded in crypto payments for sharing their bit of the network.

But the underlying business model is opaque (to this correspondent, at least), and Helium has been criticized as a scam and even a Ponzi scheme elsewhere on the Internet.

It achieved unicorn status (a valuation of at least $1 billion) last month when investors pumped another $200 million into the balloon. They include the democratizing likes of Andreessen Horowitz, Google Ventures and Ribbit Capital.

The new Wild West

The Internet's main problem is not centralization per se but that its big players, of which Twitter is hardly the prime example, have been loosely regulated and democratically unaccountable.

The whole kerfuffle about Internet freedom of speech has happened partly because platforms whose audience numbers run into billions are censored by unelected 1 percenters like Facebook CEO Mark Zuckerberg. Anyone speculating COVID-19 leaked from a Wuhan lab would previously have been gagged by Facebook like a dissident in Iran.

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At the same time, Internet firms were able to build unprecedented market power, as watchdogs stood by slack-jawed like feeble town sheriffs.

Today, Amazon, Facebook, Google and Microsoft are collectively worth nearly $6.3 trillion. For context, the entire Nasdaq carries a market capitalization of about $30 trillion.

Web3 and blockchain won't alter any of this, even if they do hold technical appeal as a way of building more secure and resilient networks.

Without oversight, they are likelier to produce a second wave of Dorseys and Zuckerbergs, putting currency along with speech and other matters outside the purview of institutions answerable to the public.

Extreme decentralization minus that kind of authority is just anarchy, a free-for-all where the strong prey on the weak. There is a reason it has never caught on.

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— Iain Morris, International Editor, Light Reading

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About the Author(s)

Iain Morris

International Editor, Light Reading

Iain Morris joined Light Reading as News Editor at the start of 2015 -- and we mean, right at the start. His friends and family were still singing Auld Lang Syne as Iain started sourcing New Year's Eve UK mobile network congestion statistics. Prior to boosting Light Reading's UK-based editorial team numbers (he is based in London, south of the river), Iain was a successful freelance writer and editor who had been covering the telecoms sector for the past 15 years. His work has appeared in publications including The Economist (classy!) and The Observer, besides a variety of trade and business journals. He was previously the lead telecoms analyst for the Economist Intelligence Unit, and before that worked as a features editor at Telecommunications magazine. Iain started out in telecoms as an editor at consulting and market-research company Analysys (now Analysys Mason).

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