Jack Dorsey and Marc Andreessen’s Crypto Feud Puts Web3 at Risk


  • Jack Dorsey and Marc Andreessen’s Crypto Feud Puts Web3 at Risk - The New York Times

    “You don’t own ‘web3.’ The VCs and their LPs do.”

    Jack Dorsey tweeted this esoteric salvo in late December, not long after he stepped down as the head of Twitter to focus on advancing his Bitcoin ambitions. The post, swiping at the power held by venture capitalists and their limited partners as they try to reorganize the internet around blockchain technology, an effort known as web3, soon set off a public feud among members of the Silicon Valley ruling class. The dispute over what many herald as the next arena of technological revolution has drawn increasingly hard lines. Elon Musk is with Mr. Dorsey; Marc Andreessen is his enemy.

    The web3 revolution, backers say, promises the democratization of commerce and information by building a better internet on blockchain networks — distributed ledger systems that form the basis of Bitcoin and other cryptocurrencies. It theoretically would cut out traditional middlemen and gatekeepers, letting users transact directly and have a greater stake in the programs they use.

    But Mr. Dorsey has a different view. “It will never escape their incentives,” continued his post about the role of venture capitalists in web3. “It’s ultimately a centralized entity with a different label.”

    Tokenisation de l’internet

    Essentially, web3 refers to an internet operating on so-called tokenomics. Tokens are digital units of cryptocurrency, and in web3, developers and users have mutual financial interests and everyone can earn crypto. Users benefit directly from their contributions — creativity, play, engagement or deposits, say. They can also help govern futuristic community-run companies, where they can vote on decisions with tokens created by the particular project.

    Yet big investors also appear attracted to the infinite frontier. Last year, venture capitalists backed about 460 blockchain projects, spending nearly $12.75 billion, up from 155 deals worth $2.75 billion in 2020, per Pitchbook data provided to The New York Times. And the venture arms of crypto exchanges like Coinbase and FTX are some of the biggest deal makers, compounding concerns about corporate concentration. That means major players increasingly control the decentralized entities said to democratize everything for little guys.

    “While cryptocurrency industry insiders promote the ‘democratized’ benefits of digital assets,” Ms. Goldstein testified, “in truth, crypto concentrations of money and power match or surpass those in traditional financial markets.”

    Proponents across the web3 ideological divide have been working to woo lawmakers. Venture capitalists are pushing policy proposals meant to influence officials to embrace web3. Believers in the revolution, like Mr. Selkis of Messari, have compiled lists of politicians to support. But the movement still appears to lack a unified front.

    The debate that Mr. Dorsey sparked last month has continued online, though it appears he has begun to direct his attention elsewhere. On Thursday, he started a Bitcoin legal defense fund for developers who face “legal headaches,” and he said Block would get involved with mining Bitcoin.

    Andreessen Horowitz’s policy team has been looking beyond Washington, publishing proposals for global leaders on how to become “web3 republics.”

    Crypto, however, is not the only issue on every tech billionaire’s mind.

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