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3 Reasons Web3 is Doomed to Fail

No emerging technology ever comes to the market fully formed and ready to be used out of the box.


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Alexander Honcharenko

4 months ago | 7 min read
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Barriers to the Mainstream Adoption of Blockchain Technologies

Technological innovation is pretty neat.

It has given us all the lovely gizmos and gadgets we use on a daily basis, and has exponentially improved both productivity and quality of life for billions of people worldwide.

I mean, why do your laundry by hand when you have access to a washing machine? Why cook your daily meals over a fire when there is a fully-functional kitchen available? Why walk to your far-off destination, when your trusty Model-T Ford can get you there in a fraction of the time?

If only things were so simple.

While somewhat more convenient, the first washing machines resembled a Rube Goldberg contraption more than anything else, and were not exactly the most… user-friendly of devices.

The first ever gas stoves, while making cooking more productive, were often fire hazards to the home. It took about 3 decades from their first debut to reach even a small portion of the mainstream public.

And the Model-T Ford… ah yes.

No seatbelts, a rickety chassis, and brakes that ran on hopes and prayers… the first ever mass-produced vehicle was indeed a technological wonder. But despite the many added benefits, many also asked themselves if the car created more problems than it solved.

It is said that there are only two certainties in life: death, and taxes.

Well to all those working with any kind of tech-driven innovation, I would like to propose a third:

No emerging technology ever comes to the market fully formed and ready to be used out of the box.

That being said, I would like to point out some of the most critical flaws inherent to a very exciting vertical of networked technology — the blockchain, cryptocurrencies, and the world of decentralized finance (DeFi) and decentralized applications (dApps).

My thoughts and reasoning below come from almost a decade spent in digital analytics, online advertising, and B2B digital product creation.

I look forward to all forms of feedback from those more knowledgeable on the topic than myself.

1. Existing consumer hardware will not be able to support the adoption of blockchain technology at mainstream scale

One of the most highly touted benefits of blockchain-based technologies is the notion of decentralization.

In short, decentralization means that through various softwares and computer code, we as private citizens will be able to conduct online activities that in the world of the traditional internet, could not be accomplished without an external authority.

One prime example is remittances, the sending of money overseas from one family member to another. Existing options such as banks and wire-services are the middlemen necessary to carry out this transaction, taking their sweet time (usually 3–5 business days), and taking a hefty fee for their service.

In this instance, the idea of a digital currency such as Bitcoin can make perfect sense — if it can eliminate the high transfer fees and time delays inherent to existing solutions.

But are there any drawbacks to a trustless/code-only solution?

One of the blockchain’s critical features is its impermeable record of all previous transactions (a transaction is not necessarily a payment, but any form of user activity for which processing power is required).

Taking Bitcoin as an example, the underlying data structure that is the blockchain, keeps a permanent record of every Bitcoin anyone has ever sent or received.

A copy of this infinitely ongoing series of transactions must… I repeat, must… reside on the devices (nodes) of everyone within the Bitcoin network.

Currently, one bundle of transactions (a block) on the Bitcoin blockchain is 1 Megabyte in size, with a little over 700,000 blocks currently in existence.

A few hundred thousand blocks — hell, even a few millions blocks — each taking up less storage space than a digital photo is certainly a manageable problem.

But what happens when, or if, we transition to a fully blockchain-based computing architecture?

Every single one of us most likely has no less than two or three dozen applications on our smartphone, from banking and finance applications, to social media, and general productivity tools like email and chat apps. What happens when each one of these has a blockchain-based underpinning?

Will a blockchain-based version of WhatsApp force me to store on my physical device all of the conversation histories I have with all my contacts, as well as the conversation histories and metadata of their contacts and associated conversations?

Will a blockchain-based version of YouTube force me to store on my physical device all the 4K, multi-gigabyte videos I have ever uploaded, viewed, and shared over the history of my account?

Will a blockchain-based version of Microsoft PowerPoint force me to store on my physical device all the revision history for all the documents me and my team have ever collaborated on over our years of working together?

It appears that unless there is a fundamental change in the computing model of blockchain technologies (regardless of the degree of compression caused by hashing), it is inevitable that the innovation of the blockchain will outpace the storage and processing capabilities of existing consumer hardware, rendering the entire premise a moot point.

2. The experience of interacting with blockchain-based applications is still far too clunky and difficult a process for a user of average digital literacy.

I imagine that just about everyone reading this article has at some point in their lives, opened up and configured a bank account through their computer or smartphone.

If you remember the process, you’ll know that it wasn’t the most seamless of experiences.

You probably had to scramble to find and upload certain documents and personal data that you don’t often have on hand. You click out to briefly check an email and are forced to restart the process from the very beginning upon returning. “Hang on… what was that new password again?”

This “secure” and “frictionless” process, believe it or not, is one that was established as a result of years upon years of user testing, aimed at determining the easiest and most effective way for an average user to do what they need to do in the app.

But just because it’s the best that we’ve got… does that mean that it’s the best that it can be? Of course not.

This process of online bank account creation, while familiar to millions, still confounds such a large chunk of the population — that instead of going through the supposedly simple online account creation process, most customers still prefer to conduct this activity at a physical branch location.

In other words, good luck trying to explain to grandma that her crypto wallet not only needs a randomized 12-word seed/recovery phrase to set up and continuously access her account, but also an algorithmically encrypted version of that phrase to use as her private key for each different account within the wallet — both of which she needs to store in a secure, offline location where it won’t be lost or stolen.

If she needs to send or receive cryptocurrency or access a blockchain-based online app, she must have her 256-bit public key on hand, either in its raw form or as a QR code, and her device has to support a crypto wallet that interoperates with the dApp in question.

Yeah, it really is that complicated…

So what happens if trouble strikes? Well, there aren’t many answers…

If you forget the password to your online bank account, you can simply request a new one to be generated for you.

If hackers somehow access your password and pilfer money from your online bank account, you are still protected, as your funds are automatically insured up to a certain amount at every chartered bank in the U.S.

If any of the above happens to a cryptocurrency account, then there’s only one thing left for a user to do: Take it on the chin, and write off the loss.

It is my belief that mass adoption of Web3 and blockchain technologies is impossible until a handful of critical problem-resolution mechanisms are agreed upon and established.

How can we ever reasonably consider placing something as critically important as personal financial information, social security numbers, medical records, or other critical data onto the blockchain, if errors or theft in such a virtual environment are permanent, never to be resolved?

A sound financial ecosystem, in truth, should not only protect users from the nefarious activity of bad actors, but should also protect them from their own mistakes and error-prone behaviors.

At the moment, I am not aware of any pending solutions to this issue.

3. Blockchain apps are the internet’s Tower of Babel

The biblical story of the Tower of Babel, for those that don’t know, is when the people of Babylon (present-day Iraq) supposedly got together around 3500 BC, and attempted to build a tower so tall that it would — literally — reach the heavens.

The big man upstairs — looking to protect his centralized authority — wasn’t a fan of this, so in order to derail the project, he made it so that all the architects, contractors, builders, and workers, all now spoke separate languages and were thus unable to collaborate with one another regarding the construction of the tower.

As most unresolved failures to communicate meet a very similar end, you can probably imagine what happened next. The tower collapsed, and that is the story of how all the world’s languages came to be! … supposedly.

So how does this relate to the blockchain?

Well for one, the term “the blockchain” is itself a gross misrepresentation of what the technology is, and what it isn’t.

Despite the often singular use of the term, there are actually thousands, if not millions of different blockchains currently in operation.

And just like the workers on the Tower of Babel, none of them are able to speak to each other in any meaningful way.

Unlike your online bank account, which can easily integrate with your choice of accounting software come tax season, the universe of different blockchains and the functions they enable, have not been built to API with one another.

Without getting into the technical nuances of why this is the case, it is important to understand that many cryptocurrencies and blockchain-based apps are effectively built using methods and code structures that operate only in their own virtual environment, and no other.

When thinking from a purely practical standpoint — does this not destroy a tremendous amount of the value that the traditional internet has created?

Do you like the ability to use your Google account to sign into dozens of other applications without having to constantly create new usernames and passwords?

What about being able to share a video from YouTube to Facebook instantly with the tap of a single button?

Do you find it at least somewhat useful that your Apple TV or Amazon Fire Stick can also be operated with your native Samsung television remote?

I know I sure do…

These trivial benefits, as well as many more non-trivial ones, will have gone by the wayside under the implementation of existing blockchain protocols across the greater software environment.

And I for one, am not keen on undoing decades of technological progress.

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Alexander Honcharenko

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Data analytics/marketing founder turned enterprise fintech product strategist.


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