Techno-Utopians, Scammers, and Bullshitters: The Promise and Peril of Web3 and Blockchain Technologies According to Operators and Venture Capital Investors

TL;DR

This paper explores the visions, promises, and practical challenges of Web3 and blockchain technologies as perceived by operators and investors, highlighting ideological goals and potential risks like scams and inequality.

Contribution

It provides empirical insights into how Web3 stakeholders perceive technological promises and the real-world obstacles that threaten these visions.

Findings

Decentralization is seen as key to user autonomy and financial inclusion.

Stakeholders recognize practical challenges like rapid development and conflicts of interest.

Concerns about scams, inequality, and governance issues are prevalent.

Abstract

Proponents and developers of Web3 and blockchain argue that these technologies can revolutionize how people live and work by empowering individuals and distributing decision-making power. While technologists often have expansive hopes for what their technologies will accomplish over the long term, the practical challenges of developing, scaling, and maintaining systems amidst present-day constraints can compromise progress toward this vision. How technologists think about the technological future they hope to enable and how they navigate day-to-day issues impacts the form technologies take, their potential benefits, and their potential harms. In our current work, we aimed to explore the visions of Web3 and blockchain technologists and identify the immediate challenges that could threaten their visions. We conducted semi-structured interviews with 29 operators and professional investors in the Web3 and blockchain field. Our findings revealed that participants supported several ideological goals for their projects, with decentralization being a pivotal mechanism to enable user autonomy, distribute governance power, and promote financial inclusion. However, participants acknowledged the practical difficulties in fulfilling these promises, including the need for rapid technology development, conflicts of interest among stakeholders due to platform financing dynamics, and the challenge of expanding to mainstream users who may not share the "Web3 ethos." If negotiated ineffectively, these challenges could lead to negative outcomes, such as corrupt governance, increased inequality, and increased prevalence of scams and dubious investment schemes. While participants thought education, regulation, and a renewed commitment to the original blockchain ideals could alleviate some problems, they expressed skepticism about the potential of these solutions.