In short, no Blockchain isn’t dead. Blockchain is a decades-old technology with certain niche applications. Web3, on the other hand, might’ve been dead on arrival.
From late 2021 to early 2022, Web3 was hailed as the future of the internet and industries from financial services to logistics – but a mere 12 months later, the concept has largely been forgotten or written off as a marketing synonym for blockchain.
As of the writing of this post, Blockchain and Web3 are both in steep decline in Google search interest, per Google Trends.
What is Web3? And Web2 for that matter?
The phrase Web 3.0, or Web3, was originated in 2001 by Tim Berners-Lee – the computer scientist responsible for inventing the World Wide Web. In the 1990s, Berners-Lee outlined many of the ideas that would later be popularized within the Cryptocurrency community like decentralization, freedom from censorship, and a bottom-up design with widespread participation and experimentation. Years later, in 2014, Ethereum co-found Gavin Wood co-opted the phrase Web3 to describe a future internet based largely on different uses for blockchains.
As a point of differentiation, Web 2.0 was used in the first decade of the 21st century to describe a new type of website focused on collaboration and ease-of-use. Sites like Digg, Myspace, Facebook, and other early social media outlets enabled people to connect and share online like never before. This was different from the first generation of websites, which required much more technical expertise and weren’t nearly as user friendly or enabling connections. Web 1 sites like GeoCities or Tripod were largely forgotten as users moved on to the new social websites.
In this graph from Google Trends, we can see the fast rise and subsequent decline in interest in Web3.
While Web3 as a blockchain & cryptocurrency-related concept began to be used around 2014, it only really took off towards the end of 2021 when a push from VC firms and media outlets put it – along with the related concept of ‘metaverse’ – on the map for the next year at the height of the recent economic bubble. As we can see in Google Trends, though, the idea of Web3 has fallen precipitously since then. The Web3 media push coincided with price peaks for Bitcoin and cryptocurrencies, popularity of NFTs, and Super Bowl ad buys by companies like FTX (which famously blew up and lost billions of dollars in the Fall of 2022).
This famous commercial, featuring Larry David, is enigmatic of the heights of the Web3 media spending blitz from the end of 2021 which, by the end of 2022, had dried up.
What is a Blockchain?
Blockchains have been around for many decades. Its not a new or novel technology, although the topic became quite popular beginning around 15 years ago when Satoshi Nakamoto first used a blockchain as a public distributed ledger for the cryptocurrency known as bitcoin. While the original bitcoin Whitepaper described an online payment system, the currency has failed to be widely used for payments due in part to large price fluctuations caused by speculation.
2017 and 2018 were the years that blockchain became the hottest trend in the financial services industry. At the time, major corporations were investing heavily in what was thought to be the future of finance. Despite the heavy investment and widespread media attention, blockchain has failed to become a critical technology for the financial sector.
In this graph from Google Trends, we can observe the initial 2017/2018 rise in interest for blockchain, followed by a decline leading up to the 2021/2022 rally in interest, followed by a continued decline.
Blockchains, and the related concepts of hash chains, Merkle Trees, and Sybils are not fundamentally related to cryptocurrencies. A blockchain is simply an append-only data structure – sort of like a spreadsheet in which users can only ever add new rows and never edit or remove existing rows.
This lecture, by UC Berkeley professor Nicholas Weaver, explain in detail the relationship between cryptocurrencies and blockchains.
The NFT Connection
During 2021, and into early 2022, the Web3 & Blockchain adjacent technology known as Non-Fungible Tokens (NFTs) took the world by storm. Popularized by celebrity endorsem*nts, NFTs were going to be the future of all sorts of realms – from art, to music, to trading cards, to golf club memberships. An NFT is essentially a unique ID recorded on a blockchain. They are sometimes tied to a URL that hosts an image file, but not always.
While interest in NFTs rose incredibly quickly in late 2021, outside of a brief moment of interest in December 2022, the trend has largely disappeared. The December 2022 release of the Donald Trump NFT Collection is thought to be responsible for the temporary interest in the US for NFTs – evidence that NFTs certainly aren’t yet dead and are still of great interest to many people.
Examples of artwork in the Donald Trump NFT Collection, per MarketWatch.
Perhaps the best resources for a deep dive into NFTs comes from video essayist Dan Olson. This documentary was released in January 2022 at the height of the NFT boom. In this video, titled Line Goes Up, Dan walks viewers through the complex and complicated world of NFTs.
That was a lot. So, what’s the verdict again?
The Web3 trend of late 2021 and early 2022 was largely a marketing push from companies that stood to gain from the continued growth of cryptocurrency and NFTs. While possible that Web3 has a resurrection, and we’re merely in a Crypto Winter – a low point in a cycle – it seems most likely that Web3 was never truly a “thing” beyond the marketing hype.
Blockchains, and related technologies, will continue to be used for applications outside the world of cryptocurrencies. The fate of NFT and cryptocurrencies appear to be on shaky ground as even paid celebrities have abandoned the trend.
Only time will tell if the cycle continues and blockchain-based cryptocurrencies – along with Web3, NFTs, and probably other concepts that haven’t been popularized just yet – truly become the future of finance and the internet.
