The Blockchain Doesn’t Have To Fix Everything

Jordan Yallen is the CEO of MetaTope, a blockchain technology company.

Web3 won’t solve all of the world’s problems, nor should it, since some things simply do not need to be decentralized or put on chain.

I’m one of those people who believes blockchain technology is so special that it has a chance to touch virtually everything we do. However, if and when the tech becomes ubiquitous, it still won’t become the panacea that “saves the world,” despite what some of my peers say. The blockchain has the potential to make our lives significantly easier and better, but common sense says that it can’t exist in a vacuum.

That doesn’t stop thought leaders from calling for blanket decentralization or Bitcoin maximalists from believing that all other cryptocurrencies are inferior. This all-or-nothing mentality risks everything we’re building and only increases an asset’s volatility. For blockchain technologies to find their footing as legitimate infrastructure and digital assets to mature as a class, the maximalist hype cycle needs to come to an end.

I certainly believe in the power and potential of crypto, NFTs and the blockchain as a whole, but I’m also aware of the current state of the industry and how nascent it actually is. I don’t believe mass user adoption can happen overnight, nor are we close to living in a Web3 world (we’re at Web 2.5, at best).

One of the lessons learned from the last crypto cycle was that the industry wasn’t ready for mass adoption. When users tried to navigate DeFi during the 2020 to 2021 hype, they didn’t really know where to turn. The barriers to entry were too high and there was a lack of easy/intuitive tech to rely on or try. Users, both in the media and anecdotally, reported having awful experiences and ultimately left the space.

I also don’t believe Web3 technologies will solve all of the world’s problems; some things simply cannot and will not be improved by decentralization or an immutable ledger. Some industries and their technologies already work perfectly for the tasks they need to get done.

Making every ticket an NFT—while a logically sound idea that I personally think would be a good thing—probably isn’t necessary for every type of event. Similarly, if people want to hold their original real estate deed in a paper form rather than etched on a blockchain, well, it’s worked for hundreds of years, so why would it stop now?

But, that reality doesn’t stop the evangelists from pounding their chests and boldly declaring that everything from babies to Roombas should be put on chain.

Maximalism doesn’t help Web3.

The maximalist attitude that’s so prevalent (and off-putting) among Web3 entrepreneurs also doesn’t do anything to actually move our industry forward. Nobody is going to pay you for a copy of your plane ticket or be happy to learn their banking information could be made public.

What they might do, however, is be open to the benefits of Web3 technology if they’re told how blockchain tech will make their lives better and easier. The more we try to make it seem like Web3 is the singular solution to every problem, the more damage we’re doing.

Web3 entrepreneurs also hurt themselves when they focus solely on blockchain tech while ignoring other avenues to success. Take Luca Netz’s acquisition of Pudgy Penguins. Netz bought the collection for $2.5 million as a pure IP play and launched a line of plush toys at Walmart, catalyzing the brand’s explosive growth and leading to a $9 million seed round. It’s a great example of new tech meeting old-school marketing/business models, and it’s paying off big time for Netz.

All technologies exist on a spectrum and the entire tech world works together in some sense, but things can and will change, so Web3 builders shouldn’t be rigid with maximalist notions, like Bitcoin being the only currency the world needs. Not only is that wrong, but with where technologies and general user sentiment stand today, it also sounds ridiculous.

One of the places we see this the most is with Bitcoin maximalists, who evangelize the technology to the point of arguing that all Web3 technologies should be built exclusively on it, ignoring the reality that it wasn’t even designed to be built upon, unlike other protocols, like Ethereum and Solana.

Not only is this maximalist belief erroneous in its understanding of the technology at play, but it’s also fundamentally against what Bitcoin is and is meant to do. At its core, it was created to decentralize finance. So, instead of maximalizing blockchain technology to “find” solutions to problems that don’t exist, let’s innovate and use blockchain tech to solve the issues people already face.

Not everything should be Web3.

While building massive change is always hard and the entrepreneurs who step into the arena should be praised for taking the leap, reaching a world of mass Web3 adoption obviously isn’t as simple as just “decentralizing everything.”

The U.S.’s founders themselves struggled with the idea of decentralization while creating our federal system, often debating about the amount of control that should be placed in government. The truth is that not everything needs to be decentralized, and the things that could benefit from decentralization don’t always need to be decentralized to their maximum.

Likewise, it’s not true that all industries would benefit from a cryptographic ledger. While some obviously would, like enterprise supply chain logistics, it’s not clear that, for example, patient outcomes would vastly improve by putting medical records on chain.

And, similar to decentralization, the things that would benefit from an immutable ledger might not need a ledger for all things. As I said, all technologies exist on a spectrum and work together in some sense, so Web3 technologies should be no different.

The more Web3 founders push the maximalist notion that all of the world’s problems can be solved by the blockchain, the further we’ll get from actually improving anything.

The goal is to make people’s lives better and easier; putting babies and vacuums on chain won’t get us there.

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