Is Web3 the Answer? A Conversation with Gilad Edelman

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The June cover story for Wired magazine is on a movement in tech that many see as having the potential to rewire not just the internet, but produce a fundamentally more democratic and equitable society.

The story is titled “Paradise at the Crypto Arcade: Inside the Web3 Revolution,” and I had the chance to speak to its author-- Gilad Edelman, senior writer at Wired-- earlier this week.

The below is a lightly edited transcript of the discussion.

Justin Hendrix:

Gilad, I've got, open in front of me, a piece that you wrote last year, The Father of Web3 Wants You to Trust Less, and it starts off with what almost sounds like a kind of, I don't know, pharmaceutical advertisement. "Do you ever find yourself wondering, what is Web3? You're not alone." Gilad, what is Web3?

Gilad Edelman:

Ask a doctor before deciding if Web3 is right for you. What I was trying to find out when I did that article, I mean, one reason I even published that Q&A was just to force myself to start finding out what this thing is.

So Web3 is an idea. It's a concept. It's not really a thing that exists. And I started hearing about it last year, and it resists summary, but I would summarize it as a nude version of the internet made fully decentralized by building it on the blockchain.

Justin Hendrix:

So can you kind of just give us a little bit of a history of where Web3 came from? Because it certainly didn't arrive in the lexicon last year, but you profile, for instance, Gavin Wood, and he's been at it for quite some time. Where does this sort of idea of Web3 originate from?

Gilad Edelman:

So I like to start all the way back with the creation of Bitcoin, because Bitcoin, everybody's heard of that. That's the original cryptocurrency based on the blockchain. And the core idea behind Bitcoin was that you had to create a form of digital money that didn't require any central authority to enforce the rules. You needed to solve a bunch of problems and make sure that people would behave in the right way so that the system could stay afloat. And what's so clever about Bitcoin is how it's creator went about solving those problems and thinking about the game theory, what are the incentives of people who use this and who mine the Bitcoin? Let's make sure that everybody is incentivized to keep the system going.

Okay, then a few years after Bitcoin, another important blockchain is created called Ethereum. And Ethereum is similar to Bitcoin, but adds this innovation of being built with a programming language wrapped in it so that people can build apps that run on the Ethereum blockchain. One of the creators of Ethereum is Gavin Wood, who's a British computer scientist. And not long after they rolled out Ethereum, he wrote a couple of blog posts coining this term "Web3", or at the time, "Web 3.0". So why 3? Well, it's a play on Web 1.0 and Web 2.0.

In common understanding of internet history, Web 1.0, that's basically the '90s era up through the frothy days of pets.com, and Internet Explorer is king, and AOL is part of Web 1.0, and then things go kind of south, or not kind of south, big time south when the .com bubble bursts. And then Web 2.0 was coined to describe and maybe generate some buzz about the next generation of successful internet platforms that were all about in, various ways, user-generated stuff, user-generated content. So instead of just consuming stuff with MySpace and then Facebook, people are posting their own content. Even with Amazon, people are writing reviews, so it's more interactive, that's Web 2.0. Obviously this is all an oversimplification.

So the enthusiasm about Web 2.0 begins to curdle, right? To put it lightly. And Gavin Wood was a little bit ahead of the game on that. See, when he started writing about this idea of Web3, he was reacting actually to the Edward Snowden revelations. So what he had in mind was, we need a form of the internet that is resistant to this kind of government control that is so alarming, but it didn't really catch on that much at the time. I think the reason that it's caught on a lot more lately is because of this thing we call the tech lash, with people getting really jaded about these dominant Web2 platforms like Facebook, like YouTube, whatever. And so, the idea that Gavin Wood first coined back in 2014 really started to metastasize in 2021 as more and more money was coming into the crypto world and people getting more and more excited about building this alternative thing using crypto and blockchains.

Justin Hendrix:

So I want to step back and just talk about one idea that seems crucial to Gavin Woods's concept here, and arguably to other blockchain and cryptocurrency systems, this idea of trust, or trust list systems. How would you define the way trust is being used when we talk about Web3, and what does "trust less" mean?

Gilad Edelman:

I was puzzled over this for a while because, I think, for most people, trust is a good thing. And so, it sounds odd and kind of perverse to talk about wanting to get rid of trust. But what it means to Gavin Wood, and we should say, Gavin coined the term, but it now has a life of its own. He's not in charge of what Web3 means. But obviously, the idea that he was getting at is kind of a through line here.

So when we talk about getting rid of trust, what we're talking about is getting rid of the need to trust. I think that's how I would describe it. So to a certain way of thinking, the problem with the way things are now, with the Web 2.0 era that we're still living in, is that you have to trust powerful entities not to abuse their power. And if you go back, again, to the creation of Bitcoin, that's an idea driving Bitcoin as well, that you have to trust the banks, the financial systems, you have to trust central bankers. And so, there's definitely this libertarian, major libertarian streak operating here where we don't want to put our faith in any institutions. So with Web3, part of the idea is, "What if we could design a system that would just work, and we don't have to trust that anybody will do the right thing, because we'll actually design it so that they couldn't do the wrong thing even if they tried?"

Justin Hendrix:

You bring up the libertarian strand that's in this. And I think, to some extent, most of my listeners are probably familiar with the notion that there's a kind of libertarian strand generally in the kind of crypto world, or in the world of blockchains. Recently, I read this article in, my former employer, The Economist, on the complicated politics of crypto and Web3. They have a habit of kind of maybe using a bit of hyperbole, but they talked about the ideas-- is crypto Web3 a libertarian dream or a socialist utopia? It does seem like both those kind of veins of thought are running through this. Why do you think people kind of gravitate towards these extremes when it comes to Web3? Why is that question or that polarity there?

Gilad Edelman:

The Web3 project, as I write in my article, definitely has a more progressive bench to it than the hardcore Bitcoin cryptocurrency movement. It's always dangerous to generalize because there's just so much going on under this banner of Web3, and definitions are kind of everything. So a lot of people will use "Web3" to refer to, or to put a kind of positive gloss on behavior that, when you peel it back, is just money-making schemes. And so, there's tons of stuff that people refer to as, or put under the banner of Web3 that is maybe downright scammy, maybe just rapacious and trying to generate a fortune.

What I tried to do in my article is narrow down on what seems like the core idealistic Web3 project. So that's people who take all these claims very seriously and are really trying to bring them about, as opposed to kind of people jumping on the bandwagon because there's a market opportunity. So having stipulated that, and there are a lot of these people out there, I met a lot of them at this big Ethereum conference in Denver, thousands of people, and the hucksters and the people who didn't really know what was going on were interspersed in there too. And the vibe was absolutely very kumbaya and touchy-feely, and "We're going to come together and change the world."

And so, your listeners are probably familiar with the concept of horseshoe theory, that the political spectrum is not aligned, but it actually bends. And as you get far out to the left or far out to the right, they start to come back towards each other. There's a little bit of that going on with Web3, as you suggest, is this libertarian, is this super libertarianism, or is it super socialism? And both dynamics exist there because on the one hand, you have this distrust of government and institutions and this desire to re-engineer the web, and perhaps even the world, so that it's all bottom-up participatory and decentralized, but with the goal of solving climate change, solving hunger, redistributing power and opportunity to everybody. So it's libertarian means to achieve ends that strike most people as sort of lefty.

Justin Hendrix:

So let's talk a little bit about this journey you went on, because this article, Paradise at the Crypto Arcade: Inside the Web3 Revolution, it's the cover story on Wired, correct?

Gilad Edelman:

It is. It's on the cover of our June issue, which should be coming out soon.

Justin Hendrix:

Tell me a little bit about the journey itself. So you kind of took this intellectual query that you've been on, trying to understand Web3, understand the players, understand the tech, and you went on an actual journey.

Gilad Edelman:

Yeah. The process of doing this article was actually kind of interesting because I started... So I pitched it back in the fall, October or November last year. I started having some conversations about this Web3 thing and I was like, "Wow, this is really interesting. Wired should get on top of this and kind of try..." I was very grandiose. I think I promised them the definitive story about Web3. And then, of course, in my mind, I'd like whip something up by January, and it took a little bit longer than that. But so, I started just making a zillion phone calls, just talking to anybody. There's so many smart people out there who have things, interesting perspectives on the subject and where it fits into the history of the internet, so. And I talked to Web3 on, I talked to entrepreneurs, and investors, and people who are skeptical of it. And I had just piles and piles and piles of notes from all these interviews. And the article that I was... I wrote up a draft and it was kind of like a white paper. It was just sort of a little bit dry, summarizing a lot of my research, but I hadn't really gotten inside the thing.

And there was this conference coming up at the end of February, and I thought, "Oh, well, I should go to the conference. Maybe I'll get one little... Maybe I'll get a scene out of it. Maybe something will happen and I can throw that in the article for some color." But pretty quickly, once I got to East Denver, I realized, "Oh man, I got to just rip up what I've got and start over," because the concentration of interesting illuminating stuff that was getting pumped into me was so high. And it wasn't just that it was more colorful, although it was, it was that there was something that I had been missing by not really being immersed in this space with the people who are trying to make it exist. Being in that environment just gave me a deeper understanding of what motivated these people and what they were doing that I just couldn't have gotten in any other way.

Justin Hendrix:

You do refer to these individuals as starry-eyed proponents, and there are a number of other kind of descriptions of people participating in this event, of course, which would make total sense, right? These are people who are invested in trying to bring this vision forward. And just set the room for us a little bit. Who do you run into at the big Web3 conference in Denver?

Gilad Edelman:

Well, there were an estimated 10,000 people there, so I ran into a lot of people. So again, it was definitely a mix, because as much as we're talking about the starry-eyed idealists and the utopians, there were also plenty of people there who work at DeFi companies, so-called decentralized finance, which is basically investment products in the crypto world, many of which are probably collapsing as we speak given what's happening in the crypto market, but they were still riding high back in February.

So there were plenty of people there who just were networking and showing their product, and wearing matching t-shirts for their blockchain, which they're trying to convince who is the best blockchain. So there was all kinds of the bullshit that you see at conferences in any field, but there were also a lot of really idealistic people. I mean, when I walked in for the first time and grabbed a seat in front of the main stage, there was a panel going on, and it was about using... Something about using blockchain to build public goods. And it was these really earnest people talking about, they worked for something they called Giveth, which is a charitable giving DAO. Now, DAO is a word that I'm guessing we'll come back to in this conversation, but for now, we'll just say it's a Web3 organization.

And this woman was just talking about how much meaning it's given to her in her life and how, this incredible community, and helping people. And I was like, "Where am I?"

And one person, who was not the star of the conference, but he was definitely one of the stars of the conference, who I spent a good bit of time with is this guy, Kevin Owocki, who really embodies the, "revolutionary" might be too strong, but kind of really earnest mission-oriented aspect of this movement, where he's all about building platforms and tools to help people fund projects for the public good in the Web3 world. Now, those projects tend to turn out to be super technical things that don't make sense outside of the context of Web3. It's like, "Oh..." A better... You know what? I can't even pull one out of my butt on the spot, but he's a guy who's been in the tech space for a while. He told me he started many failed startups. He really believes in the power of using blockchains and cryptocurrency to make the world a better place, and then that was the message that he was delivering at the conference. And when I was hanging out with him one day, people just kept coming up to him just to talk or congratulate him or ask how they can get involved. So he really embodied that spirit.

Justin Hendrix:

So Owocki's one of these luminaries that you sort of describe as being interested in crypto, being interested in blockchain in order to, I think you say, "lock human beings into a more cooperative, less self-destructive society." You attribute this idea of regenerative crypto economics to him. What is regenerative crypto economics, and how is that going to help us stop destroying the world?

Gilad Edelman:

Yeah, I think we can't avoid getting into the weeds of this a little bit, because we have to... These concepts are so slippery. Let me try to back up just a little bit and lay out what I think is the basic architecture of Web3. I think there are kind of two branches of it. The first one is actually easier to explain, and it's basically, what if we could replace all the things that we interact with online now with versions that are based on the blockchain?

So an overly simplified way to think about it is, it stinks that Instagram is controlled by Meta and they own all this data on us that we don't... My data gets monetized by them and I'm not really in control of it, and I can't take my pictures elsewhere. Okay, what if we sort of built Instagram, a version of Instagram, but it'd be based on the blockchain, and all my data would be on the blockchain and I would control it with my cryptographic key? And so, the platform wouldn't own it, and everything would be open source because blockchains are public. That way, there's no platform that can screw me over down the road. And if they tried to, if whoever would have... If someone got enough power over this decentralized Instagram, Decentragram, let's call it, then I could take my data elsewhere. That's like the basic vision for a lot of what Web3 is trying to do. And it immediately raises a question that must be answered. And the question is, "Okay, you've built a decentralized Instagram. Why would anybody use it?"

Most people don't care about how centralized... Whether the database is on a server owned by a company, or it's distributed across a bunch of computers, which is what a blockchain is. How do you get people to use it and make it sustainable? And that's where the next really important part of the Web3 worldview comes in, and that's this tokenomics. So this decentralized Instagram, it's not just going to exist. It's going to issue tokens to everybody who participates, like to users, let's say maybe to advertisers in this new system, and to people who lend their processing power to run nodes on this blockchain that it's using, et cetera, et cetera. And the idea here is, "Okay, we're going to incentivize everybody to use it by distributing tokens. And the more people who use our platform, the more valuable those tokens will be." And so, people will be incentivized to not ruin this project, and actually contribute to it and make it better, because they'll have this economic incentive. And also, that will give them ownership. And people who have the most tokens will actually have more power and they'll get to vote on what happens, and it'll all be very participatory. And again, there's no one in the middle calling the shots.

So I've just sketched out the typical idea for a Web3 platform. And of course, nothing like this actually exists. There are things in very early stages that may have one element or the other, but there's nothing that exists on any broad scale that is truly decentralized in the sense of actually giving everybody in the community this direct control over what happens at any scale, but that's the hypothesis.

So if replacing the internet with a bunch of stuff built on the blockchain and handing out tokens to everybody, if that doesn't seem crazy enough to you, don't worry, there's something even crazier here, or something even more radical in its worldview, which is this idea of regenerative crypto economics. This was something that I really had not wrapped my head around until I went and steeped myself in the brew of the Ethereum Denver crowd. So the idea behind regenerative crypto economics is that you can do more with these crypto incentives that I was just talking about than just build new apps and internet platforms. You can also enable people to come together and solve problems that society has struggled to solve. That's a way to put it at the broadest level. To make this a little bit more concrete, we should introduce a central concept in this worldview, which is something called a decentralized autonomous organization, or a DAO. And what that means is, it's a form of organization, so people coming together to do something, that involves... How to explain this? There's the theory of what it is, and there's the practice of what it is.

So at its most basic level, all a DAO really is, is some kind of club or membership organization that conditions membership on owning some crypto token. So I actually made, I created a DAO while I was in Denver, kind of as a goof, kind of as an experiment. And we just made a token. So I have friends who know how to do technology stuff, is the backstory here. I didn't actually... I didn't do this myself. I was the vision guy. So we just created a token out of thin air and distributed it to people. And then we set up a Discord server, and if you showed that you owned that token, you could get into the Discord server. So that's all it is. That's really the mechanics of it.

But the point of it is that, the more elaborate idea behind it is that you can have people who are in the DAO vote on various proposals, and they can vote on the blockchain, and then you will program it through something called smart contracts, but smart contract is just code, to, once the vote has been decided, to execute whatever it is the thing that people have voted on. Now, what can a DAO execute? Really just transferring crypto assets. That's kind of the only concrete thing that you can do on a blockchain, you can move stuff around. So in a way, a DAO is like a souped-up GoFundMe or Kickstarter project. Or you could say a DAO is a weird, overly complicated Kickstarter or GoFundMe project, right?

Why would you go to the trouble of setting up something like this and relying on blockchain and cryptos and stuff when there are simpler methods of raising money and distributing it? And Kevin Owocki's answer, and other people in this space, their answer would be that doing it all in a blockchain... Well, there's two answers. One is actually very simple, which is, you might really be interested in transferring, in setting up a system that crosses national borders, and where you can move things kind of instantaneously without waiting for wire transfers to go through or something like that.

Okay, that gets us back into the whole debate about the future of crypto economy. The other reason would be that, in theory, you can do all these clever incentive designs. And this is where we get back to all that game theory stuff underlying Web3. The idea is that you can build a DAO that has all these incentive designs sort of coded into it so that that will sort of code people into socially beneficial interactions.

Justin Hendrix:

One of the things that you mention in your piece is that, while you're at the conference, the toilets break, right? The toilets are overflowing and not working correctly. And you see that as a sort of a metaphor for Web3 at the moment. I mean, all this stuff sounds kind of interesting, theoretical, very compelling in theory. Does any of it work at present?

Gilad Edelman:

Yeah. Sometimes as a journalist, a metaphor just hits you over the head. And that was one of those times. It's like, so-

Justin Hendrix:

It's extremely early days, it's fair to say. Not to discount the possibilities, but-

Gilad Edelman:

Well, whether it's early or whether it's late is wholly a matter of perspective, because blockchain technology is about as old as the iPhone. And no one would say, "Oh, my iPhone is a great idea, but I can't send texts or take pictures or call people, but it's really got a lot of promise. It's only been 13 years, so give it some time." You know what I mean? So there's really this debate when it comes to blockchain and crypto world, which is, "Okay, should we say, 'It's only 13 years old, give it time," or should we say, 'It's already 13 years old."? In the Jewish community, it's already an adult.

So I mean, does this stuff work? No. A lot of it works really, really terribly, and that is a problem on its face, but it actually creates a deeper problem, which is that the difficulty of using this technology, the difficulty of just doing stuff using blockchain is leading the whole space to do the exact thing that it's supposed to not do, which is centralized. Because back in the '90s, people thought that, well, some people thought that everybody would set up their own email server. Anybody can set up their own email server. I don't know anybody who has. I'm sure I know some people who have done that, but very few people end up doing that, right? Because it's a lot more convenient to have a Gmail account, or back in the day, an AOL account or Yahoo, whatever. Something similar is happening in crypto world, where it's, whether you're an individual or a company trying to do something, it's just really hard to actually be interacting with the blockchain. And so, what Web3 apps tend to do is they actually rely on a couple of companies to read and make changes to the blockchain on their behalf.

So the whole point of doing stuff on the blockchain is that it's open, anybody can read it, you're not trusting any central authority. And then, what's actually happening in practice? A couple of companies are becoming central authorities that are a de facto sort of defining what the reality is. And so, that is a really troubling development for a movement that's all about creating this kind of radical openness and decentralization.

Justin Hendrix:

So we'll see where that goes. I want to tease out a couple of other things in this piece that seemed important to me about it. You do spend a lot of time on the kind of concern over centralization versus decentralization. You talk a little bit about the idea of centralization as being really akin to another word, consolidation, and that lets you bring in some ideas really around the law and around what some other folks, who aren't perhaps in the Web3 world, see as potentially a solution to the problems of Web2, which is of course policy changes, antitrust regulation, or antitrust action, other types of legal interventions that may change the way that the web works. You kind of, I don't know, identified attention, with the folks at this conference in particular, just not even seeing that whole other realm of potential intervention as legitimate or as potentially effective. Is that fair to say?

Gilad Edelman:

Definitely. I mean, my basic view here is that Web3 is a well-intentioned effort to use technology to solve a problem that's actually political. So what I mean by that is centralization is not really the problem, if by centralization, you mean there are people with power in a system, or people with control in a system. The problem is that they have too much power, too much control. Why is that? It's not because of the design of the technology, or at least it's not entirely because of the design of the technology. What Web3 people are actually rebelling against or reacting to is a consolidated market, is monopoly, or oligopoly, where you have a small number of super powerful players, because there are all sorts of...

To take kind of a goofy example, no one is concerned about how centralized the dry cleaner industry is. In a way, you go drop off your clothes, you don't have control over how good a job they do, right? I mean, they literally have your suit and your dress shirt, and can do whatever they want with it. But no one really... I mean, people have their problems with the dry cleaners, but the reason we tolerate that is because there are a lot of dry cleaners, and so, at least if you live in a city. So if one dry cleaner sucks, you just go to a different one. Because what people actually care about is choice, is having options. And Web3 is trying to build this kind of Rube Goldberg contraption using blockchains and crypto incentives and tokenomics to create a world in which they think no one will be able to become the next Facebook or Amazon, because putting everything on the blockchain just will make it easy for people to switch and move around, and not be locked in. And maybe that can work. I'm quite skeptical.

Meanwhile, we actually know what would work, which is government requiring companies to allow you to take your data and switch to another service, or governments requiring there not be one company that controls 50% of all online commerce and a whole bunch of other stuff besides. So regulation and legislation is sort of this forgotten path. Within this world, it's sort of this forgotten way to achieve the things that they're trying to achieve. And you can understand that to some degree, right? Government does not have a sterling track record. Congress is unbelievably dysfunctional, to put it very mildly. We're waiting right now to see if they will manage to pass these two pieces of pretty ambitious antitrust legislation, which nonetheless are not ambitious enough, probably, if what you want is a really wide open tech sector, but which would do a lot.

So these people have kind of... These are young people for the most part, too. They've grown up at a time when the government doesn't seem to get its act together a lot. So it's sort of like technology looks like the only tool available.

Justin Hendrix:

I think that that's an important point. And I do have a kind of sympathy for people who might look at the situation and say, "There seems to be no path forward through Congress. There seems to be no path forward through the courts or any other mechanism that might be attached to government." But in a way, you kind of, I don't know, you can also see to your point about the horseshoe theory. You can also see perhaps in some of the quote, unquote starry-eyed proponents that you ran across at East Denver, you can see a sort of sympathy with some of the, I don't know, more hardcore accelerationist type thinking that happens in Silicon Valley around blockchain, the idea that we're going to try to take institutions apart and that what we need to do is speed collapse of those very institutions that might produce legislation. Do you see any kind of parallels between that thinking, or am I wrong to, I don't know, see a kind of general thrust that seems to be in parallel?

Gilad Edelman:

I would say that the people who I interacted with in Web3 did not have such a hostile stance towards government. I think most people there, to the extent we talked about it, thought that Web3 projects could actually help strengthen democratic self-government. So I think there is, within crypto land, especially in the Bitcoin movement, a hardcore anti-government streak, but the Web3 people that I was interacting with, I don't think had that as much. In other words, it wasn't, "Government's bad and we should get rid of it." It was more like, "Government's kind of useless, so we need to do our own thing."

Justin Hendrix:

Fair enough. So there's a kind of a separation there, to some extent. I teach, I have students that are always kind of looking for ways to kind of make the world a better place. They're fascinated by technology, and a lot of them have gravitated towards Web3, towards crypto. Generally, they see the opportunity. They do believe that the protocol, if we were to shift to a Web3 dynamic, that it could potentially do a great deal of good. When you kind of step back from all of this, and when you got back from the conference, and I don't know if you're still running the DAO or not, but you either put down the road with the DAO.

Gilad Edelman:

Well, it's decentralized, so.

Justin Hendrix:

But you're not running it?

Gilad Edelman:

Far be it for me to...

Justin Hendrix:

Right. If you're still involved in it somehow, in some generative way, are you left with a sense of optimism about it all? Where do you kind of net out after having gone on this journey?

Gilad Edelman:

I would say the optimistic part is that there's a lot of people who would just say, "Web3 is completely a scam. Everything in it's a scam." And I can tell you, there are a lot of really smart, really, what's the word, good people working on this stuff. So I at least walked away thinking that there were a lot of people who are really well intentioned. Now, you know what we say about good intentions, so that doesn't really guarantee a good outcome. So am I optimistic about the project itself? It comes back to what we were talking about with the missing role of policy. I would feel a lot better about the prospects for this if I saw more awareness that can't happen without a role for government.

There's a guy named Jeromy Johnson who works at the Filecoin Foundation, which is a prominent blockchain-based organization. Really smart guy, and a point that he made to me is that everybody talks about Web3 as the blockchain, Web3 blockchain. And what he said was, it's actually not all about the blockchain. That the better way to think of it is it's a variety of technological approaches that have the same goal of decentralization and empowering individuals. For example, there's a lot of cool stuff you can do with the cryptography element without having to put stuff on the blockchain. So when you widen the aperture there, then I start to get a little bit more excited.

I think we actually are going to see people come up with really cool things, but using cryptography, like, I don't think we're going to be using passwords in a few years or five years, not nearly as much as we are now. That'll be really cool. Is that a wholesale rewiring of the internet? No, but when I was talking with Jeromy, and I was kind of throwing... I was running my theory about the role of regulation by him. And we weren't quite seeing eye to eye, but a point that I walked away with was, if these technologies are really so good, I should attribute this to Jeromy, I said, "What do you think about... What if the government just passed laws that sort of forced companies to behave the way we want?" And he said, "I think if the government passed laws like that, everyone would adopt these technologies."

That is a deep point, because that is actually how innovation has often worked in the past, where people think about regulation as being an opposition to innovation, but that is actually not always the case. A lot of the time, what spurs innovation is government imposing requirements that business has to meet. Look at Tesla, right? Would Tesla be as successful as it is without the intervention of government? Obviously not. Would we all have these... Remember how bad LED light bulbs used to be? They used to be awful, but now they're awesome, right? The industry figured out how to make LED light bulbs good, because the government said, "You can't keep using those energy-inefficient incandescent bulbs." So, and I mean, these are kind of goofy examples, but the point is, you could imagine a future where the right kinds of regulations, if these technologies are really worth their salt, the right kind of regulations could actually spur their adoption.

But until, it seems a little bit tragic that this movement is not putting any of their considerable muscle and energy and financial resources into that aspect of the fight.

Justin Hendrix:

It seems like the only engagement that that world has with government is really through the crypto side of things. And we know that lobbyists are out there writing laws and all kinds of state houses, and pumping lots of money into DC, but you don't get the sense that the Web3 folks are leading that charge at all.

Gilad Edelman:

Yeah, it seems like the lobbying effort is more focused on preventing the kind of regulations that they don't want. There's a lot of fear in crypto world that the Securities and Exchange Commission is going to start cracking down, and there's concern that overly broad regulations could nip some of this innovation in the bud. So there's sort of that traditional tech world negative approach to regulation, which is like, "Let's fend off the stuff we don't like." And I have not seen much attention paid to, "What are the kinds of things that could actually give us a boost?"

Justin Hendrix:

In some ways, that reminds me a bit of, I mean, really just the history of the web. I mean, if you think back to the early years of the web, there was that same kind of mentality, "Let's make sure we permit as much innovation as possible." And arguably, that lack of government setting constraints at the outset is what's led us to the place where so many would look at the situation and say, "It needs to be reformed, or it needs to be regulated." It's created the kind of consolidation, and the results of that consolidation go back to that set of choices.

Gilad Edelman:

Yeah. I mean, maybe a simple way to put it is that markets tend to consolidate. If the government is not doing its job as the referee, and just policing to make sure there's a fair competitive market, markets over time, it just tends to get dominated. And the internet arose at a time where, in the American context, where competition policy was practically dead, where the government had just kind of gotten out of the business of enforcement, with the notable exception of the Microsoft case. So because the internet is so young, there's not even a history of... If you want to go back in history, you can find times when the steel industry, when the government used antitrust to break up the steel industry or the supermarkets or the railroads, or almost any business you can name, actually. The Internet's so young that there is no real history of that, again, other than the Microsoft case. And so, we don't really have a template for what that would look like.

Justin Hendrix:

Clearly, since you published this, or probably went to bed with it at least, knowing that Conde Nast has some fact-checking process there must have been... You must have turned in final copy a while ago.

Gilad Edelman:

Correct.

Justin Hendrix:

We have seen this meltdown, right, in the world of crypto? Have you heard from any of your sources about how they've been potentially affected by that? Has it changed the mood? I mean, you really, you came across a lot of people who were trying to reconnect with the joy of tech through Web3. Has that parade been rained on a bit?

Gilad Edelman:

It's a great question. The sentiment that I've seen from Web3 world is, mainly, there have been downturns before, we'll ride this out, so I haven't seen anybody waving the white flag yet. Although, on the other hand, you probably wouldn't notice the... Many people are probably just sort of backing out quietly, that I wouldn't be surprised that that was happening. I think the big question here is... Look, the market is down. It's not just crypto that's tanking. There's some crazier stuff happening in the crypto markets than in the market overall, but to a large degree, the crypto markets are just kind of tracking the Nasdaq. They're kind of like a tech stock. So it really remains to be seen whether the mini-meltdown that's happening in the crypto markets is the beginning of the end, or will crypto come back, if and when, well, let's say when the market overall comes back? So my suspicion is that it's the latter. I don't think the crypto thing is actually dead yet, but we'll see.

Confidence works in strange ways, and I do think that there is so much money invested in things that have no value beyond the willingness of somebody else to pay more for it later, that you could imagine a tipping point where the whole thing really collapses. And if that happens, what are the implications for the Web3 project? That'll be interesting to see, because even though the Web3 project is much more ideals-driven and mission-driven than just trying to get rich by picking crypto stocks, it does depend on the money that's in this sphere to fund projects and to keep programmers employed. So it will be a big challenge for Web3 if a lot of the money evaporates from crypto world.

Justin Hendrix:

Well, I suppose leaving an open question's a good place for a journalist to stop in this particular conversation. I assume you'll continue to cover these things, and perhaps we can have you back on to talk about it again.

Gilad Edelman:

Cool. Sounds great.