Is Web3 Decentralization a Myth? Answering All Your Doubts

    Ever since cryptocurrencies became a thing, people have had high hopes to finally get rid of centralized finance. Decentralization is what makes Web3 different from its predecessor, and ever since it made it to the light of day, the community was set on making it a reality. Why? Well, people are no longer trusting big governments and centralized authorities. The true aim of Web3 is to take the power from these controlling organizations and return it to the people. However, is Web3 decentralization actually achievable? 

    The thing is, decentralization is a broad term that cannot be answered by a simple yes or no. What we can do is decipher how Web3 is functioning, and see for ourselves if the next iteration of the internet is legitimately seeking distribution, or is it merely covering the fact that it’s just another Web2 in disguise. 

    The Need for Centralization

    According to a widely circulated essay written by cryptographer Matthew Rosenfeld, the need for centralization came after the hassle of people running their own servers in Web1. In short, people do not want to set up their own server each time they want to access a certain thing on the internet. And thus, with Web2 coming to light, many companies emerged that will run a server for you via a dedicated platform. 

    By using Web2 sites, you can connect to different applications using backend Application Programming Interfaces (APIs). For example, creating an account on a mobile game with Facebook credentials heavily depends on APIs. This concept is very centralized since servers are provided by a handful of big tech companies. 


    So, What’s the Problem with Centralization? 

    Well, since all Web2 applications and websites people use are centralized, that gives these platforms high authority and thus a huge amount of focal power. User data is stored in centralized exchanges, which creates a point of failure that could be targeted by hackers. In addition, social media platforms such as Facebook and TikTok sell users’ data. For instance, TikTok openly stated that it collects users’ voiceprints and faceprints. Data and information are power in this digital age. 

    Web2 Point of failure

    In addition, trust plays a major role in these centralized entities. Take the bank as an example. People trust the bank with their lifelong savings, only to be faced with governmental corruption. When banks close in such cases, people have no other option to withdraw their money. 

    A Decentralized Web as a Solution

    So, is reverting to a decentralized network like that of Web1 a solution for these pressing issues? It actually is. What Web3 is trying to achieve is full decentralization. This means, migrating from corporate entities and tech companies to distributed networks on computers that have no single point of control. How can such a network exist? Well, it has been existing for some time now. Peer-to-Peer Network

    Distributed networks are anything but new. In fact, you probably have used a distributed network by downloading a Torrent file. Peer-to-peer technology is a decentralized network of interconnected devices that collectively store and share files between them. Each device or computer consists of a node making it a “peer”. Remember that we established that people don’t want to run their own servers? Well, peer-to-peer is the opposite. 

    Each computer in a P2P network acts as both the client and the server. Furthermore, when a computer that has a node or a peer in a P2P network acts as a client, it downloads data and files from other peers. In contrast, when this computer acts as a server, it becomes a downloading source that other peers can use. 

    So technically, there is no one point of failure, and the power doesn’t reside in one company’s server. Actually, all clients become the “owners” of data. 

    Okay, so we’ve seen how decentralized networks can solve Web2’s issues, but is it plausible? 

    Queue In: Distributed Ledger Technology

    The blockchain is a distributed digital ledger that records all transactions and acts as a decentralized database without the need for third parties. It is the basis of all cryptocurrencies and NFT exchanges, and thanks to it, we have Decentralized Finance (DeFi). How is the blockchain decentralized? It is based on the peer-to-peer network model. 

    The blockchain is immutable thanks to its consensus mechanisms, and it is highly secured thanks to its distribution across nodes. Nodes validate and add new transactions to the ledger, and monitor the state of the blockchain at all times. 

    Web3 Point of Failure

    Theoretically, this sounds like the La La Land of the internet. A place where there are no intermediaries, a near-impossible-to-hack database, and high security over personal data. Or is it? Many speculate that Web3 decentralization isn’t achievable, and it is merely Web2 in disguise. 

    Is Web3’s Decentralization a Myth?

    Technically, yes. But before you go running to the hills, we need to get one thing straight: Pure decentralization is very hard to achieve, but Web3 is working towards that. In order to understand how decentralization cannot be 100% achievable in Web3, we have to look at how Dapps and NFTs function on the blockchain. 

    According to Rosenfeld, the world of Web3 lacks clarity regards to the client-server interface. We always talk about how the blockchain is a distributed ledger with leaderless consensus, however, the direct client cannot participate in the actual mechanics of the blockchain. The blockchain has no user interface, everything talked about regarding the blockchain refers to servers. 

    You cannot actually access the blockchain in full if you weren’t a node or a peer operating it. “Blockchains are designed to be a network of peers, but not designed such that it’s really possible for your mobile device or your browser to be one of those peers,” Rosenfeld states. 

    Therefore, you can’t really access the blockchain on your browser or mobile device, you’ll have to interact with the blockchain through a node that’s running somewhere on a remote server

    But, what does this has to do with decentralization? 

    Well, the word server should be enough. Let’s recall when we discussed the need for centralization before, people didn’t want to run their own servers. So, how do Dapps work in this context? First, they look very similar to regular Web2 applications, but their data is stored on the blockchain instead of regular cloud storage. 

    Dapps interact with the blockchain through APIs provided by companies that give access to an Ethereum node. Again, you have API providers just like you have with Web2 applications. There are two known companies that provide access to nodes in Web3, Alchemy, and Infura

    Dapp API

    The problem with Web3’s decentralization lies here, if clients who wish to access decentralized applications have to trust outputs from two companies without further verification, what’s the point of having a distributed network in the first place? 

    Rosenfeld continues to argue that having a company standing between you and the blockchain isn’t great for privacy. It’s like each time you put a query in Google Chrome, the request has to be accepted by Google before the results show up. This is kinda the case with Ethereum. 

    “All write traffic is obviously already public on the blockchain, but these companies also have visibility into almost all read requests from almost all users in almost all dApps”.

    So we are kinda masking Web2 applications with Web3 Dapps because, in their fundamentals, you cannot access the decentralized technologies without platforms like Infura, Coinbase, Etherscan, and more. This brings us back to centralized entities gaining a lot of power. 

    Pure Decentralization Is Hard to Achieve

    Web3 skeptics might be going like this: Aha! Web3 is a scam and decentralization is a myth. Hold your horses. Although Web3 is not 100% decentralized, doesn’t mean it is centralized. 

    Ethereum’s founder Vitalik responded in a Reddit post to Rosenfeld’s claims by stating that the reason why Web3 hasn’t gone fully decentralized is the lack of funding. “Running a full node itself will get easier and cheaper over time as ideas like statelessness and history expiry come into play.” In a way, Vitalik’s response is valid. 

    Although now Web3 is not fully decentralized, its infrastructure is. The blockchain is a fully distributed peer-to-peer network that is much more decentralized than Web2 servers. And with time, everyone will be able to access blockchain nodes or even run a full node without the need for any API providers. 

    Let’s pinpoint each centralized approach Web3 is taking and why it might not be as bad as it sounds. 

    Points of Control 

    Like it or not, the web will always be some sort of centralized points of control. Even a fully distributed P2P network has centralized points of control. The computers that act as a node are themselves a cluster that has the power to shut the whole system down. What Web3 is trying to do with decentralization is reduce the number of central points of control as much as possible. 

    This creates a much more secure and open form of the Web that is much more decentralized than Web2’s platforms. And that’s kinda the point. 

    Existing Centralized Infrastructure

    It is very hard to build completely decentralized applications without relying on existing infrastructure. Since there aren’t as many decentralized options to choose from, Web3 is mostly built on centralized cloud infrastructure. Thus, Web3 can be as decentralized as the structure it is based upon.

    However, that doesn‘t mean that Web3 apps can’t be decentralized. Although they can’t reach the God tier of decentralization, their backends is still the blockchain, and thus, they are storing their data in an immutable and distributed database.

    Web3’s Decentralization Isn’t 100%, But It Will Be

    Web3 is going towards the decentralization trajectory faster than we might think. And to be fair, we can’t expect it to be perfect from the start. Technology is a curve of ongoing development, if it’s not THAT decentralized now, it is working its way to be fully decentralized in the future. Skeptics can always bring up reasons why people should not trust this newfound technology. They can pinpoint why it might be a “myth” or a “lie” to get people invested. Seeing how Web3 is promoted today as nothing but a way to flip Jpegs is kinda painting it in the wrong shade. 

    Web3 is about decentralization (as much as possible) and trustlessness. Given the right time and funds to develop, the Web3 era might become our next reality.


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