Web 3.0 and the Metaverse will fail

Let me explain why.

There has been a lot of hype recently around the Metaverse and Web 3.0.

Often this is also related to Blockchain and Cryptocurrencies. And in some cases even NFTs.

Companies and experts are claiming that Web 3 will enable a new era of a decentralised internet, based on tokens and "available to everyone without relying on the private technology owned by corporations or individuals".

They claim that much of what exists outside of the internet today will soon be replaced by people doing it in the metaverse soon, using equipment like Virtual or Augmented reality. Facebook claims that this metaverse vision is what will power its company in the future.

They might even call it the internet of the future.

Unfortunately, the Web 3 / Metaverse / whatever you want to call it that is being sold to us is guaranteed to fail. It is inevitable, since it is not the innovation it claims to be.

As someone who looks at, evaluates and works on innovations professionally, let me show you why.

If you agree with any of these points, please like or share this article.And by all means, if you disagree with any of the points outlined here, let me know in the comments.

Solution looking for a problem

I will get this out of the way first, as it is the hardest pill to swallow, but also the most important to understand.

The technology of Web 3.0, especially that based on the blockchain, might well work. And when it moves from a proof-of-work to a proof-of-stake, removing a lot of the processing and electricity required, it should be significantly better able to handle doing actual work.

The issue is that the blockchain and Web 3.0 is a technology solution that is looking for a problem to solve.

And most people don't actually feel like their current system is causing them problems.

Therefore, they do not have a reason to switch from the current internet technology.

For example, Bitcoin, based on the Blockchain, claimed to solve the current "problem" of people having to use private companies' systems to send money to one another or pay for goods and services online. Companies like Paypal, banks or Visa & Mastercard, who then also held their data privately.

Unfortunately for blockchain advocates, in reality most people do not actually care much about about how their money gets to the other person, as long as they know that it works. Which it currently does.

And that security in the knowledge that the current system works means that people do not feel like it is a problem to pay for the system. They are happy with the status quo, and are therefore not looking to find or use a new technology.

In fact, most people in the world are not early adopters of new technology, and will wait for the technology to prove itself before they are willing to try it. This can create a valley of death, as the technology tries to find useful applications for itself before actually being able to scale. It is a Chicken-or-Egg situation.

Expectations set too high

The second major reason that the whole system will fail is that the promises being made at the moment are far too high.

"The metaverse and blockchain will fundamentally change how everyone in the world works, plays, communicates and lives...

Nothing will be like it was before Web 3.0...

Money will become obsolete..."

These are grand, big claims.

And they are setting the bar so high that the technology will fail if it does not reach that unattainable mountain peak.

Now, this is not to say that the technology cannot find smaller successes. For example, we are already now seeing blockchain finding niche uses. There may even be small communities which grow over the years which really do prefer to work and communicate using VR and AR in the metaverse.

If the promises made now were a little bit more realistic, then those small wins would be counted as major successes. And the technology could evolve, be refined and grow over time.

But the promises being made now are just so unrealistic that they will definitely fall short.

Conflicts between two worlds

Let us suppose that the technology for Web 3.0 and the blockchain is developed to the extent that it works perfectly and instantaneously.

How much of our current world would need to be replaced and "turned off" in order for that technology to be able to work as promised.

Let us take the example of cryptocurrency.

Yes, we can now use cryptocurrencies like Bitcoin and Ethereum to send someone "money". But we are still saying "I will send you $XXX worth of Bitcoin, which at this moment is worth 0.00025768 Bitcoin".

There is still a conversion from current money currency like USD, which people understand and agree on, into the equivalent amount of Crypto.

What happens when Crypto is the "only" store of value, because current currencies are no longer required? Yes it might work for one-off transactions, but what about recurring transactions where someone gets money. What happens when the value of the cryptocurrency keeps fluctuating on a monthly / daily / by the second basis?

Recurring payments such as, for example, paying bills or receiving a salary.

Who determines how much should be paid each time if the value of the underlying crypto keeps changing? Will you have to negotiate with your water utilities company every month how much you need to pay, based on the crypto price being driven up or down somewhere else in the world?

So for a while, there will undoubtedly be both the current system and the new technology running in parallel. During this time, what would happen to the people who prefer using the current system, such as sending money via a bank or working in an office instead of a VR headset.

Will all the people who insist that work should only happen in the VR headset metaverse not allow someone with a "traditional" preference to work with them?

Unlikely.

Keeping two seperate and incompatible systems running in parallel is very costly. In order for Web 3.0 to completely replace Web 2.0, it needs to show that it is undoubtedly better in every scenario it aims to replace. And in many cases, since people are fine with Web 2.0 systems like email, banking, video streaming and document collaboration, that will not ever happen.

After all, we still have physical bank branches, because some people still want to speak to a bank manager face-to-face. Web 2.0 did not replace them, or the postal service, or going to the theatre in person. And Web 3.0 will not replace them either.

Sunk Costs

People are resistant to change.

There is a lot of psychology which proves that most people prefer the status quo to changing their behaviour, even if it is for the better.

So not only does the technology have to actually be better than the current systems in order for the majority of people to change, these people then need to be convinced to go through the pain of changing.

And many people will resist this change, actively or passively.

They will prefer to stick with the "old" technology, even if the Web 3.0 experts try to convince them to change.

Cui Bono?

Finally, perhaps the most controversial reason why Web 3.0, the blockchain and the metaverse will fail.

Because the people making the promises of how these technologies will change the world are thinking of how they themselves can benefit from making these promises, rather than what the technology can actually do for the end consumers.

It comes from a latin phrase called Cui Bono? which translates to the question Who benefits from this?

For example, with the current fad of NFTs increasing in value, there were a large number of experts on social media (including Linkedin) who were saying how NFTs were the future of art, and how their value just keeps going up and up.

Well, many of them were doing this because they themselves had bought NFTs, and were trying to increase the market value of them in order to sell them for a profit.

They did not care about whether the person who bought this overpriced picture of a Bored Ape could then sell it on to someone else for more again. They had already made their profit. Cui Bono? The people hyping the value of NFTs.

Another example is Facebook, one of the major drivers of the concept of the metaverse. Facebook keeps saying the metaverse is the future, and will drive future growth in their platform and technology, being worth trillions of dollars.

One of the major reasons why Facebook is doing this is not for users of the future metaverse. It is to keep their current investors happy. Facebook's stock value has been hit hard by people leaving the platform, and investors needed something that would indicate future growth. Whether that growth actually comes or not is a different problem. Cui Bono? Facebook's share price right now, and therefore their leadership.

Finally, there is a new explosion of self-styled "Web 3.0 / Metaverse / Blockchain" experts, consultants and agencies online, who are selling their services to help companies understand the importance and future of Web 3.0. Many of these experts do not care about whether their clients actually benefit from implementing Web 3.0 technologies. They just care about the fee they get paid for their services. Cui Bono? The consultants / agencies, not necessarily their clients.

So there you have it.

As Web 3.0 / the metaverse / blockchain is currently being sold, it will undoubtedly fail.

I do think it will find niches in which its innovation actually drives change and benefit.

But it will not change the way in which someone people are promising it.

What do you think? Let me know in the comments below.