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Moxie vs. Vitalik on Decentralization

A recent article by Matthew Rosenfeld, better known as Moxie Marlinspike, creator of the Signal messaging application, has once again sparked the much-heated debate in the Blockchain and developer community around Web3.0.

The article “My first impression of web3.0” raises questions about the level of decentralization in the current Web3.0 ecosystem by presenting several key problem areas he encountered while creating distributed apps (dApps).

  1. Centralized interaction with the blockchain: An actual, decentralized system would require the client (laptop, mobile device, browser, or dApp) to have a copy of the blockchain running in itself that is currently not possible due to constraints arising from system requirements which leave clients with no option but to use centralized providers like Infura and Alchemy to interact with the blockchain. Even MetaMask uses Infura to interact with the blockchain.

    Another example of centralized interaction is between OpenSea and MetaMask. If an NFT gets taken away from OpenSea, it no longer appears in your MetaMask wallet since it uses the OpenSea API.
  1. Privacy: These interactions via a centralized service provider are not checked for authenticity by the client. All clients are simply trusting the response back from these service providers.
  1. Security: An NFT only stores the URL of the server where it exists, on-chain. That means the actual artwork is not on the blockchain but a different centralized server somewhere on the Internet. Anyone with access to this server controls millions of dollars of these NFT’s. They can change the image, title, description, and nothing in the EIP-721 (the technical NFT specification) deals with this.

Moxie attributes this centralization within Web3.0 to two reasons. First, no one wants to run their own servers. That is the reason why Web3.0 platforms like Infura and Alchemy have emerged just like Amazon Web Services (AWS) in the Web2.0 world. (Fun fact: Alchemy styles itself as the AWS for blockchains) Second, it is much easier to make advancements(new features, bug fixes, upgrades) to a centralized platform than a decentralized protocol (like Ethereum)  which he explains using the example of how the email protocol is still unencrypted even after 30 years of existence whereas WhatsApp moved to complete end-to-end encryption in just one year.

He feels that it is expected for a technology to consolidate around such centralised platforms and this should not surprise anyone but then adds, “My sense and concern, though, is that the web3 community expects some other outcome than what we’re already seeing.”

Then there is the question of greed. Moxie explains the role market forces play by going back to the NFT space. He claims that if OpenSea were made purely in Web2.0 technologies, it would not have taken off. The reason he gives? “Because this is a gold rush.” 

People have made quite a lot of money by speculating on cryptocurrency and Web3.0. Now they want to see even more returns, so all this wealth gets put back into the Web3.0 ecosystem, quickly creating even more avenues of wealth creation. Interestingly, it is the same market dynamics that might eventually drive Web3.0 into Web2.0 because they don’t fundamentally care about the distributed nature of the underlying technology, but only in making more money and fast. This is another reason we see more and more platforms appear which are not true Web3.0 but Web2.0 running on top of Web3.0.

The good thing is that he does not feel that Web3.0 will turn out to be another tech bubble but makes it very clear that it is worth thinking about ways to avoid Web3.0 being Web2.0. 

He ends on a rather sombre note saying that given this status quo, he does not feel that Web3.0 can deliver us decentralized platforms and that the efforts made so far would not be enough to prevent the market forces from acting in their favor.

Vitalik Buterin, the co-founder of Ethereum, responded to Moxie’s claims in his own Reddit post, which he added to a tweet. In this tweet, he describes the status quo as a “missing middle,” where the easy parts (wallets, platforms) are centralized whereas the hard parts(the blockchain itself) are decentralized. 

He says that although Moxie’s criticism is valid, Moxie missed the new changes that Ethereum and the blockchain community are currently working on that will address the concerns around privacy, centralisation of APIs and possibly reducing the constraints around running a local blockchain.  

Vitalik presents his perspective of why these changes have not happened yet. He claims that a lot of this is due to limited technical resources and finance. “It is easier to build things the lazy centralized way, and it takes serious effort to ‘do it right’,” Buterin say perhaps letting the readers know that it takes time and effort in keeping a system decentralised and not give into the allure of easy centralised shortcuts.

Ethereum’s co-founder ends by stating that these problems are not difficult to solve and that he sees no reason for the future to look like the status quo.

It appears that Vitalik agrees with the points that Moxie makes about the status quo, but he is also quite optimistic about the future perhaps given that he is at the centre of this new ecosystem and has arguably the most to gain from its success. You may feel siding with one point of view more than the other, but one thing is for sure, Web3.0 is here to stay.

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