Jack Dorsey was the former Twitter CEO and has started a conversation about web3 following criticisms by Elon Musk (Tesla CEO). Dorsey cautioned about the dangers of centralization. He pointed out web3 being owned by Venture Capitalists (VCs), who hide behind the premise that decentralization is a good idea. “I’m concerned to see ‘the industry’ be distracted under false pretenses when we could all be working on things that have a chance at fixing the real issues,” Dorsey wrote.
Jack Dorsey Says Web3 Is Owned by VCs, Tells Elon Musk ‘It’s Somewhere Between A and Z’
This week, Elon Musk and Jack Dorsey raised concerns over web3. Dorsey warned Monday: “You don’t own ‘web3.’ The VCs and their LPs do. Their incentives will keep it from fleecing. It’s ultimately a centralized entity with a different label. Know what you’re getting into.”
His comment followed Musk’s tweet a day prior stating that web3 “seems more marketing buzzword than reality right now.” The Tesla boss further tweeted, asking: “Has anyone seen web3? I can’t find it.” Dorsey replied: “It’s somewhere between a and z.”
Though Dorsey wasn’t specific about which company he meant, Twitter users guessed that Dorsey was referring venture capital firm Andreessen Horowitz. Also known as A16z, it has heavily promoted web3. “As the largest investor in the space, we know web3—but we also understand public service,” the A16z website states.
Some people shared Dorsey’s skepticism about venture capital firms. Cory Klippsten, founder of Swan Bitcoin, commented: “Jack knows exactly the massive scam A16z is perpetrating.” Another Twitter user described: “This tweet is referencing the shady crypto projects being funded by Silicon Valley juggernaut VC firm A16z (Andreessen Horowitz). They’re creating coins like solana and then using their endless capital to market them, explode in market caps then dump the coins on unsuspecting people.”
Web3 and Twitter
Balaji Srinivasan was a general partner of A16z and the CTO at crypto exchange Coinbase. He disagreed with Dorsey, and suggested Twitter as an example. He wrote: “Twitter started as a protocol, the free speech wing of the free-speech party. Then corporate & political incentives led to deplatforming & censorship. Web3 offers the possibility, not guarantee, of something better.”
Dorsey replied: “All false. Twitter was founded as a corporation. It’s had corporate incentives from day 1. It’s trying to offset those, and it will, through Bluesky.” He elaborated:
‘Web3’ has the same corporate incentives, but hides it under ‘decentralization.’ It’s literally a different cap table structure.
Former CEO of Twitter is currently the CEO at Block Inc. (formerly Square Inc.). clarifiedOn Tuesday, he stated that he had nothing to do or be interested with web3 despite the fact that some articles suggested otherwise. He tweeted: “I have nothing to do with ‘web3.’ WSJ and others need names and photos to generate clicks.”
Web3 Ensues: Heated Debate
Many people chimed in on the discussion about web3 on Twitter in response to Dorsey’s tweets. Alex Thorn from Galaxy Digital’s Firmwide Research, is one of those who agrees with Dorsey. tweeted:
Jack is absolutely right about the ownership of many web3 projects.
Thorn continued: “This is very visible with newer L1 chains, whose supplies are much more centralized than those from the ICO era (let alone bitcoin). Hard to see how the supplies (& governance) of these coins decentralize over time.”
Alexander Leishman, CEO of River Financial, wrote: “Jack gets it. Web3 will keep making people a lot of $$, but don’t delude yourself.”
Some people, however, disagree with Dorsey. Gemini founders the Winklevoss Twins were also present. Tyler Winklevoss pointed outDorsey’s first tweet, which was a non-fungible token (NFT), was sold for more than $2.9 million. “Brought to you by web3,” he wrote. Cameron Winklevoss is his brother. noted:
Web2 should have allowed you to own your privacy and data. Web3 is at the very least a possibility.
Chris Dixon, a partner at A16z, argued: “In web3, all the code, data, and ownership is open source. You can read it, and make your own decision. VCs (including A16z) own very little of it.”
‘I’m Concerned to See the Industry Be Distracted Under False Pretenses’
Dorsey explained in a different tweet: “I’m concerned to see ‘the industry’ be distracted under false pretenses when we could all be working on things that have a chance at fixing the real issues.” He emphasized that “The VCs are the problem,” and “not the people.”
Ajit Tripathi CFA, Head of Institutional Business at Aave commented:
Jack points out the risk that we need to acknowledge. While it might not be the message we are looking for, economic centralization is a real risk to prime web3 properties.
Dorsey responded with “Exactly.”
Dorsey claims that Marc Andreessen (co-founder of Andreessen Horowitz and now an investor in many web3 startups) blocked him on Twitter. Former Twitter boss wrote:
I’m officially banned from web3.
Is it possible to agree with Jack Dorsey, Elon Musk and others about web3 Leave your comments below.
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