Web3, Silicon Valley’s New Obsession, Looks a Lot Like Its Last One

If you’ve spent any time around the tech industry recently, you’ve probably heard the good news about Web3, the presumed next chapter in internet history. The so-called Web 2.0 era, which was dominated by a handful of social media platforms, is over. Web3 boosters say that instead of relying on Facebook—now rebranded Meta Platforms Inc. to avoid any of the bad vibes associated with social media—we’ll soon be communicating using decentralized services that will make the current fears of censorship by tech monopolies passé.

Web3 applications are based on cryptocurrencies, or digital tokens that are tracked on blockchains. These tokens are distributed to an app’s early investors and users, and can also be bought and sold on cryptocurrency exchanges. In theory at least, they’ll appreciate as an app takes off. Venture capitalists invested $30 billion in crypto projects last year, according to research company PitchBook. Much of that went into Web3 startups such as Sky Mavis, developer of Axie Infinity, a blockchain-based video game; BitClout, a decentralized social network whose founder is known by the pseudonym “diamondhands”; and OpenSea, a marketplace for nonfungible tokens, the digital collectors’ items known as NFTs.