We’re increasingly beholden to platform-based giants like Google and Amazon, acting as digital landlords. In this arrangement, we serve as cloud-serfs, relinquishing our data and generating trillions in value for algorithms that we’ll never possess.
More than 80% of Netflix viewing is determined by its recommendation algorithm. Furthermore, Amazon is not a neutral marketplace — its matching engine favors its own products, while third-party sellers pay up to 50% of their revenue in fees to compete for customers.
The promise of Web3 was to transcend these digital landlords.
Reclaiming the Web3 thesis
Web3, as articulated by Ethereum co-founder Gavin Wood in 2014, envisioned a “post-Snowden web” — a remedy for centralized control based on peer-to-peer trust.
However, Gavin’s architectural vision has been distorted.
Ethereum produced “more individual millionaires than any other project” and, alongside the wave of ICOs, shifted focus from technological ethics to financial returns.
Billions funneled into speculative ICOs have seen up to 90% face substantial losses or become obsolete within a year. This climaxed in the 2021 bull market, where the crypto market cap peaked at $3 trillion, diluting “Web3” into a vague marketing term aimed at investors.
The objective of creating a trustless, peer-to-peer internet was, for a time, obscured by layers of hype.
Intermediaries no more
The strength of centralized platforms lies in their function as trusted intermediaries.
You trust Amazon to process payments and settle disputes with sellers; you rely on Google to verify, rank, and display information. This trust-as-a-service model creates a golden cage: the intermediary controls the rules, the data, and a substantial share of the value exchanged.
Initial Web3 efforts sought to address this by employing on-chain transactions, where every interaction is a transparent, permanent record. However, this is akin to requiring a global commerce system to operate on a single, congested highway. Real-world commerce necessitates infrastructure that can match its speed and complexity — not every transaction should occur on-chain.
State channels present a superior infrastructure
Picture a state channel as a high-speed, private route connecting two parties, circumventing the congested blockchain. Thousands of interactions — value transfers, data permissions, and contract updates — can occur instantaneously and for free, with each step cryptographically validated.
The primary obstacle to peer-to-peer digital commerce has been the risk that one party might default on their obligations. The state channel (ERC-7824) design mitigates this risk without compromising efficiency. Before any transaction, parties deposit funds into an on-chain smart contract as a security pledge. If one side withdraws, their committed on-chain funds ensure the other party is compensated. By allowing for near real-time settlement of profits and losses, this system eliminates the necessity for a trusted central intermediary.
- For commerce: instead of leasing space on Amazon’s platform and incurring fees of up to 50%, buyers and sellers can establish a direct channel governed by an impartial smart contract.
- For data: rather than handing over your entire life story to Google, you can open a channel with an application, enabling temporary, paid access to your data and allowing you to revoke it whenever you choose.
This fusion of on-chain security and off-chain efficiency paves the way for a new creation: the autonomous enterprise. This system involves encoding business logic into smart contracts, operating transparently and globally without relying on a traditional corporate structure.
Bitcoin eliminated the need to trust government currency issuance. Ethereum removed the necessity for trust in enforcing contracts. It’s now time to eradicate the requirement for uncritical trust in platforms.
