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The Almighty Buck Bitcoin

'As AI Rises, is Web3 Dead in the Water?' (inc.com) 128

Inc. reports that funding for Web3 startups in 2023 "declined 73% from 2022, according to new data from Crunchbase." In total, Web3 startups netted $7.8 billion in 2023, compared with the $21.5 billion raised in 2022. It's part of a broader and sobering comedown from the stratospheric highs of tech's pandemic boom time, in which investment flowed to startups at historic rates, valuations soared and unicorns emerged seemingly every week. Last year firmly belonged to AI, with $17.8 billion invested in the sector, according to Dealroom.

Even as some remain convinced of Web3's future, uncertainty lingers over certain stumbling blocks, including how the technology can be farmed out to a massive user base on par with today's biggest tech firms. "I haven't seen [a company] that screams to me, 'this is what's going to get people on board,'" says Jillian Grennan, a business and law professor at UC Berkeley who studies Web3. Web3 startups are failing to net the investment indicative of revolutionary tech as AI steals the show and the dough. The reasons vary: Many have pointed out that defining Web3 is tricky, and Grennan mentions that appetites for navigating digital worlds may have been dented by pandemic-born Zoom fatigue.

Beyond that, there's the question of how to regulate crypto — a marquee aspect of the Web3 universe--which may have given investors some pause. "In this next period, we're going to get some important regulatory clarity that we just haven't had," Richard Dulude, co-founder and partner at Underscore VC tells Inc. "A lot of people sit on the sidelines until they have that...."

Interest rate hikes and the bloated startup valuations of 2021 have meant VCs can't throw their weight behind exciting ideas alone, Dulude says. The sector is undergoing "this transition from chasing growth, and trying to grow at all costs to actually investing behind the growth," he says.... All the investment couldn't compensate for one vulnerability: The technology is hard to use... Macroeconomic factors are of course important, but an industry resurgence depends first on whether Web3 can become easier to navigate for average people and provide them with a reason to hang around. "It's still pretty cumbersome to interact with the technology," Dulude explains. "Until it's made usable, it's really hard to break out of the current market environment we're in."

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'As AI Rises, is Web3 Dead in the Water?'

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  • by Anonymous Coward

    As $Buzzword1 Rises, is $Buzzword2 Dead in the Water?

    I could not give the tiniest shit.

    • As $Buzzword1 Rises, is $Buzzword2 Dead in the Water?

      I could not give the tiniest shit.

      AC's Rule of Headlines: No Shit

  • Of course (Score:5, Interesting)

    by Anonymous Coward on Sunday January 07, 2024 @04:55AM (#64138074)

    Web3 was just a euphemism for kleptocurrencies and all that crap. Of course it's dead. A little trasnparency and sunight was enough for that. The problem is that it still needs to be staked through the heart, doused in holy water, burned, and its ashes sealed in a a lead lined container then sunk into the Mariana Trench.

    • Web3 was just a euphemism for kleptocurrencies and all that crap.

      Anything using blockchain, so also non-scammy applications like medical records and distributed computation.

      But for some reason, no one wants really really badly for you to invest in those.

      • by Casandro ( 751346 ) on Sunday January 07, 2024 @07:19AM (#64138206)

        It's been over a decade now and _nobody_ was able to find any sensible use case for that technology that couldn't be done with much less effort without blockchains. Not even the original ideas behind cryptocurrencies have been reached. Cryptocurrencies are now more centralized than "normal" currencies, transaction fees are higher than anything banks would even dream of.

        Essentially all that's left is fraud.

        • It's been over a decade now and _nobody_ was able to find any sensible use case for that technology that couldn't be done with much less effort without blockchains.

          I think there is one sensible use case (built largely by some of my colleagues at Google, actually): Certificate Transparency [transparency.dev]. CT has some very peculiar requirements which make a blockchain[*] is useful. CT aims to ensure that there is a global ledger of all legitimately-issued CA certificates which both browsers and web site owners can check, browsers to verify that a web site's certificate is legitimate, and web site owners to verify that the ledger doesn't contain any falsified certificates for their se

          • A key element that makes this all workable, and cheap, is the fact that recovery from ledger manipulation is easy: while the NSA could trivially insert a fake record into some copy of the ledger, the manipulation would be noticed very quickly and the certificate be revoked.

            Maybe a trivial effort on the part of the NSA would be noticed and removed. However, what about a non-trivial effort? From what I've read, the more shadowy arms of the NSA have done some rather extreme effort stuff.

            Also, wouldn't it be fairly trivial for them to bury the system in computing power if they tried?

            • A key element that makes this all workable, and cheap, is the fact that recovery from ledger manipulation is easy: while the NSA could trivially insert a fake record into some copy of the ledger, the manipulation would be noticed very quickly and the certificate be revoked.

              Maybe a trivial effort on the part of the NSA would be noticed and removed. However, what about a non-trivial effort? From what I've read, the more shadowy arms of the NSA have done some rather extreme effort stuff.

              Like what? Go learn how it works, then see if you can come up with any attacks that would be successful.

              Also, wouldn't it be fairly trivial for them to bury the system in computing power if they tried?

              Computing power isn't even relevant. CT isn't a proof of work scheme.

        • You aren't wrong. I've interviewed with a couple of web3 outfits, their business models left me incredulous.

      • by jmccue ( 834797 )
        That is because doing things that really help society, people and attempts to keep things secure does not generate 1000% per day profit and high bonuses. More likely you may get 10% profit with those. Ponzi schemes always seem to win investment dollars these days.
    • Add to it privacy intrusion/profiling.

      Please go back to 1.0.

    • by rsilvergun ( 571051 ) on Sunday January 07, 2024 @10:24AM (#64138332)
      Go look at the price of Bitcoin. They're talking about and it's very possible that they're going to allow or called crypto efts or exchange traded funds. These are basically the exact same type of investment instrument that caused the 2008 market crash. And we're going to do it with pretend money on computers...
      • by Luthair ( 847766 )

        Given that there was evidence the last two times bitcoin was on the rise there was strong evidence of wash trading I see no reason to think that wouldn't also be the case this time around too.

        Thats an enormous stretch to try to link BTC and the financial crisis simply because ETFs.

  • by rossdee ( 243626 ) on Sunday January 07, 2024 @05:05AM (#64138082)

    Shouldn't we be up to Web5 , Web11, or Web121 by now?

  • Dystopias usually don't disappear that quickly.

  • Degenerative AI will propel Web3 where no man (woman or other gender) has gone before.

  • by gilgongo ( 57446 ) on Sunday January 07, 2024 @05:27AM (#64138110) Homepage Journal

    I thought this was an interesting take on the current frenzy about AI:

    "AI applications can be plotted on a 2X2 grid whose axes are "value" (how much customers will pay for them) and "risk tolerance" (how perfect the product needs to be)."

    So investors may not see the enormous costs of running these AI systems (data centres, highly-skilled engineers, legions of content checkers etc.) as worth the return on low-profit stuff like image generation (which images in the US have also been ruled as not being copyrightable BTW). And the enormous costs of running high-profit but high-risk stuff like self-driving cars or radiology bots if those systems make mistakes in risk-intolerant domains. And we are still way away from any real efficacy in those applications so far. In fact it's debatable whether stuff like self-driving cars or diagnostic bots are even going to be feasible, for both technical and market economic reasons.

    https://pluralistic.net/2023/1... [pluralistic.net]

    • Why does every AI bubble article sound like it was written by someone butthurt about the fall of bitcoin?

      When the dot com bubble collapsed the internet didn't go away, internet storefronts didn't go away, direct internet sales, etc. Selling products online was definitely the future. We were left with everything in place to make it happen, and it just did in its own time because a pile of investor money couldn't make it happen faster. That bubble didn't fail because internet commerce was a dead end.

      That whol

      • by g01d4 ( 888748 )

        It's as useful today as it ever was.

        I think there's a difference in that blockchain technology isn't really going to evolve, whereas AI still has some ways to go, and as AI evolves more uses for it will come into focus. For better or worse, hype fueled capital has its limits promoting that evolution.

    • AI doesn't just mean LLMs and image generators. Deep neural networks trained on large datasets are everywhere. When you do a Google search, it uses AI to decide which pages to show you. Hit the translate button in your browser and it uses AI to translate the page. Log in to Youtube and it uses AI to decide what videos to recommend to you. Post a photo on Facebook and it uses AI to identify the people in it.

      Deep learning is everywhere because it works so much better than the techniques that were used be

      • by gilgongo ( 57446 )

        AI doesn't just mean LLMs and image generators. Deep neural networks trained on large datasets are everywhere. When you do a Google search, it uses AI to decide which pages to show you. Hit the translate button in your browser and it uses AI to translate the page. Log in to Youtube and it uses AI to decide what videos to recommend to you. Post a photo on Facebook and it uses AI to identify the people in it.

        Agreed, but those things aren't seen as disruptive new applications that form part of an investment bubble. This at the moment comprises mostly of things like LLMs and GANs along with apps that are reliant on AI such as self-driving cars and new drug manufacture, etc.

        There is also the fact that those "bubble" applications are in the hands of a very small number of players compared to tech in previous bubbles like the .com boom, web3 and stuff, which comprise of thousands of players spreading the investment.

  • "Always Has Been"

    *Insert spacesuit and handgun pic here*

  • by 93 Escort Wagon ( 326346 ) on Sunday January 07, 2024 @05:43AM (#64138130)

    Even the semi-intelligent have come to realize crypto is a scam. If AI didn't exist, web3 would still be "dead in the water" at this point.

    • Because there's still a lot of too bad for proof of work nonsense which requires enormous computing resources that are going to be more and more devoted to AI because it's roughly the same competing resources.

      Also crypto is far from dead. Bitcoin is pushing over $40,000 on news that the SEC is going to approve crypto-backed exchange traded funds. I'm not saying I approve of that the exact opposite actually it's utterly terrifying to think that Wall Street is going to start doing large-scale transactions
  • by Qbertino ( 265505 ) <moiraNO@SPAMmodparlor.com> on Sunday January 07, 2024 @05:45AM (#64138132)

    ... last week, so I don't see any problem.

  • by bb_matt ( 5705262 ) on Sunday January 07, 2024 @05:55AM (#64138138)

    Replacing already optimal network applications with a blockchain infrastructure that:

    * After over a decade still has no use case outside of speculating on its own value
    * Is completely unscalable
    * Is hugely fragmented
    * Is ridiculously insecure
    * Is full of the worst type of shills and outright criminals
    * Is absolutely NOT decentralized, about the only claim it ever made which had some merit
    * Is doomed to failure even if the above were not true - governments the world over are NEVER going to accept a lawless decentralised financial system

    The sooner any hype around this pile of steaming garbage ends, the better.

    I'd respect slashdot a great deal more if it stopped posting topics about the subject, its a joke.

    • by gweihir ( 88907 )

      Yep, pretty much. With any single one on your list already making the thing completely unworkable. And probably a few more reasons you did not list.

      • by bb_matt ( 5705262 ) on Sunday January 07, 2024 @06:09AM (#64138152)

        Indeed!
        One I forgot to mention, possibly one of the most important:

        Wild price fluctuation.

        How on earth can you offer a reliable service, based on blockchain transactions, when the price of any given "asset" is subject to "value"
          fluctuations as high as 40% in a matter of days?
        That's even before we get to the issue of scalability.
        The idea is that investors provide the blockchain compute power in exchange for "assets" per transaction - what could possibly go wrong?
        The biggest irony being that some of these "investors" are providing compute power on the back of the cloud - AWS/Google/Microsoft. You couldn't make it up.

        • by gweihir ( 88907 )

          Very much so. Relatively stable and more so predictable currency values and exchange rates are a primary requirement for any real-world use and trade. There is a reason so many countries with an unstable currency have to use USD or EUR for everything international and sometimes even for many domestic things.

          Something based on the Greater Fool Theory and money laundering as its primary "uses" cannot be stable enough to be a valid "currency" option outside of these uses. Oh, an look, it is not.

    • I'd respect slashdot a great deal more if it stopped posting topics about the subject, its a joke.

      Slashdot's current owner is a company with its own cryptocurrency.

      What becomes of Slashdot if the world admits cryptocurrency is and always was a big fraud, and/or dumb idea? It was first sold on to a company whose business model was attaching advertisements to open source downloads, then to these guys, what's next? Who else can be convinced that a discussion site with mostly lurkers and where a huge percentage of the active user base is only present to troll is worth owning?

      • We start a crowdfund to purchase it, owned by the users. We going full socialist co-op on this place.

        "It's one website Michael, how much could it cost? Ten dollars?"

  • by gweihir ( 88907 ) on Sunday January 07, 2024 @05:56AM (#64138142)

    Than one was dead from the start.

  • by 278MorkandMindy ( 922498 ) on Sunday January 07, 2024 @05:57AM (#64138144)

    AI is supposed to be central to Web 3.0, as is crypto. Seems like a "great" idea, but the implementation is non-existent. I would like a more privacy-oriented web that uses AI to answer questions (as google gets worse and worse). That has yet to happen.

    The simple fact is that money begets money. Open source and privacy is great, but if there is no money in it, it won't happen. In today's capitalist society anyway.

  • Many have pointed out that defining Web3 is tricky

    Not tricky at all. It's exactly like Web 2.0: it's a buzzword now, and it will be a pile of shit when it's finally rolled out.

    And that predates AI.

  • Web3 failed not because of AI, it failed because it sucks. Web3 is a solution looking for a problem and after years of searching there is 0 viable products that are possible and exist because of it. AI on the other hand "exists" for little over than a year and already has multiple viable products, enhancements to existing products and looks like it will deliver a LOT more in the coming years once the tech matures and gets even more sophisticated.
  • by Tony Isaac ( 1301187 ) on Sunday January 07, 2024 @10:35AM (#64138352) Homepage

    Remember web 2.0? Essentially, it referred to interactive, dynamic web sites, as opposed to static "brochure" type sites. Basically everything today is Web 2.0: shopping sites, maps, search engines, Wikipedia, everything that has dynamic content. Slashdot itself is a Web 2.0 site.

    So where are these Web3 sites, based on blockchain? Yes, some existed. But I'll bet 99% of people never used one. That's because Web3 never solved any real problems. There was nothing to draw anyone to a Web3 site, other than to be able to say you did it. Web3 was never more than a crypto marketing ploy.

  • Web3 needs to check the history of the Franklin Mint, turns out that certificate of authenticity does not mean a lot. Web3's death has nothing to do with AI and more to do with crypto scams. Plus If I buy a painting from an artist, I don't have to pay that artist a second time when I sell it - Web3 attempts to distort the ownership of art.

  • You must have the new sauce in your business plan. Doesn't matter if its a political movement, griftcoin, or Eliza 6.0. Otherwise, the low-effort, low-skill financial advisors won't have any way to know you're in the cool kids club and recommend your stock io the Iowa School Janitors Pension Fund.

    What will the Next Big Thing be? My guess is Vietnam, make thing there, sell things there. No, I have nothing to do with the country. It will just become cool to do, because there's an actual business case that can

  • Web3 Never existed (Score:4, Informative)

    by Kisai ( 213879 ) on Sunday January 07, 2024 @11:06AM (#64138420)

    Web3, cryptoshit basically tried to make it self seem like the next version of web 2.0 (which is running javascript using DOM manipulation instead of endless piles of document write/innerhtml, responsive hhtml) I don't know how any of this crap was ever supposed to be "web" anything when none of it ran in the browser.

    Snake oil, rug pulls and ponzi scams, that's all it amounted to.

    Crypto currency is garbage, nobody needs it, it costs too much "fiat" money to actually use, and thus it's relegated to being used by idiots with no sense of reality.
    NFT's, interesting idea behind it, but ultimately it was a reciept or signpost to an actual asset, still stored on the regular web. Anyone who wanted "your" asset could just go get it. Not to mention you could just launder anyone elses assets. It's only use was to try and find a "use" for smart contracts on Ethereum.

    Only people who were either too stupid to understand what they were getting into, or were already in in too deep and needed to get out of the ponzi scheme before it collapses, pushed for any of this shit.

  • In surprised VC still pump 7B$ in crypto. Anyone in the VC industry cares to give inner circle reasoning? No /. opinion
  • ... "web 3"? I've been a professional software dev for 25+ years, and I've never fucking heard of "Web3"?!?...

  • by Opportunist ( 166417 ) on Sunday January 07, 2024 @03:45PM (#64138939)

    I frankly don't care who hits the concrete first, as long as both jump.

    The sooner worthless buzzwords that get thrown ridiculous amounts of money at die, the better.

  • by paul_engr ( 6280294 ) on Sunday January 07, 2024 @08:24PM (#64139425)
    This article is based on a false premise. Regardless od how much money stupid people pumped into "web3" there never was a killer app type product (or site) released to the world. Nobody with the most rudimentary logical faculties present gives a fuck about NFTs, the blockchain is a giant yawn, and everything else was endless bullshit hype with no substance or sticking power in the end... AI is largely going to be the same. It's too damn expensive for Microsoft or Google to turn it into a product for the masses, and it's fucking HARD to use it well even for very tightly constrained and well define applications. As a very smart colleague of mine says "ML can interpolate, it cannot extrapolate" and the cost of collecting that data and training good models is simply too damn expensive to be sustainable at any scale like people are hypothesizing about.
  • >there's the question of how to regulate crypto — a marquee aspect of the Web3

God doesn't play dice. -- Albert Einstein

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