Don't Try to Web3 the Entire Internet

Just the most important things

The blockchain builder extravaganza in the early 2020’s unsuccessfully pursued the complete re-architecture of all existing internet infrastructure and applications. As we move into 2025 its paramount that we learn from this failure.

Bitcoin lacks the expressivity to put the internet onchain, and it’s continued march towards ossification makes it increasingly unlikely a major pivot or upgrade will be possible. In any case, Ethereum proved that even adequately expressible blockchains will quickly hit scalability bottlenecks that are impossible to mitigate without drastic compromises that, for practical purposes, can nullify the entire decentralization experiment.

Without commenting on Ethereum’s collective strategy to mitigate these scalability concerns, or the trade offs other blockchains like Solana are willing to make to reach these ends, let’s ask the upstream question: do we still want to put the entire internet onchain?

What proved to be sticky?

Payments and inflation protection.

Collectibles? Gambling? Identity? Social Networks? Maybe. But mostly payments in the form of stablecoins, and inflation protection in the form of native asset investing.

And aren’t those two properties of the same product? BTC and ETH, other crypto assets, and especially the stablecoins built on-top of them, proved to mostly be what people precisely wanted from blockchains during their inceptions: money that was sovereign, useable, and insulated against the wonton policies from centralized fiat currency operators.

I’m writing this on Substack, which has nothing to do with blockchain. I’m not using the blockchain equivalent of Substack, and if we’re being honest, nobody really is because there isn’t a need. The vast majority of internet applications and infrastructure doesn’t benefit from the trade-offs required by blockchains that are sufficiently decentralized such as to be resistant to the largest governments working in lockstep against them.

The only applications worth building on Ethereum, or other similarly decentralized and expressible blockchains, are those where the tradeoffs, such as increased costs for sovereignty and immutability, make practical sense. The uncompromising security and predictability of money in the form of payments and inflation protection on Bitcoin and Ethereum are worth it, and that’s why they’re sticking around.

The fundamental trade offs inevitable when putting data onchain, as opposed to existing internet infrastructure, make the most sense for the civilization level tools with the strictest security requirements; those with the biggest consequences should community consensus fall apart, where accounting errors or manipulation will not be tolerated by civilization.

Right now we’re helping solve the following problem because the tradeoffs make it worth it to put the data onchain AND because it has been a fundamental question throughout civilization currently being stress tested in the internet era:

Is my money mine, and can I actually use it how I want to?

Put the important things onchain

We need to put the important things onchain, not just because they’re the most important and the most worth safeguarding in our tumultuous era of internet transformation, but because those properties make them the only products with the demand to be onchain.

Whether I retain digital ownership over the original publication of this newsletter is trivial in comparison, and is why there’s little reason for an onchain Substack equivalent to gain serious traction.

I’m arguing that blockchains are primarily useful as civilization level consensus mechanisms needed for sense making as we evolve into the internet era. In the last cycle we paradoxically failed by being too cautious, while simultaneously trying to do too much. In other words, we spread our efforts across too many domains that didn’t have product market fit with onchain economics. Instead of building at the application layer, attempting to slowly replicate existing web2 products, we need to focus on putting the fundamentals of civilization itself onchain.

Progress is being made to put the world’s money onchain, but we need to simultaneously begin putting politics and government onchain. We know inevitably both are and will be put on the internet, but their paramount need for accuracy, immutability, and (selective) transparency make the tradeoffs worth it for blockchain.

Can I vote on everything? Is my vote proportionate to my peers. Can I prove it?

The internet alone does not make direct democracy possible, but it is possible onchain. Democratic civilizations have opted for representative governments due to practical necessity; an entire population cannot be expected to congregate for all matters of governance. This assumption will increasingly be tested in the internet era, where that limitation ceases to exist.

Luckily, the most important things and those that will benefit the most from being put onchain, tend to have lenient data demands.