BSV vs Web3—a David and Goliath fight?

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If you’ve been ploughing your furrow in Bitcoin SV, it’s easy to ignore what’s happening beyond the horizon. I’m as guilty of that as anyone but sometimes news of the world reaches me via The Economist. It turns out that much of what BSVers think and talk about is also being debated elsewhere. It’s a strangely familiar world out there.

I was reminded of this by an article in this week’s Economist titled, “Will web3 reinvent the internet business?” From the magazine’s San Francisco desk, the piece describes the opposing camps of enthusiasts and sceptics around the still hazy concept of web3—a blockchain-based alternative to the internet. 

The reporter puts the idea of web3 into the context of tech history, which is “a constant struggle between decentralisers and recentralisers.” So computing went from mainframes (centralised) to PCs (decentralised), which were then conquered by Microsoft (a centraliser), only to be challenged by the open source movement (decentralised) that the tech giants then made use of to power their own tech, such as Android or AWS (centralising forces again).

This is relevant, the writer says, because web3 is “a reaction to perhaps the greatest centralisation of all: that of the internet.” Is this starting to sound familiar? ‘Own your own data.’ ‘No trusted third parties.’ Everyone can earn micropayments instead of handing over personal data to the tech giants. BSV mantras sit happily among the aspirations of web3. 

Have you heard Dr. Craig Wright’s views of Silicon Valley, the epicentre of centralised internet power? He’s not a fan, to put it mildly. And if there’s one thing he hates more than venture capitalists and how the tech giants make their money from ads and data, it’s Silicon Valley hype about blockchain. So the venture capital firm Andreessen Horowitz (aka a16z) which, according to The Economist, is Silicon Valley’s “biggest web3 champion,” is not in his good books. 

Chris Dixon from a16z sees web1 (which was never called that at the time) as the original decentralised internet. Those were the days when every ambitious 20-something was starting their own dot com and every ISP offered its customers the chance to build their own family website. 

Then, according to Dixon, there was web2, epitomised by Google and Facebook, who collected their users’ data on an unprecedented scale. This was the era of Surveillance Capitalism. The “was” may be premature but for web3 supporters we’re already embarking on the new era.

Here’s where visions for BSV and web3 overlap—and even with those of a16z. How many times have you heard BSVers talking about money being simply the first application of blockchain technology? Well, web3 has caught up: “blockchains have outgrown cryptocurrencies, their earliest application,” says The Economist. “Now they are increasingly underpinning non-financial services”.

Chris Dixon echoes the thoughts of many BSV entrepreneurs when he says that it’s hard for blockchain-based enterprises to lock in customers because they don’t own their customers’ data: “If their customers are unhappy, they can move to a competing service.” Ask Joshua Henslee or Jack Liu and they will tell you that this is one of the great innovations made possible by the BSV blockchain. And what’s so great about it? Well, as Joshua or Jack, or, it seems, Chris Dixon too will tell you, it “makes web3 [or BSV] companies try harder to satisfy customers and keep innovating.”

It would be wrong to suggest that if only people were nicer to each other, they’d discover that their goals were the same and they could live together in peace and harmony. Marc Andreessen, the “a” of a16z, is a veteran of the centralised/decentralised cycle of tech. In 1993, still at university, he led the development of the Mosaic browser, which, transferred to Silicon Valley, became Netscape and catalysed the explosion of the consumer internet, challenging Microsoft, the ‘evil empire’ up in Seattle. Then as a venture capitalist he hit several jackpots including Twitter, Pinterest and Facebook—all centralising customers and data. Now, as a backer of blockchain, he’s potentially threatening their power with a second round of decentralising. 

But as The Economist points out, it remains to be seen whether blockchain businesses can satisfy their new data-owning customers and do so “while also making pots of money.” The big difference between BSV entrepreneurs and a16z is that BSVers are betting everything on that being possible while Marc Andreessen is hedging his bets. He’s still on the board of Meta (Facebook) and as a VC, the odds tend to work in his favour anyway even if the startups he’s backing turn out not to be the new Facebook. 

So where does all this leave BSV? It must surely be useful that ideas supporting BSV development become more widely circulated, even if in a different business context. If potential entrepreneurs or investors in BSV are already familiar with the concepts of ‘own your own data’ and ‘no trusted third party’ then the arguments for BSV can be made to listeners who will be more ready to hear about its particular advantages such as low transaction fees and micropayments. On the other hand, the sheer heft and momentum behind a16z and its fellow Silicon Valley blockchain boosters make them formidable competitors. From that perspective, it may feel like a David and Goliath contest. But remember, David won. He had better technology.