A couple days ago, Moxie Marlinspike wrote an article about his first impressions with Web3. In it, he advances several valid criticisms of the Ethereum ecosystem, but overall throws the decentralization baby out with the bathwater. Although Moxie is self-admittedly new to Web3, this is one of most substantive critiques of the current Web3 commercial space. And being one of the few pioneers of encryption who is openly outspoken against decentralization, it’s important to engage with his argument and see what we all can learn from the discussion. To quote Moxie from 2020:

“I’m not entirely optimistic about the future of decentralized systems, but I’d also love to be proven wrong”.

Well, let’s attempt to do just do that! First, we’ll discuss why decentralized services are sorely needed – both by individuals and society at large – and then we will engage with Moxie’s arguments against Web3 in particular (as implemented by the Ethereum ecosystem).

What’s Wrong with Centralized Services?

For starters, there are a ton of community applications you wouldn’t even be able to even implement with centralized services, because of the deficiencies in their trust model. As just one example of many, consider running elections (see our article in CoinDesk for what is involved in that). Today, collective decision-making by a community is done rarely, and resorts to electing representatives every few years whose job it is to make the decisions for society. Today, we still think of elections as something that has to be done with pen and paper, and mutually distrusting parties checking each other’s work (aka byzantine consensus by hand). It’s like when we used to have human computers mechanical devices and telephone switchboard operators, until digital computers changed the paradigm and allowed a whole host of new applications to be created. Web3 and smart contracts can lead to new applications, of which DAOs and NFTs are just the early implementations.

But there are deeper problems with centralization itself, that need to be solved for people and society as a whole to progress through better technology, the way it did by moving from analog devices to digital computers. Let’s see what they are:

Centralization: Single Points of Failure

Moxie Marlinspike is one of the founders of WhatsApp, a centralized messaging service which eventually got acqui-hired by Facebook for $19 billion. Gradually, Facebook proceeded to exert more and more control over the service, and the founders left. Facebook continued to encroach on users’ privacy in order to help monetize and control the platform, and triggered a sizable user exodus in early 2021 when they unilaterally changed the terms.

Now let’s give credit where credit is due: Moxie is an anarchist who has built end-to-end encrypted systems since 2010, founded WhisperSystems a decade ago, and launched a very successful centralized messenger service called Signal. Here he is on TechCrunch Disrupt, talking about it:

Guess what… there’s another entrepreneur from Russia, who is an even more hardcore anarchist, founded the Russian Facebook years ago, refused to hand over user data to the Russian government – and was forced to sell all his shares in a fire sale to Russia’s Mail.ru conglomerate, while fleeing the country to France (he is now in Dubai).

While Moxie started Signal, Pavel Durov started Telegram, which has grown to be used the world over. Both are centralized messaging services championing user sovereignty and end-to-end encryption, run by billionaires who had (voluntarily or not) lost control of their previous centralized services (WhatsApp and VKontakte, respectively). Both new centralized services have already had their developers (and founders) been approached by intelligence services, and their technology confiscated and scrutinized at airports etc. If these guys are our last line of defense against blackmail against government spies installing backdoors, or targeted advertising arrangements from economic partners, then perhaps we need a better system.

Pavel routinely criticizes WhatsApp, and even the government-sponsored encryption it uses, with Telegram preferring to hire its own Ph. Ds and roll its own encryption that, to date, has never been broken according to Telegram’s own website.

But we can’t just go off what Telegram, WhatsApp and Signal claim on their own sites and twitter accounts about their own products. Even if what they say is true at one point, it takes a single person in their organization to ship a backdoor in an update, that immediately ends that whole guarantee.

Centralization: Lack of Control

Privacy, as important as it is, is only one aspect of a greater issue with centralized services: the lack of control users have. Today, we all live in a Feudal Society, with a few large landlords (Google, Microsoft, Facebook, et al) who do not give you their back-end software. You just have to trust them to have your best interests at heart when they host your files, and manage your data and implement your privacy settings. Just recently, Google banned distribution of “misleading content”. Individuals and organizations around the world trust them with their very online identity and brand every time they choose to “log in with Facebook/Google/etc.”. If you don’t like it, don’t use it, right? But what about that open source alternative?

When all you have is a choice between one landlord or another, you shake your fist at WhatsApp and yell “I’m leaving to Telegram or Signal!” Let’s see why that is, and why under a capitalist market system with unlimited private ownership (of networks as they grow), and profit motives (by shareholders), the end result is inevitable. And we’ll then see how Web3 is different.

Web 1.0 Disrupts Human Institutions

Web 1.0 quickly disrupted the centralized online services of the day (America Online, CompuServe, Prodigy, Microsoft Network), as well as newspapers, magazines, cable channels, TV networks, and other gatekeepers that were necessary for getting the word out. It allowed anyone to deploy some code on a web server, and serve anyone in the world through an open decentralized protocol called HTTP. Voice Over IP (or VOIP) quickly brought down the cost of telecommunications, disrupting the capitalist telecommunications industry – a feat