illustrations by StorysetOne of the major appeals of cryptocurrency is the ease with which it can be transferred openly from one person to another without any third party, but it does not stop there. Cryptocurrency takes value exchange to another level by allowing individuals to transfer tokens openly but anonymously.
Through blockchain transactions, people can separate their public digital identity from their real-life identity. There are pros and cons to this, but fundamentally, this creates censorship resistance, which has become more important today. Unfortunately, this is slowly changing with the rise of Big Financial institutions' involvement in the Web 3 space.
Over the years, big TradFi companies/institutions have made their way into Web 3. Unlike retail investors and crypto normies, their sole aim isn't profit but control. To achieve this, they've played the long game, taking short-term losses. TradFi companies have invested heavily in the space. Most of the infrastructure that supports DeFi today is owned by TradFi companies, but this is something crypto normies care little about because they've been sold the narrative that crypto is free money.
Remember the saying that you are the product if you don't pay for it? Well, that statement holds for Web 3. You may ask, "To what end are these institutions bankrolling Web 3 startups?" The answer is simple: they want to uncover the unknown by putting faces to every address/account. This gives them more control over the space.
Yesterday, there was an incident where an airdrop farmer got blacklisted from an airdrop. He could swear that he did nothing wrong, but I think what he has done counts even more. This is because personal identification has become mandatory for most airdrop interactions, i.e., Galxe Passport and Gitcoin score are used to identify and rank wallet addresses.
Now, there is the argument that Web 3 platforms and blockchains use these identification services to fight sybils. Some critics might argue that only people with nefarious intent want to be anonymous online, but this is not entirely true. There are obvious benefits of being anonymous online. It can serve as a powerful tool to fight tyranny and censorship.
I do not have a solution to this problem (if you consider it as one). This post aims to discuss my observations and possibly bring to people's notice some of the subtle things happening in the Web 3 space. There is not much that can be done to change the trajectory, which I believe is being determined by the likes of BlackRock.
In conclusion, I will reiterate one of my major talking points: Web 3 might be co-opted by Big Brother, but I am going to make the best out of this situation. The world is not ready to share in Satoshi's dream. DeFi and TradFi are semese twins and whatever illusion we have about crypto is slowly eroding. Nevertheless, there are countless opportunities in the space for people to have better lives, which gives them a shot at fighting tyranny in the future. This is a win.
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