Is Web3 threatened by Web2.5 and regulations? An exec warns

It was the summer of 2017. John was an early adopter of cryptocurrencies and had invested heavily in Ethereum. He was excited about the potential of Web3, the decentralized web, to disrupt traditional industries and make the world a better place. He had even quit his job to work full-time on a dApp that he believed would change the way people traded goods and services.

But as he was working on his dApp, John started to realize that things weren't as simple as he had thought. He had to deal with slow transaction times, high gas fees, and scalability issues. He also realized that Web2.5, a hybrid of Web2 and Web3, might be a more practical solution for many use cases.

Web2.5 and the Threats to Web3

Web2.5 combines the features of Web2, such as centralized servers and databases, with the benefits of Web3, such as blockchain technology, smart contracts, and decentralized governance. It allows for faster transactions, lower fees, and more user-friendly interfaces, while still providing the security and transparency of blockchain.

Web2.5 is already being used by popular dApps such as CryptoKitties, Augur, and Golem, and is expected to become even more prevalent in the coming years. This poses a real threat to Web3, which could be seen as too slow, expensive, and complex for average users.

Another threat to Web3 comes from regulations. As cryptocurrencies and dApps become more mainstream, governments around the world are starting to take notice and develop regulatory frameworks. While some see this as a necessary step towards adoption and legitimacy, others fear that it will stifle innovation and limit the potential of Web3.

• CryptoKitties, a dApp that allows users to buy, sell, and breed virtual cats, has become one of the most popular applications on Ethereum, with over 1.5 million transactions and more than $27 million in sales.
• Augur, a decentralized prediction market, has processed over $1.5 million in bets since its launch in July 2018.
• Golem, a dApp that allows users to rent out unused computing power, has over 14,000 active users and has processed over 500,000 transactions.
• In January 2021, the price of gas on the Ethereum network reached an all-time high of 1,450 gwei, making it very expensive for users to execute transactions.
• In December 2017, the SEC issued a cease-and-desist order against Munchee, a company that had raised $15 million in an ICO, stating that its tokens constituted a security and therefore had to be registered with the agency.

Conclusion

In conclusion, Web3 is facing several challenges, including competition from Web2.5, scalability issues, and regulatory uncertainty. While Web3 has the potential to revolutionize many industries and create a more equitable and decentralized world, it will need to overcome these challenges in order to succeed.

Here are three key takeaways:

1. Web2.5 is a viable alternative to Web3 for many use cases, and is already being used by popular dApps.
2. Scalability, transaction times, and gas fees are still major issues for Web3, and need to be addressed in order to improve user experience.
3. Regulatory frameworks are necessary for the adoption and legitimacy of cryptocurrencies and dApps, but should be designed in a way that fosters innovation and does not stifle it.