Web3 is slammed by Musk and Dorsey as a 'centralised' gimmick controlled by venture capitalists.

How Elon Musk, Jack Dorsey's Crypto Bromance Evolved

Tesla and Square CEOs got into a dispute with Andreessen Horowitz, a renowned VC company, igniting one of the year's best crypto spats.

Tesla CEO Elon Musk and Square CEO Jack Dorsey, two of the most powerful figures in crypto and Silicon Valley, rushed to Twitter on Monday night to fire blows at Web3 and the strong venture capital firm that has done the most to promote it.

Dorsey set the tone for the fight earlier in the day when he responded to a tweet from rapper Cardi B, who wondered if cryptocurrency may eventually replace the dollar. What's Dorsey's opinion on it? Bitcoin will succeed. The term "crypto" should be replaced with "bitcoin."

 

Dorsey's reply is just the latest reminder of his staunch Bitcoin-only stance.

Hours later, Dorsey—who until last month was also CEO of Twitter—began venting in earnest when he took aim at Web3, which has become a buzzword that its evangelists use to describe a new era of the Internet that will replace powerful tech companies with a decentralized system of blockchains. The primary proponent of the vision has been VC firm Andreessen Horowitz (a16z) and its allies, leading Dorsey to tweet this:

Dorsey's tweet prompted Musk to throw his own jab at Web3, and the pair engaged in a back-and-back forth that called out a16z more directly:

The tweets led other prominent Silicon Valley figures to join the conversation, including a gaggle of a16z figures who rushed to defend their Web3 project.

Those defenders included Chris Dixon, a partner at the VC firm, who is one of the most prominent investors in crypto and who has published a series of recent Twitter threads exalting Web3. After Dorsey's initial tweet, Dixon attempted the popular Gandhi "first they ignore you" quote, but Dorsey was having none of it, blasting the VC's attitude as phony and sanctimonious.

The high-profile beef over Web3 soon drew in other prominent Silicon Valley figures, including Box CEO Aaron Levie and the outspoken VC Jason Calacanis, both of whom sided with Dorsey.

Not everyone took Dorsey's side. Those included Andreessen Horowitz's allies, of course, but also people on Twitter who suggested he is blinded by a Bitcoin-only mentality. Others called him a hypocrite for having accepted plenty of venture capital money to start his own companies.

Dorsey took the pushback in stride, suggesting Web3 advocates are thin-skinned, and doubling down on his warnings about venture capitalists' thirst for control:

Meanwhile, some people jumped into the debate with some data that suggests Web3 is not as decentralized as its proponents suggest. This included a tweet citing the research firm Messari that shows how a large proportion of the tokens tied to some of Web3's most popular projects are controlled by VCs and other insiders:

As of Tuesday morning, Dorsey was still feuding with various influential figures in crypto, including ShapeShift founder Erik Voorhees:

Dorsey also smoothed things over somewhat with Dixon of a16z, saying "I believe in you and your ability to understand systems. It’s critical we focus our energy on truly secure and resilient technologies owned by the mass of people, not individuals or institutions."

So, what are we to make of it all? On the one hand, you could dismiss the spat between Dorsey, Musk, and others as just another in a long line of squabbles that erupt on Crypto Twitter every day of the week.

However, this Twitter squabble also signals something else: maybe the most astute challenge to date to the Web3 idealism that many in the crypto realm preach as religion. Dorsey is one of the only people in the crypto world with the track record and power to oppose Andreessen Horowitz's ambitions for the next phase of crypto (he is in the process of turning Square into a Bitcoin-first company).

Dorsey's shot across Web3's bow, on the other hand, may be motivated by self-interest: both of the firms he built, Square and Twitter, symbolise the Web2 age and may face an existential danger from a more decentralised technology stack.

 Look for this debate to continue in 2022.

And on a final note, Neeraj Agrawal of Coin Center spoke for many on the east coast who woke up to discover they had missed all the juicy action.

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