From the Depths of Blockchain

They simply set out to buy the American Constitution — and revolutionize the world with it. It fits so well with what the pioneers of the Internet once envisioned: a democratic network, sustained and shaped by its many users. And it couldn’t be more metaphorically enchanting: a group of crypto-investors banding together to found “ConstitutionDAO” and at the same time attempting to purchase an original copy of the American Constitution, bringing it back to its democratic origins dedicated to the masses, rather than the elites.

A DAO, a decentralized autonomous organization, is the latest craze when it comes to talk about the future of the Internet. In such an organization, any number of people can come together to pursue a goal or launch a venture. They don't have to be otherwise connected; everyone works on a part of a project in a decentralized manner, with the details registered on the blockchain. If this is successful, payment or compensation for work is awarded according to the rules established at the beginning through “smart contracts.”

Simply put, a DAO is a decentralized company run by its members that doesn’t require a CEO. The older concept of the co-operative therefore resonates a little here, but DAOs are more radical and based on technology. They not only change corporate structures but also break with the rules of hierarchy and control that we’ve known in the corporate world since industrialization. And DAOs are supposed to revolutionize the entire Internet.

This is because they now work just like global corporations. A small number of huge tech companies set the course and direction of things. There is nothing decentralized, non-hierarchical or grassroots about the Internet anymore. “We have shown that the Web has failed to serve humanity,” said Tim Berners-Lee, the inventor of the World Wide Web in 2018, “and it has failed in many places.”

But Web 3.0 is now coming to the rescue, which comes from the depths of blockchain. Most requests on today’s Internet are sent through Big Tech’s centralized servers, which also store our personal information. In Web 3.0, these servers will be replaced by blockchain. Data will be stored in decentralized peer-to-peer databases or on a public blockchain that belongs to no one.

This brings back another dream that the Internet has long since given up: a farewell to the intermediaries who siphon off most of the profits. Many of these from former times have become history, with the big companies like Amazon, Facebook and Google taking their position. In many ways, the digital platform economy of Big Tech looks rather similar to the trading economy of the past but only a bit bigger and more centralized.

In Web 3.0, things are supposed to be different. Big companies will not be offering people what they want; people will be organizing themselves via DAOs through blockchain. It sounds great, and perhaps it really does offer a realistic opportunity for the reorganization of at least some parts of the Internet. But until it has widespread impact, many data streams will continue to flow undisturbed via the servers of the large technology companies. This is because blockchain, on which everything is to be based, is an expensive pleasure.

Firstly, Web 3.0 requires exactly the kind of investments that Big Tech companies will probably be able to make first. Secondly, for each transaction on blockchain, so-called “gas fees” need to be paid for the energy that is used to validate and store transactions on blockchain. And, thirdly, somehow there is always someone who has more money, more traditional power, or both to consolidate their own position in new structures and hence stifle enthusiasm for a decentralized crypto world.

Incidentally, the copy of the US Constitution didn’t end up being sold to “ConstitutionDAO.” Although it raised US$47 million, the Constitution was auctioned off for even more money to a man named Ken Griffin. He is the CEO of the hedge fund Citadel.