Is Web3 as Decentralized as We Thought?
Recently, cryptocurrency and Web3 platforms and companies have been banning Russians from using their services, following calls from the United States to enforce sanctions. These activities, though arguably justified, call into question the true decentralization of the blockchain and Web3 space, and if the possibility of censorship is still just as real as it is in Web 2.
Due to the Russian invasion of Ukraine, the United States and other Western countries have been imposing economic sanctions on Russia and its citizens. These sanctions, which effectively cut Russia out from the global economy, are meant to isolate the country and make their war incredibly unprofitable.
As part of these sanctions, the United States has cut off Russian oligarchs and businesses from dealing with the United States in any way. Two prominent cryptocurrency exchanges, Coinbase and Binance, have agreed to comply with sanctions but go no farther. Some have called upon the platforms to ban all Russian users from their service, but Coinbase and Binance refused, citing the fact that everyone deserves access to financial services. That being said, both are willing to comply with US sanctions if they become more strict in the near future.
Two other Web3 platforms, MetaMask and OpenSea, have taken the opposite approach, and are banning all accounts coming from a US-sanctioned country. These countries include Iran, Venezuela, and Russia, among others. OpenSea users in these countries have seen their artwork and accounts deleted, while MetaMask wallet users in impacted countries can no longer use the wallet to access Web3 anymore.
To many, this is a violation of the basic tenet of Web3: full equality and access for all, with no possibility of censorship or restrictions. This series of events has shown the harsh reality of Web3, and the fact that this is not the case.
Like any company, both OpenSea and ConsenSys (MetaMask’s parent company) are forced to comply with the United States government, or face severe penalties otherwise. Additionally, the service that MetaMask uses to interface with the Ethereum blockchain, Infura, is based on Amazon Web Services and must comply with its terms and conditions.
Web3’s biggest players are arguably just as centralized as Web 2.0. Even though this may seem like a major issue, since these companies are at the will of the government and big tech, there is hope that this will change in the future.
Even though MetaMask and OpenSea have to comply with sanctions, there are other alternatives that are more decentralized and do not have to comply with the United States government. These alternatives live on the blockchain and in some cases do not have an associated corporate entity, meaning there is nobody to penalize if these services host Russian or Iranian users. Furthermore, as blockchain and cryptocurrencies become more mainstream, there will be even more wallet and exchange options for people to use, all of which will create a more decentralized and censorship-free environment.
Web3, in its current form, is not ready for mainstream adoption. It needs to become more decentralized, more user-friendly, and more accessible before it will claim its title as the next generation of the internet. Until then, early adopters can continue to appreciate its use-cases and support the alternatives that will help to make Web3 truly decentralized.
By Lincoln Murr