The BlockDown 2021 conference, fulfilled this Friday (3), it brought together two great names of our generation, on the one hand Edward Snowden, President of Freedom of the Press, and on the other Gavin Wood, co-founder of Polkadot and Ethereum. The main subject was web 3 which includes the much talked about metaverse.
Although the opinions of the two guests are different in many ways, not least because Snowden raises questions that he says could make the progress of web 3 as bad as web 2.
Another point discussed were stablecoins which, with central points of authority and failure, still remain a kind of more of the same, when compared to the current banking system. As a solution, Snowden mentioned stablecoin DAI, whose backing is based on excess collateral from other cryptocurrencies.
Among Snowden’s main criticisms is the way game developers create artificial scarcity in a world that has already pushed the limits of scarcity, using wall paint as an example.
“People come home exhausted [de seus trabalhos], eat their cheap meal and then turn on their devices to escape it all and then they are in their digital world, on a beautiful island, where they built a beautiful house, but to change the color of the wall, you have to pay 19, 99 for that, or for a token for a chance to maybe get your wall recolored.”, these Snowden
“There’s something horrible and heinous and tragic about it”
Continuing his thinking, Snowden said there’s a big difference between tokenizing and trading an item, which a user took hours to make, than creating an artificial scarcity whose sole purpose is to benefit a small class of investors who will profit from those purchases.
Finally, he also focused his criticism on so-called loot boxes, in which players have a chance of getting rarer items but statistically lose money. According to Snowden, this tactic that has been used for years will continue to be used by developers in the metaverse, distorting what could be a good evolution.
The start of the conversation was also marked by Snowden’s vision of stablecoins and CBDCs. According to him, the companies behind stablecoins like Circle’s USDC are a bad idea as they can freeze addresses by blacklisting them and then burning any users’ tokens.
“A stablecoin that has a blacklist, in my opinion, is not a stable currency”
Although it sounds and is simple, this speech by Snowden is quite profound. When you use a stablecoin, you are assuming that your coins have a stable value — in this case $1 for each token — although if a company has the power to confiscate your coins, it is no longer stable anyway.
Anyway, what we can take from this conversation is that it is necessary to be aware of the pitfalls that cryptocurrencies, the web 3 and the metaverse have to offer us. Otherwise, we will be repeating the same mistakes over new technologies.