Will Web3 Follow in the Footsteps of the AI Hype Cycle?

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For many, the global financial crisis of 2008 marked a turning point for trust in established institutions. It is unsurprising that during this same historical time period, Bitcoin, a decentralized cryptocurrency that aspired to operate independent from state manipulation, began gaining traction. Since the birth of Bitcoin, other decentralized technologies have been introduced that enable a broader range of functionalities including decentralized finance (DeFi), non-fungible tokens (NFTs), a wide range of other cryptocurrencies, and decentralized autonomous organizations (DAOs). 

These types of technologies constitute what is sometimes referred to as “web3.” In contrast to web2, our current version of the web, which relies heavily on centralized platforms and corporate intermediaries–think Facebook’s social network or Amazon’s webshop–web3 promises to redistribute power and agency back into the hands of users through decentralized peer-to-peer technology. Although web3 has garnered fervent support and equally fervent critique, it is undeniable that cryptocurrencies and other decentralized technologies have captured the mainstream imagination. 

What is less clear is whether the goals and practices of emerging businesses in the web3 sector align with, or stand in conflict with, the ideologies of web3’s most enthusiastic supporters. Organizational sociology has long established that organizations’ external rhetoric, which is shaped by a field’s perception of what is culturally and socially legitimate, may not fully align with their internal rhetoric or day-to-day practices. Continuing in this tradition, in a recent study, my colleague at Princeton’s Center for Information Technology Policy, researcher Elizabeth Watkins, and I sought to understand how people working at

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