Jack Dorsey says VC involvement means crypto users don’t own Web3 — and Elon Musk seems to agree

• Jack Dorsey and Elon Musk are decrying venture capital influence on Web3.
• Crypto users don’t own the next version of the internet, venture capitalists do, Dorsey said.
• When Musk asked if anyone’s seen Web3, Dorsey said “it’s somewhere between a and z” — possibly hinting at VC firm Andreessen Horowitz.
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Twitter cofounder Jack Dorsey doesn’t have much faith in the idea that Web3 — the next generation of the internet — will “democratize everything.” And Tesla boss Elon Musk doesn’t even seem to think it exists.

Web3 is seen by crypto advocates as a stepping stone to giving people more ownership of their online activity. As it’s built on the blockchain, and so decentralized, that means it won’t be controlled by Web2’s tech giants such as Google, they argue.

But Dorsey shot down that idea in a post to Twitter, pointing to how venture capitalists and their limited partners, or VCs and LPs, are building influence in the space.

“You don’t own ‘web3.’ The VCs and their LPs do,” Dorsey said in a tweet late Monday.

“It will never escape their incentives. It’s ultimately a centralized entity with a different label. Know what you’re getting into …”

His tweet got a lot of pushback in replies, with people saying things like “highly disagree” and “dead wrong.”

One user hit back at Dorsey, saying the former Twitter CEO — who says he has nothing to do with Web3 — has “taken a lot of VC money” himself.

“And this is why I know exactly what I mean,” Dorsey replied.

While Dorsey is no longer at the head of Twitter, he is still CEO of Block. The digital financial services provider, which rebranded from Square this month, is gradually pivoting toward cryptocurrency and blockchain technology.

Tesla CEO Elon Musk chimed in on Dorsey’s Twitter discussion, asking: “has anyone seen Web3? I can’t find it.”

Dorsey responded with “it’s somewhere between a and z,” perhaps an allusion to Silicon Valley VC firm Andreessen Horowitz, known as a16z.

Billionaire Musk has previously slammed Web3, saying it “sounds like BS.” At the weekend, he said the idea is more of a marketing gimmick — suggesting he doesn’t see it as a baked technology yet.

Some applaud Web3’s promise to put people in control of their online destinies — letting them go from one social platform to another using a single account, for example. But others see it as “vaporware,” or ultra-hyped tech that’s yet to be built out.

Yet Web3 will underpin the metaverse — the virtual worlds attracting Wall Street interest — and allow the trading of high-value digital assets like non-fungible tokens, or NFTs.

Andreessen Horowitz, which is working to double down on crypto startups with its dedicated $2.2 billion fund, is going all-in to embrace Web3 with its investments.

The firm, which has been investing in digital assets since 2013, has said: “Crypto is not only the future of finance but, as with the internet in the early days, is poised to transform all aspects of our lives.”

Overall, VC firms invested more than $27 billion in crypto-related projects in 2021, more than in the last 10 years, according to PitchBook.

After Dorsey’s tweet, a16z general partner Chris Dixon offered some words of goodwill by saying he’s a “huge fan” of Dorsey and that he hopes “we can eventually bring him around to ETH and other blockchains.”

To that, Dorsey said: “It’s critical we focus our energy on truly secure and resilient technologies owned by the mass of people, not individuals or institutions. Only that foundation will provide for the applications you allude to.”

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