Computer Scientist: Users Will Value Decentralized Systems More as Web3 Tech Matures

The general public is not actively concerned about whether applications are decentralized because they often cannot tell the difference between centralized and decentralized systems, according to Cais Manai, co-founder of Obscuro Labs. What matters more to them, Manai argues, is how decentralization can address real-world issues.

Users Set to Value Decentralized Systems More

As an example, Manai, a computer scientist and entrepreneur, points to the popularity of decentralized finance (defi) and prediction markets like Polymarket as evidence that users value censorship resistance. However, the Obscuro Labs co-founder cautions that this user preference could evolve.

Manai further argues that as Web3 technologies mature and user interfaces improve, more users will likely value the unique benefits of decentralized systems.

In written responses shared with Bitcoin.com News, Manai also discussed his involvement in the creation of a decentralized national instant payments infrastructure. He claimed that this payment infrastructure has demonstrated the scalability and efficiency of blockchain technology in handling large-scale payments.

Below are Manai’s answers to the questions sent.

Bitcoin.com News (BCN): Web3 was once touted as the next big thing, promising to democratize control over user data and become an integral part of daily life. Do you believe Web3 remains as promising as ever? What obstacles hinder Web3 technology from going mainstream, and how can these obstacles be addressed?

Cais Manai (CM): The promise of Web3 remains strong, but we need to reframe our expectations and understanding of what “mainstream adoption” truly means. It’s crucial to define what we mean by Web3 becoming an integral part of our daily lives. Given that approximately 40% of Americans now hold crypto, one could argue it’s already part of their daily lives. However, I think we’d all agree that this level of integration falls short of the disruptive potential this technology holds.

Web3’s journey to mainstream adoption faces several obstacles:

• Network Effect Challenges: Building networks is inherently difficult. You need everyone, or at least a critical mass of people, to move very quickly. This is particularly challenging when disrupting established systems.
• User Experience: Many Web3 applications still lack the seamless, intuitive interfaces that users have come to expect having used Web2 platforms. Improving UX/UI is crucial for wider adoption.
• Regulatory Uncertainty: The evolving regulatory landscape creates hesitation among both users, developers and businesses Clear, balanced regulations could accelerate adoption.
• Scalability and Performance: Many blockchain networks still struggle with transaction speeds and costs, hindering their ability to support high-volume, everyday use cases.
• Education Gap: There’s still a significant knowledge gap between Web3 enthusiasts and the general public. Bridging this gap is essential for mainstream adoption. Alternatively, Web3 needs to get to the point where everything just works behind the scenes.
• The will to succeed: over the last 5 years we have seen 1000s of Web3 startups come and go. For Web3 to be able to continue attracting the top entrepreneurs, technologists and creatives it must avoid gaining a reputation for scams, rugpulls and get-rich-quick schemes. Instead, the legitimacy at the heart of Web3 has to remain strong.
• • Addressing these obstacles requires a multi-faceted approach:
• Focus on Pragmatic Solutions: Some projects are building for solutions that are 5 years away when there are solutions good enough available today, like Trusted Execution Environments (TEEs). We need to balance innovation with practical, implementable solutions.
• Stablecoin Development: Stablecoins will almost certainly go mainstream, particularly if issues around transparency while remaining compliant are solved. The ability to programmatically access dollars across the world is a 10x improvement on anything today in capital markets.
• Enterprise Adoption: To gain traction, Web3 needs to cater to enterprise needs. This includes developing enterprise-grade software, providing robust support, confidentiality where it matters, and offering control over network participation.
• Bridging Web2 and Web3: We need trustless retrieval and use of Web2 data within the Web3 ecosystem. Innovations like ZkTLS, built on Trusted Execution Environments (TEEs), will play a crucial role in this integration, enabling a more comprehensive and interconnected digital landscape.
• Leveraging AI: The advent of AI could be a game-changer for Web3. As we look for AI to do more for us, it becomes abundantly clear that the current Web2 infrastructure was not built for something like AI. AI can independently create its own wallet, make payments, and build its own interfaces into other dApps. This synergy between AI and Web3 could drive adoption in ways we haven’t yet imagined.
• Incremental Integration: Instead of aiming for sudden, complete disruption, focus on gradually integrating Web3 technologies into existing systems where they provide clear benefits.
  It’s worth noting that the challenge Web3 faces is unprecedented. Before Web1, there was no Web0 – the field was wide open. Now, Web3 is trying to disrupt incredibly large, established incumbents. This makes the task more difficult, but also potentially more rewarding.
  In conclusion, while Web3 faces significant obstacles, its promise remains as strong as ever. By focusing on practical solutions, improving user experience, and leveraging emerging technologies like AI, Web3 can overcome these challenges and realize its potential to revolutionize how we interact with digital systems and each other online.

BCN: Do you think the general public truly cares whether the applications they use are decentralized? When it comes to the benefits offered by Web3, what do mainstream users truly care about?

CM: Currently, the masses don’t actively care about whether applications are decentralized in the background, primarily because the average person doesn’t fully understand the difference between centralized and decentralized systems. However, it’s not so much about whether they care about ‘decentralization’ as an abstract concept but rather what it offers in terms of solving real-world problems.

When it comes to what users truly care about among these benefits, it’s an ever-evolving position. Right now, we’re seeing clear evidence that people value censorship resistance – just look at the success of DeFi or prediction markets like Polymarket.
However, the relevance of decentralization extends beyond individual users to industries and institutions. One of the largest unsolved problems in international trade is trade finance. There is no single global system for managing cross-border trade deals and the flow of credit to bridge trust gaps. This is because it’s incredibly challenging for the world to agree on fundamental questions such as:
Who will run the database?
Who sets the rules?
Who can remove participants, and should anyone be removed?

Even if these issues were resolved, the operator of such a network would have access to an enormous amount of sensitive information – far too much power to be entrusted to a single entity. Blockchain technology presents itself as the perfect solution to this dilemma.
My experience in the payments sector further illustrates this point. Banks, even when operating within the same jurisdictions, often struggle with trust issues. Faster payment systems require banks to set aside sufficient capital daily to cover potential credit risks. Again, blockchain technology offers an elegant solution to this problem.

For mainstream users, the benefits of decentralization may become more apparent when things like AI progress to the point of everyone having their own personal AI agent? Who runs that agent? Can they arbitrarily remove our access? Who holds all the data required to power the agent? Are we really willing to hand over all of our intimate data to a single organisation? I’d bet at that point ownership of data becomes a key concern of every citizen.

As Web3 technologies mature and user interfaces improve, we’re likely to see a shift in user priorities. People may start to value the unique benefits of decentralized systems more explicitly, especially as they encounter limitations or issues with centralized platforms.

BCN: Some industry experts believe that centralized data curators, who profit greatly from controlling user data, are deliberately hindering Web3 adoption through technical solutions. They argue that these companies are targeting user interests to increase dependence on their offerings. Do you agree with this theory, or are established companies supportive of the democratization that Web3 promises?

CM: The human condition is that everyone is fighting for survival. And that extends to every collection or endeavour people participate in—whether it’s small businesses, large businesses, or nation states—everything is in a constant fight for survival against the chaos and threats of the world.

It’d be naive to assume that these huge organizations, which rely on huge revenue streams from collecting and selling data, will sit back and watch their survival threatened. It’s particularly difficult for Web3, as its very nature, being decentralized, makes it difficult for today’s incumbents to adopt and decentralize away all their competitive advantages.

A logical step up would be nation-states. Even in the face of huge local monetary issues, countries want to remain issuers of their own sovereign currencies. Blockchain is the world’s first real technology that can arguably disrupt one of the final bastions of pure government monopoly. From the perspective of governments, it’s a frightening prospect, and it wouldn’t take too much effort to see why they’d join the fight against adoption.

However, the future isn’t necessarily a binary choice between Web3 dominance and the status quo. We’re likely to see compromises and hybrid solutions emerge:

A more “Regulated DeFi” aiming to bring decentralized finance benefits while complying with existing regulations.

Hybrid systems like CBDCs, combining centralized control with decentralized execution.

Blockchain-based data sovereignty solutions that balance user control with business value. Looking ahead, the Web3 landscape will likely evolve through:

Gradual integration of Web3 technologies into existing systems.

Evolution of regulatory frameworks to accommodate these new technologies.

Adaptation of large tech companies, incorporating Web3 elements into their business models.

The emergence of new power structures native to the Web3 ecosystem, like influential DAOs.Potential transformation of the global financial system, leading to a new equilibrium where decentralized and centralized systems coexist. This transformation won’t be immediate or smooth. It will be gradual and non-linear, with periods of rapid change, slower evolution, and occasional setbacks. The key challenge will be harnessing the benefits of Web3 while addressing legitimate concerns around security, stability, and consumer protection.

BCN: Your project, TEN Protocol, claims to be the first Ethereum Layer 2 to deliver full data encryption. Could you explain to our readers how TEN scales and encrypts Ethereum? And how does it affect the user and developer experience?

CM: TEN was born from the need to expand the appeal and design space of Web3.
Like Arbitrum and Optimism, TEN is an Optimistic Rollup. It batches together transactions on the EVM and rolls them up to a cheaper form of storage on Ethereum known as blobs. The ingenious aspect of L2s is their ability to achieve significant increases in transaction speed and volume, along with substantial decreases in transaction costs, while leveraging Ethereum’s mass decentralization by solving the blockchain trilemma.

Where TEN stands out is in its application of encryption across the entire network. It effectively allows developers to write smart contract code as if they were writing for a private centralized server. For the first time in the Ethereum ecosystem, developers can create smart contracts with programmable privacy and private state, or more simply – contracts that can hold ‘secrets’. This opens up possibilities for applications like Amazon or Facebook, which depend on keeping order details private or restricting photos to friends and family.

A compelling example is the game of Poker. To build it in a completely trustless way, you’d want all components on-chain. But how do you solve the problem of keeping players’ cards hidden, shuffling randomly, and hiding the deck? TEN provides the solution.
TEN solves these challenges and opens up Web3 to a whole new world of use cases. In fact, you could argue that with TEN, virtually any Web2 use case can now be deployed on-chain.

Importantly, TEN achieves this without disrupting the user or development experience:
For users: Interacting with a dApp on TEN feels identical to using a dApp on Ethereum, Arbitrum, or Optimism.
For developers: It’s the same pure EVM environment they’re familiar with. Everything works straight out of the box, ensuring zero friction in adoption.

TEN brings substantial benefits to the Web3 ecosystem without compromising on existing functionalities or user experience. It enhances the capabilities of blockchain technology while maintaining the familiarity and ease of use that developers and users expect.

BCN: As someone who has helped found several crypto and fintech startups, what would you say are the key factors investors consider when assessing projects to fund?

CM: It’s an incredibly difficult industry to invest in as an investor, as you’re not only just placing bets on the unknown but also often having to understand quite esoteric technology. However, there are some tried and tested approaches:

Team Quality: First and foremost, investors invest in people. Ideas and businesses can be copied, but teams cannot. Investors look for teams with:

Relevant experience in blockchain, finance, or technology.
A track record of successful projects or startups.
Complementary skill sets across technical, business, and regulatory domains.
Ability to execute and pivot when necessary.

At TEN, we’re fortunate to have incredible people in abundance. Most of the team was involved in building the world’s most successful enterprise blockchain, R3 Corda, and had run start-ups in the past.

Big Vision: This applies more to Web3 than perhaps any other industry. It’s not enough to turn up with a vision of how you’ll solve small problems – investors in Web3 want to be part of entirely new verticals. They’re looking for projects that:
Have the potential to disrupt existing industries.
Create new markets or ecosystems.
Solve significant, widespread problems.

Ethereum’s goal is to become the world’s computer. Our goal is to provide the private processing for that global computer.

Technical Innovation: In the rapidly evolving world of crypto and fintech, technical innovation is crucial. Investors assess:
The uniqueness and robustness of the technology.
Scalability and performance metrics.
Security measures and resilience against potential attacks.

Market Opportunity: The size and growth potential of the target market is a key consideration. Investors evaluate:
Total addressable market (TAM).
Current and projected market growth rates.
Competitive landscape and barriers to entry.

Regulatory Compliance: It’s not something people in Web3 like to talk about but given the evolving regulatory landscape in crypto and fintech, investors pay close attention to:
The project’s approach to regulatory compliance.
Potential regulatory risks and mitigation strategies.
The team’s understanding of relevant regulations.
Without this, Web3 will only appeal to a small section of society.

Traction and Milestones: While early-stage projects may not have significant traction, investors still look for:
Clear, achievable roadmap with defined milestones.
Early adoption metrics or pilot programs.
Proof of concept or minimum viable product (MVP).
Expect the goalposts to move as you make progress continually.

Long-term Sustainability: Investors are increasingly focused on the long-term viability of projects. They consider:
The project’s path to profitability or self-sustainability.
Potential for recurring revenue or value creation.
Adaptability to changing market conditions and technologies.

BCN: You have been credited with helping design a decentralized national instant payments infrastructure, which has been described as the first of its kind. What is your assessment of this payment infrastructure so far, and do you believe the world is ready for this kind of alternative?

CM: Without mentioning the country it operates in, it’s considered to be one of the most advanced payment systems of its kind, serving billions of transactions every day. A key thing to note is that this system wasn’t built on a permissionless blockchain but rather an enterprise blockchain. In essence, this means someone controls who can and can’t join the network, compared to something like Ethereum or TEN, where anyone can join, use the network, and run infrastructure.

But what it showed for the first time is that the fundamental technology we’re all building on can scale to meet the demands of practically every payment within an economy—which is incredible. Not only this, but it removed all the trust assumptions between the banks that operate within the network, improved capital efficiency, didn’t go down, and settlement at the central bank can occur on demand when it most makes sense for each bank. The blockchain technology provided a massive improvement over the existing approach.

Examples like this that don’t involve a token are often overlooked, but they serve as an example of just how powerful the technology we’re working on really is while bringing the banks one step closer to integrating with networks like Ethereum in the permissionless space.

BCN: Data democratization has faced significant regulatory challenges that seem to be hindering Web3 development. Governments are concerned about the potential privacy and security implications of Web3, leading to privacy laws that may conflict with the ethos of Web3 implementation. Are there aspects of privacy laws that you believe are stifling Web3 development and mainstream adoption? If so, what do you think governments should do about them?

CM: There are several lenses in which you can view this.

On the one hand, governments and all the various regulatory and policing authorities work hard to keep us safe from criminal activity, and acts of terrorism, safeguard our property rights and everything in between. And the argument is, the only way they can carry out this work is if they have access to sufficient data to get ahead of these problems.

On the other hand, there’s a tipping point where if too much data is handed over, you begin to lose your freedom as a citizen, and aspects of your life can be controlled. We saw this with Cambridge Analytica where they had access to so much of data they were able to manipulate how people voted in favor of the highest bidder.

Most of us are fortunate to live in countries with benevolent governments, but that can quickly change, as we’ve seen in the past. If we’re already at a stage where all our data has been handed over, well, the outlook isn’t great.

The reality is there is a middle ground where governments can carry out their work to keep us safe, and citizens remain in control of their lives.

The work we’re doing at TEN is to strike a balance between privacy for good while keeping out the actors that use privacy for bad. It’s an incredibly difficult challenge to solve, and our first attempt at this revolves around the idea of a ‘revelation period’. This empowers developers and the community with the tools to decide where that line is.

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